I recently heard a broker say,

"The thing the average public does not know is that brokers are a free service."

Wow. Really?

This stopped me in my tracks and had me replaying the words again to make sure I heard them correctly.

The thing is, this wasn't just a casual conversation I overheard. This was a comment made in a very public forum and made from the perspective of an "industry expert".

If you think this is a brilliant marketing strategy to promote your agency as a free service, then I highly recommend you rethink your position quickly.

  • With this position, you are competing at the most basic, commodity-driven level of the industry. Which means you've left no room for changes – like what's going on daily in this industry. What happens when those carriers, the ones paying for you to provide this "free service", cut commissions?
  • Another thing that comes to mind is value. When telling people what you do is "free", you're telling them that it's not worth their own money to spend on what you have to offer. But if you can get it on someone else's dime, then sure, why not?
  • And keep in mind that "free" is never actually "free". Someone is paying for it in some way. And in the case of individual and small business health insurance being purchased through an agency, that someone is the buyer himself.
  • If a client isn't paying anything for your service, why should they have any loyalty to your business? As soon as they can find another company who offers them a lower price along with the same "free service", what's to keep them from moving?
  • "Free" does not typically equate well with quality. If you were in need of legal help, would it be your preference to use the court-appointed attorney or hire one who specializes in your area of need? Not only do you get what you pay for as a consumer, but also as a business you get the clients you attract with your message. Remember, Navigators are also a "free service."

I can't imagine a worse way to set your business up in the eyes of your clients. We all work too hard to earn the respect and trust of clients and prospective clients to de-value our ourselves and our offerings in such a way. I recognize that this has been some of the broker community messaging over the years, especially when the idea of free services came into vogue many years back, but it is well beyond time to move away from that model.

Of middlemen and commodities

Thinking of your business as merely a distributor of someone else's product puts you in a position of having to justify your existence.

Instead of seeing your business as a commodity offering, focus on what that product does or allows for the client. Turn your commodity into a valuable offering.

An excellent example of what this looks like is King Arthur Flour. Really, does a product get more commoditized than flour? Yet, this company has turned the commodity product on its head. Not only have they turned their website into a learning center around all things baking, but they also take their baking education on the road. They are teaching people how to be better bakers, how to better use their product for baking, and thus, they increase the need for their product. Now this is a brilliant marketing strategy. And I bet it's fun too!

But who's going to tell?

When you can see your business from an angle like this, you can then stop hiding behind the distributor model and trying to justify your work by hiding your fees in the client premiums, hoping they won't notice. Not only is the public smart enough to get that hidden-fees thing figured out, they're smart enough to go seek it out. And the information is readily available on this thing called the Internet.

And if clients and prospects don't find out on their own that you're not actually free, you can bet that a competitor will come along and find a way to point that out to them. Would you rather have the "What you're paying me/What I'm worth" conversation with your client, or would you rather a competitor had that conversation on your behalf?


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