Vendor Relationships Not Working? Is It Them, or Is It You?

Kevin Trokey on March 30, 2020

Now is the time to focus on unleashing the potential of advisor and vendor partnerships. When these two groups work together collaboratively, effectively, and strategically they become the most impactful partnership enjoyed by business owners.

Oh, the potential

Everyone recognizes the traditional business advisors: attorneys, CPAs, and bankers. The impact each can make is clear. Less evident though may be the impact potential of a benefits advisor and his/her broader team, but it is arguably the most wide-reaching and significant business relationship of all. When an advisor-team does their job the way their clients need them to, they impact the business of those clients strategically, operationally, financially, and (because of the impact they have on the individual employee) emotionally.

However, to do so, advisors must work cohesively with the right vendor-partners to deliver that impact. It does take a team.

Choosing who will be on that team is becoming increasingly difficult. However, that challenge pales in comparison to creating a cohesive and effective team engagement once the players are in place.

A growing list of needs

Business owners need help more than ever before. It has never been more challenging to run a successful business, protect margins, or attract/retain employees.

The traditional focus of benefits advisors helping to design and install insurance solutions is now just the beginning. Today’s advisors need to further engage and empower employees through effective communication strategies. Advisors must help improve operational efficiencies with the right technology solutions. They need to be setting long-term HR/benefit strategies to complement their client’s broader vision. And, they have to do all of this while ensuring every compliance i is dotted and t crossed.

The complexity of the original need

Oh, remember that traditional insurance responsibility? Yeah, the unbundling of plans we have witnessed over the last several years makes this a more complicated puzzle to complete than ever before. The number of moving parts and partners required (TPA, PBM, stop-loss, DPC, centers of excellence, and on and on) overwhelms most.

You know you need more

Advisors universally recognize the need to expand their resources to address the growing list of client challenges. While it's easy to understand this need, satisfying it successfully is a big challenge. 

It takes a well-orchestrated investment of both time and money. Most advisors are relatively quick to get out their checkbook for the financial investment, but they also have to get out their calendars to ensure they learn how to use their new resources successfully.

To whom are you going to “write the check”?

Not every new partnership requires an up-front financial investment, but choosing the right partners is critical regardless. Not only are there a significant number of new solution categories advisors need to access, but there are also countless new vendors competing for attention and business at every turn.

How do you decide what relationships are critical for you?

Start by doing a deeper dive into your ideal client to understand what solutions they need. Don’t fall into the trap of trying to be all things to all people. Once you identify the needs of your client, determine which you are best suited to address for them.

As you see holes in your current offering, prioritize the order in which you need to fill the gaps. No single gap is easy to fill, at least at the required level. If you try to plug all of your holes at once, you are all but guaranteeing failure. Success requires a systematic, manageable, and strategic expansion of your abilities. The acquire-new-solutions-to-simply-check-off-boxes approach is a fool’s game.

As you approach each solution category, do your research. But, know that you cannot depend entirely on the experience of peers (positive or negative) to make a final choice. Having access to this kind of information can help you shorten the process considerably, but you cannot leave the complete vetting of vendors to someone else. What worked for them may or may not work for you.

Finally, despite what every vendor may tell you, there is no perfect solution. Searching for a perfect solution is a quixotic pursuit. Instead, focus on what matters most:

  • Finding a solution that is easy to use
  • A solution that addresses the basics of what clients need
  • You have confidence in the vendor’s ability to remain relevant
  • It’s provided by a vendor you would be comfortable introducing as part of your team

Now the hard part – your calendar

Too many advisors feel that once they have chosen a new partner, acquired access to a new resource, and become familiar with its features and benefits, the work is done. And, THAT is why so many brokers never deliver the full impact their clients need.

While it’s obvious to you why each solution is needed, helping your prospects/clients see the same may be more difficult. However, before you can educate them adequately, you must educate yourself. Anybody can describe the features and benefits during a capabilities presentation, but your clients need you to help them understand so much more.

When the student in you is ready, your inner-teacher will arrive

You must understand the answers to the following questions. Be the student first, and then you can be the teacher your buyers need you to be.

What problem does the solution solve? It's okay to state the obvious, but it does have to be stated. Buyers don't want to discuss the products you have to offer, but they are always interested in discussing the problems they have that make the product necessary.

What is the operational and/or financial impact for a business if they don’t solve the problem? This one won't be easy for an advisor who has depended on a spreadsheet to make their case. But, there are always negative business consequences for unsolved problems. If you can't help the buyer see the cost of not addressing their issue, you will struggle to get them to take action.

What challenges likely stand in their way of fixing it themselves? Most challenges faced by any one prospect/client are faced by most other businesses. By discussing the challenges, you demonstrate your understanding of their situation and permit them to not be perfect.

How can you show them an implementation path that addresses the problem and leads to better results? By laying out an implementation plan, you give buyers confidence in your ability to ensure they get the results they need.

What does improvement look like on the backside of implementation? It’s not enough to scare a prospect/client with new insights about their current situation. You need to help them see how much better their situation will be once you’ve fixed their problem. Early on, you won’t have those success stories, but your new vendor-partner can help fill in those gaps by sharing other success stories. Over time, your stories will become more personal.

Manage the relationship

Knowing your new solution at the level described above will give you a huge advantage over competitors who have access to the same solutions. But the hard work still isn’t done. Like any relationship, your vendor relationships have to be nurtured and maintained. Plan for what success in the relationship looks like with each vendor.

  • How often will you meet to discuss current clients and future opportunities?
  • How will you include them in new client acquisition?
  • How will you manage co-client relationships?
  • How can they assist with implementations?
  • How can you help one another grow?

Never before has it been more critical to have successful vendor-partner relationships than it is today. Not only is a successful ROI (time and money) on the line for you, the improved results your client depend on you delivering are as well.

Photo by kisscsanad.

Topics: Selling + Process, Vendor/Broker Relationship