From the October 2011 issue of Benefits Selling:
Some people in the industry call it “big game hunting.” Or they might refer to it as “reeling in a big one.”
No matter what it’s called, selling a benefits package to a large employer isn’t as easy as it sounds. Developing a business around big clients can be time consuming, labor intensive and cost real money. And once the client is signed up, brokers have to continue working closely with them to make sure they stay clients. Remember, there are other brokers out there looking to gain business from large employers, too. It can be hard on industry rookies. Sales can take years to complete. Sacrifices will have to be made.
But big clients are worth pursuing even beyond the commissions. Brokers will develop a relationship with an organization and be called on to help make important decisions that affect profitability or solvency. The broker is a key person in an employer’s ability to obtain and retain talented employees. Brokers will advise officials at the highest levels. They’ll be considered experts on regulatory matters and cost reduction.
There’s no standard for how many employees constitute a large employer, but generally, an employer of 500 or more falls into the category. And they don’t always have to be Fortune 500 companies, either. Universities, governmental entities and even unions are all in the marketplace for benefits packages—and each have their own set of challenges. And that’s where opportunity lies.
In today’s uncertain economic landscape, there are ways to get these clients. Some are tried and true, but others require brokers to get creative.
“I think we all need to think outside the box,” says Tom Stautberg of the Cincinnati-based Stautberg Benefits Advisors. “But sometimes we need to challenge ourselves to throw that box away. Challenge ourselves to look for solutions in different ways.”
Do the research
In any large organization, there’s most likely going to be a committee of people making the decision on benefits packages. Industry veterans say these committees usually consist of the chief financial officer, the head of human resources and the person in charge of risk management. If a union is involved, expect a representative and maybe a little confrontation. Some organizations will appoint employee representatives. There may even be some elected officials on the committee.
Michael McIntyre, author of The Authentic Salesman: Mastering the Art of Transforming Real Objections into Real Transactions and CEO of Dallas-based Benefits America, says brokers have the ability to identify decision makers on the Internet with ease.
“You’ve got to do your research,” McIntyre says. “You’ve got to find out everything about the company. You have to find the HR person. And with the Internet, it’s easy. You just have to spend the time.”
Also, brokers in areas where businesses are migrating such as Georgia, Texas and Colorado can still depend on traditional forms of media such as newspapers and business journals for new prospects moving to town.
Look for an ‘in’
When new products become available, pitch them to clients. Many employers are looking to offer new benefits to the employers in the interest of keeping talented employees. A broker can offer those benefits and win a small portion of a client’s business—enabling brokers to develop relationships that can bear fruit down the road.
And, small employers have the ability to become large employers. Industry veterans say brokers should sign some smaller clients and position themselves to grow along with the company. Loyalty still counts.
Many brokers still develop contacts with clients the old school ways: handing out cards, attending chamber of commerce functions and getting referrals.
But are brokers on the look-out for prospects at their church or their kid’s Little League games? McIntyre says all brokers should be looking to develop relationships in all places, even in ones that may not seem so obvious.
One broker who’s doing that is Keith Tallmadge of Millennium Benefits Consulting in Sandy Springs, Ga. Tallmadge has a program in which employees on target to meet their sales objectives can take a day to volunteer in their community—with pay. The practice increases the visibility of Tallmadge’s employees in community, and helps them meet potential clients.
“Our people meet other people from companies and we develop relationships from there,” Tallmadge says. “Some times our guys are working alongside the CFO from a large company.”
Be a consultant
Brokers need to present themselves as people with solutions. When the market changes, be the first broker to approach large employers with solutions to their new business challenges. The more brokers present themselves as problem solvers, the more likely they are sign up new clients.
Also, find out if the benefits packages line up with the employer’s goals. Most successful brokers say if an adviser and a large employer have similar strategies and philosophies on benefits packages, the deal can actually come as an afterthought. It’ll take some research, but it’s worthwhile.
“We look at the size of the employee workforce, how complex the group is and what are their philosophies on benefits,” Tallmadge says. “Are they different from us? If they are, I’m beating my head up against the wall.”
Help the bottom line
Some brokers are now locking in rates for up to four years. The practice is a benefit to employers because it allows them to budget costs a few years out with accuracy. Most employers struggle budgeting health care costs, but not if you lock down the rates.
Stautberg is a pioneer in this tactic.
“We allow them to stabilize their health costs for three years,” says Stautberg. “We’re one of three in the country that have the ability to do this.”
Stautberg also has experimented with other ways to help clients keep costs low. Tele-medicine was a new thing in the industry five years ago. Today, he helps clients by offering packages that include Stat Doctors—a company that provides 24-hour access to emergency room doctors who can diagnose non-emergency ailments for employees over the Internet. The service allows employees to determine whether they need to visit an emergency room, which could save employers thousands of dollars.
“It’s all about managing trend,” Stautberg says. “It’s about managing claims dollars.”
Make it easy
A lot of times, brokers can snag a client by doing the grunt work. It’s not unheard of for brokers to handle enrollment forms, open enrollment periods and other functions previously handled by an organization’s human resources department. Decision makers want to make sure the transition will go smoothly and make sure a pile of new work isn’t generated by their decision.
“We got a 3,000-person company because their current relationship at the time wouldn’t help them with the paperwork,” Tallmadge says. “We put two people in the system and they did entry for two weeks during the open enrollment period.”
McIntyre put it more bluntly: “If you can’t get a third-grader to do it, that needs to be fixed.”
Sometimes, in an effort to save on costs, an employer will institute a wellness plan. Or, employers will have to make a change in benefits plans that won’t exactly excite a majority of their employees. Stautberg says brokers who demonstrate the ability to communicate with employees effectively will get more clients.
“It’s a partnership,” Stautberg says. “It’s working with the employer, the employee, the insurance company and their adviser. It’s making sure we’re listening to the needs that they have and communicating to them and their employees what it is they want to do.”
Prepare to sacrifice
More and more brokers need to demonstrate a willingness to set aside traditional forms of compensation. That could mean giving up commissions all together and moving toward consulting fees. And in today’s economy, clients will ask brokers how they’re compensated. Answers to those critical questions can make a difference. Industry veterans will say that a little transparency doesn’t hurt.
Sacrifice also could filter over into client retention, too. A few years ago when the economy really tanked, Tallmadge gave his customers a break on their rates. For some clients it didn’t amount to a lot of money, but the effort meant something to them. And that kind of action manages to get spread around the prospective clients.
Work on you
It’s always important to be learning new things. McIntyre likes to point out how doctors make about $180,000 a year but they have to continue their education every year. Salaries for top salesman can reach $240,000. But, McIntyre asks, how many salesmen continue to learn their craft? Not many.
“What sales people should do is attend seminars, go to trainings and read some books,” McIntyre says. “Hone your craft. And taking short cuts is really death to a salesman.”
Know the law
There’s a lot of speculation on how the Patient Protection and Affordable Care Act will affect the business, so brokers need to focus on how it will affect their clients. Keeping clients can be as important getting new clients in a time of economic instability. Stay abreast of the changes and talk them over with your clients.
Some industry veterans think small clients will not purchase benefits packages from brokers after the exchanges are started. Others think the business will adopt and move forward.
McIntrye’s advice is to plan on the law taking effect and use creativity to stay afloat and even prosper. Asked what it will take for brokers to survive in the uncertain years ahead, McIntyre says to look at it as a time of opportunity. And if that doesn’t work, just have a little perseverance.
Nathan is a Denver-area writer. He can be reached at firstname.lastname@example.org.