Turning the Benefits Service Business Upside Down

A few weeks ago I was speaking at the Silicon Valley Association of Health Underwriters Conference where Zenefits CEO Parker Conrad was also present and took questions from the audience. He had an interesting response to a question that reminded me of an article I had written back in 2009 titled “Xbox – The Future of Employee Benefits Customer Service”. (You can see the article here: https://joemarkland.wordpress.com/2015/05/04/xbox-the-future-of-employee-benefits-customer-service-reposted-from-2009/ ) He was asked if he provided any face-to-face service. He responded somewhat tongue in cheek by saying that he did as long as they could walk to the meeting. Of course that got a chuckle from the audience. I don’t remember his next comment word for word but he followed that by saying that most brokers assume that providing service via the phone and/or web conferencing does not yield the same result as an onsite visit. He totally disagrees with that premise. He believes that centralized services using the latest technology can actually provide a better result. To most brokers this is turning the benefits business on its head.

Many benefits brokers live by the idea that face-to-face onsite service is the only way to provide quality service. Certainly that is one of the advantages a local broker has, being local. But times change. Web conferencing and even high definition web conferencing is now readily available to even a small business. Consumer behavior has changed too. Some CEO’s and others find it acceptable to meet via the web. Some may even find the company that can do this to be more forward thinking or technologically advanced. Others will see web conferencing as being more cost conscious. Millennials have no problem speaking to others via the web, smart phone, text messaging or chat. It is becoming more commonplace.

Onsite service also has a capacity problem. Imagine I am a national brokerage firm that has a highly skilled actuary or underwriter on staff. If that actuary were to drive one hour out to meet a client, meet for an hour, and then drive back that one meeting would take 3 hours. During those same three hours that same actuary could attend 3 web meetings. In this example onsite service is 3 times more expensive than a web meeting. Imagine if the client were getting billed for that time. In my 2009 article I used selling voluntary benefits sales as another example. Insurance buying events such as getting married, having a baby, buying a house, happen every day. It is simply not possible to be face-to-face for everyone when they have a need. Setting up an automated sales/service center can result in more sales.

The benefits business is seeing commissions being cut in many markets. I have a feeling this trend is far from over. Imagine if you had to build a business for a future benefits world where revenues were lower or you had to compete with other brokers on a fee for service basis. You would need to build a business that leveraged the latest technologies to improve operational efficiency. You may want to help your clients leverage technology so they too could be efficient in managing their HR and Benefits reducing manual service demand. Employees in this new world would have ready access to such needed information via the web and mobile. They would be able to speak with a benefits broker face-to face via mobile or web. In this new world you would be able to deliver state of the art technology and high-quality services to more customers at a lower cost. If you were to do this you would be building a business model like, well I guess, Zenefits.

While onsite meetings may not go away it is naïve to think that another company could not deliver a similar level of service and advice via the web and mobile using technology. Brokers fixed on old beliefs will be surprised when they get a BOR where the other broker has no local representation. It is happening today and will become more common in the future.

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