By Ernie Harris, EVP of Business Development, Maestro Health
Broadly speaking, there are two groups of benefits brokers in the market today: I like to call them “old-school” and “new-school”. These broker classes exist regardless of scale or segment, and include brokers of all ages, experience and time worked in the industry. The characteristics that define one as “old” or new-school” are related to the way they approach the market and conduct business.
An “old-school” broker relies heavily on relationships—connecting with their clients in person and sealing a “once-a-year” deal that starts with a spreadsheet and ends with a handshake. The “new-school” broker capitalizes on the increasingly consumer-centric benefits solution seeker—relying more heavily on data, information and technology. While the “old” relies on a close-knit family of clients with long tenure, the “new” sees the potential transient nature of todays shopper; looking for a broader set of clients that have lower cost of acquisition (and potentially lower per client commission) but delivering larger, more diversified aggregate revenue.
Now’s the time to look in in the mirror…which kind of broker are you?
There’s no right or wrong, good or bad—rather it’s a classification designation meant to awaken your sense of risk and reward. For decades brokers have been operating in the same way—spreadsheeting plans for employers and receiving commissions for their efforts. Large market brokers (calling themselves “consultants”) have offered a broad array of services to their clients, in addition to shopping health insurance rates. Now, historically there’s been a natural separation of these two markets, simply because it is very labor intensive to bring the large market consultative experience down to the small market – but not anymore. Private exchanges and other business models have developed technology to help reduce or remove much of the administrative burden. This tech revolution is enabling individual brokers to service much larger books of business while at the same time improving their consultative offering, not diminishing it.
So…let’s look again. What do you see…“old-school” or “new-school”?
Regardless of who is staring back at you—the following suggestions are intended to provoke introspection for the purpose of maintaining and growing success in the new age of employee health & benefits:
1. Know thyself: Be honest and determine how you do business. Are you “old-school” or “new-school”? Neither is right or wrong, good or bad – but recognizing where you stand is the first step to success.
2. Identify how you succeed: What delivers the most ROI in your current practice? Is it core medical, ancillary products, benefits consulting or something else? Then identify what activities are adjacent to that core. Are you engaged in those today? If not—why not?
3. Focus on things you can scale: What is the limiting factor in your business today? Is it you? Is it your (or your team’s) ability to serve a larger block of clients? Both relationships and technology can grow your business, but can also destroy it just as fast if not implemented strategically.
In closing, I leave you with this thought – if you’re still opposing change, when’s the last time you went to Blockbuster?
For more on this topic join us at EBN’s Private Healthcare Exchanges Conference, July 23-24 in Chicago. Russell Carpentieri, Managing Director and Partner at Opus Advisory Group, and I will be discussing this topic in detail in our session entitled “Where Old School Meets New School: The intersection of broker success in this post-ACA world of benefits”.