We see so much fear in the market. We see the fear of new competitors, technology, and of missing out. Many of you fear for your very ability to survive in this changing industry. Talk about exhausting!
It’s time to do the hard work that allows us to leave that fear behind. It's time to do the hard work that allows you to be the type of competitor that strikes a little bit of fear in others.
Traveling the commoditized path
One of the places we need to start from is an understanding of exactly how people are competing in the market. Until recently, most of the industry competed in the same way—it didn't matter if you were a large national brokerage or a small mom-and-pop, the approach was the same.
The typical broker shows up at renewal, looking for a chance to quote. They’re armed with a spreadsheet, a capabilities presentation, and promises of better service. Leaving nothing to chance, they brag about how much the carriers love them and have anointed them with “platinum status.”
Does that sound familiar? If it doesn’t describe you, it probably describes a good portion of your competition. This industry has latched on to this commoditized approach and refuses to let go. As their fear sets in, some will compete on price more than ever. In all honesty, it could work for some.
However, to do so successfully, they need to make considerable investments in technology to create the efficiencies that allow them to accept the inevitably smaller profit margins. Of course, they’ll also have to make up for the smaller margins by writing much larger volumes of new business. These agencies must become very sales-intensive organizations, constantly writing new business.
Embracing the consultative path
There is another by-product of embracing this approach. Because of their relentless focus on new business, they’ll experience a churn and burn. There will be a churn and burn of their clients, and there will be a churn and burn to their sales team.
When it comes to their producers, they’ll have no choice but to develop and execute a plug-and-play model. It's going to look a lot like what we've always seen on the life insurance side of the business. Hire a bunch of salespeople, throw them against the wall, and see what sticks.
But for any of you paying attention, you know your clients need help, advice, and guidance in ways they never have before. They need help that can’t be delivered with a commoditized approach. That commoditized approach is leaving a void in the businesses of your clients—and that void created the opportunity and demand for a consultative approach.
When you come to a fork in the road
Those who take a more consultative path and leave the commoditized approach behind will find a much more pleasant journey. Instead of competing on price, you'll be competing on results. Because those results are so much more impactful than a simple price on a spreadsheet, you'll be able to demand a premium for your efforts.
Admittedly, not every employer will be looking for this type of relationship with their broker. Some will never want you to be anything more than a vendor to them. Because of that, you will have to be more selective about whom you choose to work with and whom you allow the privilege of having access to you, your team, and your resources. And it will be a privilege.
Face your fears
The hard work doesn’t end with you. Because this is a more sophisticated value proposition, it will take a more sophisticated team effort. But deciding how you will compete in the market has never been more critical to ensuring success.
Be prepared; the temptation will be to go down that commoditized path because it’s the most familiar. But for most, going down that commoditized path will be nothing more than a vain attempt to outrun their fears.
Instead of running, turn and face those fears head-on. Do the hard work necessary to deliver what your clients need. Do this, and soon, you will be the feared competitor who has your competition running in fear.
Photo by aitormmfoto