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Making The Transition From Employee Benefits Part-Timer To Established Pro

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The purpose of today’s talk is to share with you six strategies that will help you grow your employee benefits practice, leverage current relationships into more life and disability sales, improve your top and bottom lines, and have more fun.

1. Serve clients, not customers.

We oftentimes hear those terms used interchangeably, but there is a difference. A customer buys widgets and other commodities and is primarily concerned with price, terms and conditions. Having customers is only advantageous for litigation and E&O purposes, as the professional standards are far lower for the widget salesperson.

We view a client as one of two parties in a counselor relationship, where one is providing advice and the other is acting as a business partner and providing value-added planning solutions. Firms must decide whether they want clients or customers for their benefits practice. I submit to you that “clients” will be more loyal, profitable and fulfilling to work with.

2. Be a specialist, not a generalist.

We prefer being specialists and focusing on three core industry groups. This path has a number of advantages. You develop a reputation within those industry groups, which enhances your ability to leverage relationships and obtain referrals.

Additionally, you develop a keen understanding of the culture of those industries in which you specialize. This makes you more valuable as an advisor. Last, specializing allows you to deploy and target resources to markets that will generate the greatest returns.

3. Use a client suitability questionnaire.

You’ve decided that you want to develop client relationships and have defined your target market clearly. How do you avoid drifting back to your old ways? The client suitability questionnaire is a tool that can help you focus your energies appropriately. You use it to determine if a benefits prospect is appropriate to engage as a client.

We may not always complete the questionnaire in the prospect’s presence, but most of the questions are asked at the initial consultation. We are vitally interested in determining if a prospect is an appropriate fit. The areas of concern include:

–Are prospects the right size and in the right industry and geographic location?

–What is the three-year vision for the company? We want clients with big visions.

–What is the prospect’s most valuable corporate asset? Obviously we want companies that value their human capital.

–What is the company’s benefits philosophy? Is the firm more concerned about price or providing high-quality benefits?

–What is the firm’s employee contribution strategy? Is the company paying a large percentage of the benefit premiums or passing through the maximum amount to employees?

–How would the company allocate a 25% rate increase between the employer and the employees?

–Who handles the company’s administration internally? What is the individual’s training and background? We would much prefer to deal with an HR benefits professional than an office manager who has limited knowledge of benefits.

–Are annual employee meetings scheduled and mandatory? We insist on at least one annual meeting so we have the opportunity to not only explain the benefits but also point out planning concerns and, thereby, anticipate potential problems.

–How does the company determine employee benefits and satisfaction? Does it regularly distribute an employee survey?

–Do we have or can we develop relationships with senior-level managers (i.e., the president, CEO or CFO)? HR managers are important, but they’re not always the decision-makers. Additionally, what happens if and when the HR person leaves?

4. Develop strategic outsourcing partners.

Once you decide to target specific markets, your most difficult challenge will be what to do with legacy clients and inappropriate referrals. One solution is to create an outlet for that business. There are certainly other benefit firms in your local market that work in your non-target market areas.

We have formed strategic partnerships with firms in Los Angeles, San Francisco and New York to outsource all non-target cases. Through revenue-sharing arrangements with these partners, we secure an ongoing revenue stream and maintain our referral sources without abandoning our core competencies.

5. Leverage technology to create a unique differentiator.

Over the last 24 months, we have embraced technology for our clients’ benefit. For a fee, we offer clients an online, read-only Website dubbed the Employee Benefit Center, or EBC, that features the firm’s colors, logo, mission statement and other company information. Site users can access their employee benefits, applications and claim forms and do a doctor search.

The employer can include other HR information, such as vacation/sick leave policy/paid-time-off policies and holiday schedules. Many of our investment firms also have posted compliance forms. All business clients, both large and small, can use the Website for employee communications.

What benefits do employers realize from the Web portal? Upon completion of the site, they can clean out their office! No more network directories, no applications, claim forms, new hire employment applications, government forms, direct deposit payroll forms, etc. The site becomes the repository for all benefit and HR information.

We also deploy HRIS systems, which automate employee enrollment and benefit management processes. The systems let employees input their personal information online, eliminating the need for multiple paper applications. The information is transmitted electronically to all the carriers, the payroll provider, and COBRA, flex and 401(k) providers. The systems additionally provide billing reconciliation, PTO-tracking and management reporting functions.

Technology absolutely has changed the way we do business and has created a differentiator in our market. It has allowed us to close a higher percentage of our prospects and has shortened the sales cycle.

6. Convert employee benefit clients to individual clients.

Thirty-five percent of our revenue comes from individual life and disability sales. This is a direct result of leveraging the relationship we have with corporate clients. Our primary marketing thrust is to capture corporate clients in our target market and then leverage these relationships to develop individual business.

The low-hanging fruit in the individual market is multi-life executive disability insurance. Possibly, all of your benefit clients that have LTD (and perhaps some that don’t have LTD) are candidates for multi-life executive disability.

When showing LTD to benefit prospects and clients, our approach is to present a multi-life disability option, which can create parity between highly and non-highly compensated employees. Rates are guaranteed until age 65, and the policies are portable–a valuable feature in our mobile society.

If you embrace the multi-life disability concept, you can increase your revenue substantially. Additionally, these policies can provide you with an ongoing stream.

In Closing

We’ve discussed six strategies that significantly can impact your top and bottom lines. I suggest that you pick one or two ideas that can be applied to your practice. Also, make sure that you have the appropriate staff and tools to implement the necessary changes to take your business to the next level.

That may require hiring another person or replacing a person you have. These are not easy decisions, but if you want to grow your practice, these are the kinds of issues you’ll need to address.


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