I was making a presentation to a brokerage firm a few years ago about how they can position their firm more competitively in a rapidly changing environment. In the middle of the presentation one of the producers asked me a question and that was, “Do you have Wellness Newsletters”? It was an odd question at the moment because it came out of left field but it was indicative of what was going on in the benefits brokerage community. With the benefits brokerage business being somewhat commoditized and more competitors entering the space benefits brokers have been looking for that “silver bullet” – that one thing that they think could separate their firm from the pack. That silver bullet that can help them attract new business.
Vendors have capitalized on the benefits brokers desire to find the “silver bullet” so their advertisements and sales pitches promise a “competitive advantage”. Then they say you better buy/sell their product or the broker down the street will first. And of course when that broker buys in, you, the procrastinator, the indecisive one, will lose.
That gets me back to this producer who asked me for Wellness Newsletters. My response to his question was, “Do you want Wellness Newsletters or a competitive advantage?” Somewhere along the way he was sold the idea that Wellness Newsletters was something he needed and that would give him a competitive advantage. And of course the broker down the street was offering their clients Wellness Newsletters. He responded to my question by acknowledging he was looking for a competitive advantage. The marketing machine of some company had convinced him that Wellness Newsletters was a competitive advantage. I can tell you Wellness Newsletters are not a competitive advantage. In fact my benefits broker emails me a Wellness Newsletter every week. I immediately hit “Delete”. First, I never asked for them and he never asked me if I wanted them. They just started to show up. Second, I already subscribe to a WebMD Daily Newsletter and I don’t need his.
This gets back to the bigger problem for benefits brokers. For the past 10 years they have been sold a “competitive advantage”. First it was benefits websites, then Wellness Newsletters and Compliance Alerts, now it is online HR Libraries, and HR Call Centers. All cost the broker money and none of these solutions delivers a relevant competitive advantage. Usually, within a short period of time, every broker is offering the same thing – it doesn’t generate any new business – and they are saddled some multi-year contract and ongoing expense. While the broker was looking for some way to tie the client to them it is the broker who actually is the one being tied down or handcuffed to some vendor.
So what should a broker do? First I would say start with solving real client problems. Don’t follow the guy down the street. Think logically and don’t respond to every sales pitch or press release you see about how some broker is doing some grand thing. Ask your clients what they want and make sure they know you are the resource to solve their real problems. By approaching the market in a thoughtful way and by doing proper strategic planning you will feel secure with your market position and not have to worry every time you here of some wild promise of some grand thing.