"Voluntary is fundamentally a retail business.” In most ways, this is a true statement. Its intent is to underline the difference between voluntary and traditional employer-paid coverages. In voluntary, the employee is the buyer and the employer a gatekeeper. In voluntary, needs are defined at the individual level and purchasing is based on personal needs and preferences.

In voluntary, enrollment is an assessment, needs-based, relationship-building process, while in employer-paid coverages, it is an administrative process. Voluntary producers need to understand these issues, to learn about employee coverage gaps and employee-buying processes, and, basically, learn to communicate with and understand the employee perspective.

It’s easy to be swept away by these facts and conclude that voluntary is an individual insurance, retail-selling business, that it’s the traditional insurance agent function, only taking place at the workplace. That would be wrong.

It’s amazing how many insurers and brokers, peeling only this one layer off of the proverbial onion, start their strategy discussion with the need for consumer marketing: consumer segmentation, categorization, needs analysis, value proposition creation, etc. These are laudable (and ultimately useful) tasks, but they do not drive overall sales. Segmentation that has its goal to focus on attractive segments, at the expense of others, assumes we can pick and choose which employees we want to engage and enroll.

The danger is that we forget that pesky gatekeeper. The first step in selling a voluntary account is to sell the account. Business segmentation, segment strategies and employer value propositions help get us new accounts. Our success at getting new accounts determines whether we ever get to engage the employees. Employee-level strategies are exciting in that they drive things like sales presentations, tailored language and bundled product solutions, but they do not drive account prospecting, approaches, or closes. And if we don’t get the account closed, all of the employee segmentation will be wasted.

Once the account is landed, we want to serve all employees that we can profitably underwrite to the degree we can build employee relationships that recognize their differences and similarities. But first, we need the account. We’d rather get 30 percent participation in thirty accounts than seventy percent in one. Once we reach the point we can sell thirty accounts, we’ll sustain our businesses and focus on increasing participation.

It is this fact that keeps voluntary squarely within the realm of employee benefits rather than individual insurance. Your carrier may have tailored brochures and bundles for soccer moms and empty-nesters, but do they help you get new accounts? If not, demand more.

Instant Insights /

The mind of a retailer

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