As you probably saw in a previous post, Kevin recently spoke at the 6th Annual Employee Benefit Adviser Summit in Dallas, TX. His message was about making changes in the broker model due to current and coming industry challenges.

Brian Kalish, with Employee Benefit Adviser, attended Kevin’s session and wrote up a great synopsis of the message. Follow the link below to read the full article.

Advisers must move ‘faster and stronger’

DALLAS – It is time for brokers and consultants to face the much talked-about upcoming challenges head on and move forward “first, faster and stronger” than their competitors. The goal is to make clients understand that the cost of doing nothing might be the “most expensive, more detrimental thing to a business,” a former adviser said Monday.

Click here to read full article at Employee Benefit Adviser.

Photo by ptooey.

@wendykeneipp

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Independent insurance and benefits agencies face pressures from changes brought about by healthcare reform.

September 21, 2011 - St. Louis, MO - Kevin Trokey, President & CEO of Benefits Growth Network, has been selected to speak at the 6th Annual Employee Benefit Adviser Summit. He will present on the pressures benefits and insurance agencies are facing as a result of healthcare reform and what they can do to successfully navigate the transition.

Trokey believes that the current changes facing the industry may look familiar, but are actually quite different than the challenges the industry has seen in the past decades. He will explain the differences, explore the challenges, and offer ideas on how to modify the agency business model in order to compete in a new environment.

“There are unprecedented opportunities for growth in the benefits industry as a result of the healthcare reform changes being forced on agency businesses. However, without a purposeful plan of how to make a successful transition, many brokers and agencies will find themselves victims and casualties of reform,” says Trokey.

In the session, brokers will get an idea of how to create a new vision and strategy for their agency that takes a different marketing approach and value proposition to clients. Through this new model, agencies focus on helping clients build more successful businesses by improving the investment employers make into their staff.

The 6th Annual Employee Benefit Adviser Summit will be held in Dallas, TX September 25 – 27, 2011. The conference is focused on building businesses by providing the basics for broker/adviser staff, as well as advanced marketing and management techniques.

About Benefits Growth Network
Benefits Growth Network, based out of St. Louis, MO, is an international membership-based consulting firm specializing in growth strategies for independently owned employee benefits agencies and brokerages. Through the exclusive Benefits Growth System™, members get individualized planning, coaching, training, use of proprietary systems and access to a network of thriving benefits agencies. For more information about Benefits Growth Network, visit www.benefitsgrowthnetwork.com.

Kevin has been selected to present at the 6th Annual Employee Benefit Adviser Summit in Dallas, TX. The conference starts this coming Sunday, September 25 and runs through Tuesday, September 27. 

His topic is about the pressures that benefits and insurance agencies are facing as a result of healthcare reform and what they can do to successfully navigate the transition.

While the current changes facing the industry may look familiar, there are significant differences from the challenges the industry has seen in the past decades. He will explain the differences, explore the challenges, and offer ideas on how to modify the agency business model in order to compete in a new environment.

Are you attending the conference? If so, be sure to connect with Kevin in person. He’ll be presenting Monday afternoon in the track Health Reform Impact on Brokers. Want to get in touch? This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Also of note, one of our BGN partners, Jen Benz, Chief Strategist & Founder of Benz Communications, will be a Key Note speaker on Monday morning. If you’re there, be sure to attend that session, as well.

@wendykeneipp

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Broker of the Year. That’s quite a title to achieve. There are thousands of licensed independent benefits agents, and to be selected as THE one that is considered a stand-out takes a pretty different twist on the usual in order to be selected.

This year, Benefits Selling magazine selected Mark Lacher, partner with Lacher & Associates, as their 2011 Benefits Selling Broker of the Year. There has been a lot of excitement generated about this: an on-stage presentation at 7th Annual Benefits Selling Expo in Nashville, TN, press releases, Tweets shared, and a great spread in the Benefits Selling magazine with fun photos of Mark looking quite snappy.

Now, before going any further, I need to let you know that Lacher & Associates is one of our BGN members. So, am I a bit biased? Definitely. But is he deserving of this award aside from my bias? If you believe that businesses need to evolve with the changing needs of clients and the marketplace, then yes, he is.

So what was it that got him to this place of recognition?

Thinking differently. Not being bound by the confines of the business model given to him by the traditions of the broker/agent system. Sure, it’s been a good business model for them for 53 years, but as he and his brother took over the business from their father in 2007, they brought with it a new perspective. That all businesses need help – everyone needs a coach, a mentor, an advisor, a sounding board, someone to listen and help them think through things. Good as we may be individually, thinking alone and solving all of our own issues will just not yield the same results as having some additional trusted ideas and help along the way.

That’s what Lacher is doing for clients.

He knew the benefits industry would be changing, and he knew he had to start doing things differently - and a small tweak here and there isn’t enough to save a business or an industry under attack.

Mark took the leap to radically think about his business and his clients’ businesses from a completely different perspective.

Instead of thinking,

“How can I find more clients or sell more products to make up for lost commissions resulting from healthcare reform?”,

he started asking,

“What challenges are my clients facing? What changes are they experiencing as a result of health care reform? Or the economy?”

The answers are many and varied, and they are the same challenges that Lacher himself was facing in his own business.

He had been seeking help to take his firm to a new level and drew from that same concept to use with his clients. If he needed help navigating through changes, plateaus, and being an innovator and leader, didn’t everyone else? Well, the obvious answer is Yes. And he decided to take what he had and what he knew and build upon it to grow into something that is beginning to look very different from the typical insurance broker.

So yes, Lacher’s vision for what he could do for his clients is worthy of note. But an even bigger lesson to take away from Mark’s story is the focus and speed with which they embraced the changes to their business model.

Instead of thinking about making these changes, or dabbling in a few trials here and there while waiting to see what happens as health care reform unfolds over a span of four years, he jumped in and made it happen now.

Regardless of what happens with exchanges and commissions, Lacher has squarely positioned himself and his firm to be a valuable resource to clients – medical policies & benefits packages aside. His clients turn to him for advice to help better manage the performance of their businesses.

I applaud Mark and the entire Lacher team for their foresight, tenacity, and courage to take a good business and turn it into a great business by thinking and acting differently and becoming a stand-out player in their industry!

@wendykeneipp

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You’ve all heard the story of the twin boys with such extreme personalities (one a complete pessimist and the other a complete optimist) that their mom took them to a psychiatrist. 

The psychiatrist first wanted to visit with the pessimist and took him into a room filled wall to wall with new toys.  Immediately, the little boy burst into tears.  When the psychiatrist asked why, he explained,

“Oh, I just know that if I played with them they would all break.”

More than a little disappointed with the reaction, the psychiatrist turned his attention to the optimist.  Instead of a room full of toys, he was taken to a room full of horse crap.  The boy squealed with delight, climbed to the top of the heap and immediately started digging.  When the psychiatrist asked him why, he exclaimed,

“Are you kidding me?!  With this much crap in here, there has to be a pony somewhere!”

Producers and agencies go out and get new toys all the time - the next solution or value-added service that they think will make their job easy, and them happy.  Then they get their new toys home and seem afraid to take them out of the box and play with them.

“Oh, I don’t really know how to play with it yet.  Something might go wrong, so I can’t take it out of the box.” The thought of reading the directions never seems to cross their mind and they turn their attention back to their old toy box.  It doesn’t make any sense!

And then I see other producers who walk into the room full of crap called healthcare reform and squeal like the little boy digging for his pony. They understand that when that much crap is dropped on the marketplace there are opportunities in there somewhere.  And you know what? I promise you that they will be the ones to find them, even if they have to create them.

Don’t tell me “I can’t”, “It won’t work in my market.”, “People here only buy relationships.”, “blah, blah, blah”.  Because that, my friends, truly is a bunch of crap!

"Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat. Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win. Opportunities multiply as they are seized." – Sun Tzu

Sun Tzu was a military strategist famous for his military treatise, The Art of War. While I hesitate to compare the attack we are facing as an industry to military action, and in no way want to demean the efforts of the brave men and women who fight for our freedom, there is no doubt that we can learn from his teachings.

We are an industry under attack. Of course, it’s not the first attack we’ve faced. We’ve faced the threat of “Hillary Care,” Elliott Spitzer, direct writers and the Internet – to name a few. As different as the earlier attacks may seem on the surface, the way we responded as an industry was almost identical to each. That response was actually a non-response; we sat back, did a little hand wringing, changed very little about how we work and hoped that it would pass without a fatal blow. Largely, that strategy worked.

However, it won’t work that way this time around. This attack is different: it’s real, it’s sustainable and will produce casualties. To say the least, it has put our industry into crisis mode. And when a crisis hits any industry, competition becomes fierce. Survival is no longer the result of a passive act. As is one of the fundamental laws of survival, you have two options: fight or flight.

Some are going to abandon the very industry that has provided such amazing opportunities and, I will argue, whose greatest opportunities still lie ahead. They are convinced that government exchanges, reduced commissions and employers’ decisions to stop offering benefits has made this an apocalyptic moment. That’s unfortunate for them, but I guess if all you see is yourself as a victim of events beyond your control, flight is the only viable option.

Actually, the fact that there will be a fair amount of flight is part of what helps produce so many opportunities for those who remain, for those who choose to stay and fight. For those of you willing to fight for your future, there is one additional question: How are you going to do battle? Are you going to wage a tactical war or a war of strategy?

Tactical

Unfortunately, this seems to be the battle cry of too many producers and agencies. They see their current business model threatened and just start swinging wildly. Below are some of the swings I see producers/agencies taking:

Buying books of business – This is akin to the manufacturer who says, “I know I lose money on every widget, but I’ll make up for it in volume.” If your current model is being threatened, just making it bigger isn’t the answer.

Moving into P&C – Those who take this tactic are making themselves more of a generalist and prone to further attack by the specialists. Specialists will always generate more value than a generalist. If you agree that your future has you getting paid for the value you create rather than the product you place, becoming more of a generalist takes you in the wrong direction.

Doing more for less – In an attempt to be more attractive, they start throwing more “free stuff” into their offering, further reducing their profit margin. If what you offer has any value, shouldn’t you get paid for it?

Even when you are swinging wildly you may connect with a few punches, maybe even win a battle. However, swinging wildly quickly becomes exhausting and soon makes you even more vulnerable. Until you create a solid foundation in your area of core focus, going in new directions is only going to create greater instability. Some of these tactics may be part of a long term solution, but only once the core is solid and they are determined to fit into a larger, overall strategy.

Strategic

When the “fight” instinct kicks in, it’s difficult to subdue the urge to start swinging wildly and to, instead, take time to size up the opponent (in this case the threat to the survival of your business model). Planning a long-term strategy, while feeling like it initially slows you down, is the only way to create a solid foundation, ensure your long-term survival and provide an ability to take advantage of the coming opportunities. Ultimately, it is the only way you can have any endurance along with your speed.

Having a plan means you have clarity in three key areas: current situation, vision and business needs.

Current situation – Describe your current business model. This may be difficult, but you have to be brutally honest. Actually, the difficult part will likely be seeing just how vulnerable to an attack you really are.

• What are you selling? (likely answer – insurance)
• How are you getting paid? (likely answer – carrier commissions)
• To whom are you selling? (likely answer – anyone who will buy)
• How are you acquiring new clients? (likely answer – quoting and hoping for lower numbers)
• What is your growth rate? (likely answer – much less than it was)
• How do you protect your profit margin? (likely answer – cross our fingers)

Vision – Now, answer those same questions again, but this time in terms of your future vision. I’m not talking about a mission statement-type vision, I’m talking about what your model needs to look like in the future. Take yourself out three years and picture that your model has grown to be exactly what you want and need. What does it look like, ideally?

• What are you selling? (possible answer – broad based solutions that impact our clients’ business bottom line)
• How are you getting paid? (possible answer – fees based on the value we are able to create)
• To whom are you selling? (possible answer – companies who fit our ideal profile and value what we have to offer)
• How are you acquiring new clients? (possible answer – by creating a plan that aligns what we have to offer with what our clients need)
• What is your growth rate? (possible answer – predictable, sustainable, and top among our peer group)
• How do you protect your profit margin? (possible answer – establish fees based on the effort/cost involved with each client)

Business needs – Once you have a true understanding of where you are and can clearly see where you are going, its time to determine how to connect those two points. Be sure you address the following:

• What new skills do I need to develop?
• What resources (outside partners, team members, solutions, etc.) do I need to procure?
• How will my sales process need to change?
• How will I need to alter my brand message?

Next, for each business need:

• Identify key initiatives and specific action items to which you must commit
• Set deadlines, as appropriate
• Communicate your plan to team members
• Empower your team to take ownership and contribute
• Monitor your progress and make adjustments, as necessary

Yes, we are an industry under attack. A passive response will be a concession of defeat. It’s time to choose: fight or flight. For those who choose to go to battle, you must choose a battle plan. Swinging wildly may be instinctive, but you will connect with precious few of those shots and can never ensure your ability to connect a second time. However, if you slow down for a moment, create the appropriate strategy and a disciplined plan of attack, you will look back at this “attack” as the time your business/career was liberated. You just have to ask yourself, “How badly do I want it?”

Photo by Kyle VanHorn.

@kevintrokey

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As the revenue stream of benefits producers continues to come under attack as a result of healthcare reform, producers find themselves scrambling to figure out how to replace the lost commissions.  Unfortunately, their short-term solution will, in many cases, be their long-term curse.

Some of the more common strategies I have heard include:

• Start selling voluntary products
• Buy books of business from other producers/agencies
• Start selling P&C
• Just sell more of what they’re already selling

Here’s the problem: none of these are solutions where the producer is taking control of the product or the model.  In every situation, they continue to rely on someone else’s product and they continue to allow someone else to determine how much they get paid (i.e. the carrier determines the value and pays accordingly through their commission schedule).

Another part of the problem comes from how the prospects/clients view producers who are using this approach.  With every one of these strategies, the producer will either be viewed as the same as every other benefits producer, or even worse, just an insurance generalist.

Regardless, the client will view what the producer sells as a commodity, which does nothing to improve profit margins.

Today’s benefits producers have to make a shift in how they get paid
In order to stay a relevant business, producers need to change their model to get paid for the value they create for their clients rather than for the placement of a product (which is what other benefits producers and insurance generalists do).

Producers must reposition themselves to be seen as a specialist & produce the results of a specialist
Clients hire specialists because they are looking for business results. They hire benefits specialists because they want to improve employer – employee relations, better serve their clients, and improve profitability.  As a specialist, producers need to be able to identify the opportunities to help clients achieve these goals and deliver the solutions to drive the results.

As far-fetched as this may sound for benefits producers, it isn’t as far away for most as you might think.  Many producers are already having this kind of impact on client businesses, but, unfortunately, it’s a byproduct of their efforts, and largely goes overlooked (by the producer and the client) rather than being the defined purpose of their efforts.

Becoming a specialist

1. The first step to becoming that specialist is to make sure that the reason you are hired is no longer about a spreadsheet, but about your ability to deliver a better business solution to your clients.
2. Additionally, continuing that client relationship has to be based on the results the producer delivered, not the renewal rates the producer delivered on behalf of the carrier.

Advantages of being a specialist

• Instead of talking about the multitude of ways you can make a small impact on the client business, you can now talk about the one way you can make a significant impact on their business
• Confidence that comes from having less competition
• You now control what you are selling
• Specialists always create more value than a generalist and, therefore, are paid more
• Easier to be positioned as an “expert”

Put yourself in the place of the buyer
If you received a letter from the IRS, would you want a main street lawyer working on your behalf or an attorney who specializes in tax law?  If you developed a life threatening condition, would you want a family practitioner or a specialist working to keep you healthy?  The answer is obvious.  When you want to work with someone who can deliver the best results, you ALWAYS want a specialist. 

When presented with the option, what makes you think your prospects/clients are any different?  They aren’t; they want a specialist who is going to deliver a better business solution and help them deliver better business results.  Make sure it is you they see you as a specialist and not your competition.

Photo by WeiSheng Zhang.

One of our BGN member agencies, Lacher & Associates, holds regular education sessions for their clients and has asked us to present this week.  They are inviting all of our BGN  readers to attend.  Join us for this FREE session - Register Now!

Kevin Trokey will be presenting and talking about HR as a strategic driver within an organization - what businesses need to be doing to recover and begin thriving once again after the fallout of the recession.

Thu, Dec 16, 2010 10:00 AM - 11:00 AM EST  

Webinar Description:

As businesses were facing a quick and significant economic downturn, scrambling for survival became the focus for many organizations.  The resulting actions, as necessary as they have been, now have companies poised to face unforeseen challenges that could ultimately prove to be their downfall.

We'll identify and discuss:
•    Those challenges we're facing
•    Why now is the time to change our organizational focus from survival to thriving
•    How HR can, and should, play a significant role

Register Now!

Check out the presentation slides:

Yes, the most threatening part of the current healthcare legislation is the provision that addresses a Minimum Loss Ratio.  Of course, this provision doesn’t have the biggest social impact, it doesn’t change specific benefits, and it won’t allow for new enrollees…but for those who make a living selling medical insurance, it is a direct blow.

Here’s where many of you will disagree with me –

I think this is one of the healthiest things to ever happen to benefits producers.

For way too long, those who have been sellers of medical insurance have been able to compete with someone else’s product, have gotten paid very well to do so, and have acted in an almost blind fashion to the party writing the paycheck (your client, not the insurance company).

The current compensation structure has allowed mediocrity to have way too high of a financial reward.  Really, think about it - if all you are doing is quoting insurance and fixing the occasional problem, you have been grossly overpaid.  Those days are now over.  In certain markets, you may still be able to make a living through whatever commissions that remain, but that standard of living will change dramatically.

Here’s why this change is healthy

• It’s healthy for our industry because, if we want to maintain our current levels of compensation, we are going to have to embrace fee compensation with our clients.
• To justify fees, we will have to be able to create, demonstrate, articulate, and deliver significantly more value than what we have done in the past with our fancy spreadsheets.
• To add more value, you will have to move beyond being a seller of medical insurance and start bringing solutions that result in your clients maximizing the return they receive for every dollar they invest in their employees.

The opportunity to deliver this kind of value has always been there, but there was no need to go there when spreadsheets paid us so well.  Game over.  What was yesterday a “nice to offer” approach will be tomorrow’s “have to offer” approach.

It’s a win-win-win

• You win because you are now competing with something that is within your control.
• Your clients win because they now have someone who is truly helping make a difference in their organization.
• You win again because when you generate this kind of value, you will be paid even more than you are today.

Do you agree or disagree with me?  What are your thoughts on the implications of a Minimum Loss Ratio provision?

Photo by D Sharon Pruitt.

Independent insurance and benefits agencies discuss the future of selling benefits in a changing environment.

August 31, 2010 – St. Louis, MO – Kevin Trokey, president of Benefits Growth Network, was invited to speak at the GBT conference in Chicago, August 18 – 19. Trokey presented on the factors which are driving a need to change both the producer and agency models.

“Not only will health care reform push us in that direction, but challenges being faced by clients will pull us in that direction,” notes Trokey. “Agencies who will thrive under the new system are writing a new definition of what is means to be an independent benefits agency. They are building business models and systems that move beyond benefits, and even HR, to include driving greater returns on the investment their clients make into their employees.”

Trokey took the group through an in-depth look at one potential benefits agency/producer value proposition, followed by group discussion which included the following topics:
* What are the talents and skills needed by the future producer?
* What will the future agency look like, and how will that transformation take place?
* What services and products will be sold?

GBT is an affiliated group of independent multi-line agencies located throughout the Midwest who come together on a semi-annual basis to discuss the most pressing issues agencies are facing. Topics for this meeting included: 
* value added services
* hiring producers
* social networking among the member agencies
* health care reform
* the changing role of the benefits producer/agency

About Benefits Growth Network
Benefits Growth Network, based out of St. Louis, MO, is an international membership-based consulting firm specializing in growth strategies for independently owned employee benefits agencies and brokerages. Through the exclusive Benefits Growth System™, members get individualized planning, coaching, training, use of proprietary systems and access to a network of thriving benefits agencies. For more information about Benefits Growth Network, visitwww.benefitsgrowthnetwork.com.