I hear the term “value added service” used in the benefits world all the time. Brokers always tell me about their value added services. What does value added service mean anyway? For most it implies “free”. We all know that nothing is free. I think it is time to bury this term. In fact I think it actually has negative implications in many ways so let me tell you why.
I googled the term “value- added service” to see how firms would define it. One definition I found came from a website www.wisegeek.com. They defined the term as “options that complement a core service offering from a company but are not as vital, necessary or important.” I guess that sounds right. For most benefits firms “value-added service” means, “I am going to give you something for free that I generally don’t do.” And I agree with the above definition that says it is not as necessary or important. The problem with what I see many benefits brokers doing is putting this label on things employers feel are important. If I am an employer and have something important to me who would I get it from, a vendor that makes it a core service or one that labels it a “value-added service”? If it is important then I would hope whoever I buy such a product or service from is good at it.
Value-added services for most brokers are listed on the last pages of their proposals. It is the fifth tab from the left on their website. It is the final 5 minutes of a sales presentation. It is presented with a level of importance that is, well, not important. To me value added service is like buying a hamburger at a Chinese restaurant. They don’t really want to sell hamburgers but for those adults with kids that don’t like Chinese food they do have something for them. If I wanted a hamburger I would go to Five Guys and not a Chinese restaurant.
In the benefits world some things that many brokers have labeled as value-added services are really becoming core to what a benefits broker should be doing. I won’t get into what I think all these services are but if the employer feels the services are vital then they will dismiss the firm that labels the service as “value added”. It will appear as unimportant. If a broker can’t make it a core service then maybe they shouldn’t be providing such a service at all. And if another broker is offering such a service as a core service then your labeling it as “value-added” may be detrimental to making a sale.
So there you go. The term “value-added service” shall be forever banned in the benefits world. And I will add that as a consultant to brokers this advice is not a value added service. It is what I do all day.