Become The Broker That Roars

I wish I had a hundred dollars for every brokerage who has said this to me:  'We’re just as good as any broker. We have great resources, a smart team, and we’re really focused on our clients. It seems like we have difficulty getting and keeping the attention of the larger buyers. It has become hard to actually differentiate ourselves.’

Or, how about this one: ‘We have excellent resources in risk control and claims. They are the best. But, when we compete against others, many have similar resources... so we all look the same.’

Does that sound familiar to you? Come on now, be honest.

Here is your solution . . . Become the Broker That Roars!

First let’s agree on one thing. Your firm is just as capable as any other broker, and in many cases better. You have all the resources, brokerage skills, marketplace leverage and expertise required to do a better job for your clients. At the end of the day, if the prospect or client understands this, you are the obvious choice because of your ability to act nimbly on their behalf.

But, here’s your problem… you can’t prove that, so your voice is being lost in the noise of other firms who sound like you!

I hate to tell you this, but just having solid resources doesn’t make you the best . . . it’s what you do with them that matters. That along with the ability to actually prove your results!

So, here is how you become the Broker that Roars...  

  • You show your prospects and biggest clients what the analytic results of your firm have been (or will be.)

  • You take away the resource ‘feature’ language and replace it with your quantifiable impact.  

  • You redesign your large account strategy around the proven and known results of your organization.

  • You take it to the competition and make THEM prove what they have done.

  • You seize the initiative by forcing them into a position where they just can’t compete.

  • You make it ‘put up or shut up’ time for them.

Of course, some of you may be thinking, ‘This all sounds great, but we just can’t achieve all that.’ Well, you might be thinking it, but remember one thing... This is not 1975. You DO actually have the ability to do this if you understand Analytic Brokerage™ and work with TCORCalc® as your source for Analytics and Client results.

If you chose not to, that is your concern. But, know this, you will chose to continue to fight the same way that you have for the past 30 years. How is that working for you now with the latest C-Suite expectations around metrics and results?

So, it is time for you to stand up on your two hind legs and ROAR! You have the ability to do it. You have made the investment in resources, expertise and have a stellar reputation.  Your firm is one of the top brokerages in your region. Now you just need the skills of Analytic Brokerage™ powered by TCORCalc® to amplify your voice!

Go get ‘em Tigers.

Best Regards to Analytic Brokers™

Rob Ekern, CAB (Certified Analytic Broker™)
Chairman, TCORCalc®

Straight Talk to Brokers

It’s time for some straight talk, OK? Many of you have been reading the Consultative Broker™ Briefing for years (now the Analytic Broker™ Briefing.) So, I hope by now you know that we are one of the few voices in the brokerage industry that has consistently provided you with meaningful information on larger account production.

Ready for some straight talk? OK, here it comes.

Those of you who intend to be in the middle and upper/middle market business better hop to it! You need to change your entire perspective and do it quickly. The world of outcomes and analytics are here to stay, and most of you don’t know yours. If you did, you would be hitting the ball over the fence right now.

Virtually every middle market broker can’t answer these important questions from a client: ‘How have you impacted our financial outcome over the past several years?’ Or, ‘What will your impact be on our firm if we appoint you as our broker?’

Some of you are saying, ‘Of course we can answer that question!’ Then you provide a litany of information that all revolves around loss ratios, coverages, carriers and terms. With a bit of ‘Value Added’ services thrown in for good measure. You and every other insurance broker within a 100 mile radius. Oh, come on!

Now look... I’m being hard on you for a reason. If you don’t wake up and smell the coffee, your time will have come and gone. Take it from a grizzled veteran of the insurance brokerage world. Your top clients and prospects are not going to allow you to continue to operate like it’s 1975.

So, I want you to think about this: Let’s say you’re sitting in your office and the phone rings from your largest client. Here’s what she says:

‘We have a new CFO and he would like you to demonstrate the financial impact you have made on our firm over the past 3 years. Please don’t make your presentation based on the marketplace or risk management strategies because he‘s interested in results.’

Here is what the CFO actually wants to know... ‘How has your representation impacted our firm in the following ways?

  • What was the impact on our profit?

  • How have you helped us reduce and recapture our Financial Leakage?

  • How have you added to our shareholder wealth?

  • What are your firm’s results with other clients like us?

If you can’t answer those questions, you’re doomed. Why? Because that same CFO is able to turn to his analytic dashboard and find a big hole in it. The hole is the information that you have not provided him. As a result, you have a client who feels under-served.  That is trouble for you!

How did this happen? Because, you did not make the effort to learn and grow in the business you are now in... Providing clients with a financial impact that is superior to your competitor’s. Period. If you can’t demonstrate your true impact, then as Dr. Deming says, ‘you are just another person with an opinion.’

Now, I know it’s not really your fault. Until recently, the technology and analytics simply did not exist for you to be able to consistently quantify your client impact and track record, and then demonstrate that to your largest prospects and clients in a meaningful way. Fortunately for you, times have changed.

You might have had the opportunity to do all the things that the ‘New CFO’ was asking for, you just didn’t have theability to do them. You didn’t have a way to get there . . . unless you were an Analytic Broker with TCORCalc®.

So, wake up. Smell the coffee. Those of you who keep up with your clients’ and prospects’ demands for knowing ‘what you are worth’ will prosper. This is selling to the highest degree.

Isn’t that what you have been trying to do for years?

Click here to watch a quick introductory video entitled 'Welcome to Analytic Brokerage™' and you're on your way. 

Best Regards to Analytic Brokers™

Rob Ekern, CAB (Certified Analytic Broker™)
Chairman, TCORCalc®

Build a Better Mousetrap!

We have said this before, but it bears repeating: The basics of selling have not changed since the Persian Traders first traveled the Silk Road 3,000 years ago. It all comes down to what Frank Bettinger so eloquently stated in his 1947 classic, How I Raised Myself from Failure to Success in Selling: "Show a person what they want and they will move heaven and earth to get it!"

We have said this before, but it bears repeating:  The basics of selling have not changed since the Persian Traders first traveled the Silk Road 3,000 years ago.  It all comes down to what Frank Bettinger so eloquently stated in his 1947 classic, How I Raised Myself from Failure to Success in Selling:  "Show a person what they want and they will move heaven and earth to get it!"

Perhaps this is better presented though one of the oldest adages:  If you build a better mousetrap, the world will beat a path to your door!

Over 320 years ago when the lads where sitting at Lloyds Coffee House, a novel concept was created: exchanging risk for money. It was a better mousetrap for entrepreneurs who were opening the New World through the sea lanes and trade.  Business people were willing to take risks because they could shift it to a third party through this new financial tool called insurance.

That was the best mousetrap of its time. . .

For over 300 years, commercial insurance has been unchanged.  Exchanging risk for a monetary expense (Rate).  Using brokers who bring underwriters the deal (Commissions).  Oh, you could tell me that the types of risks have changed . . . but the principle of rate for risk has not.  The only significant change in our business since the Great War has been the effectiveness by which the product is distributed (Technology).

Now, here is a little shocker that many of you already know.  Clients and prospects have been desensitized to the "privilege" of having their risk underwritten.  They do not consider themselves fortunate to be given the opportunity of shifting their risk.  Excellent service and stable carriers are expected.  Technical expertise is expected.   And of course, competitive premiums are expected.

Now the mousetrap is breaking.  It has passed its useful life.  But, like every dying process, it does not all happen at once.  The warning signs of the broken mousetrap come slowly until the trap is completely useless.  Some choose to ignore it because they either don't know anything else or they are so close to retirement they don't care.

Here are the warning signs of a breaking mousetrap:

  1. It becomes more difficult to hire and retain successful new people into the business.  The ways of 30 years ago do not attract them.  Many flounder because they are not provided tools to become better business people.

  2. The suppliers begin to merge or disappear.  They are not able to differentiate themselves so they must revert to pricing or cutting overheads.  Thereby being forced to abandon the 300 year old mousetrap.

  3. Potential new clients are much more difficult to engage in buying conversations.  They see nothing new in the old mousetrap and are not motivated by any urgency.  There is no scarcity in their options to exchange their risk for money.

  4. Large buyers leave smaller firms.  These larger buyers perceive a drop in "value" for their money.  After all, if they are only getting a 300 year old mousetrap, why not get it from someone who has a larger inventory.

Here is the bottom line.  I know that this will make some of you crazy.  You will not be able to remain in the upper half of the middle market unless you build a new and better mousetrap.  There has been too much change in your clients' business skills over the past several years.  Those who survived the Great Recession are not the same businesses who entered it.

While they are loyal, they are not naïve.  They are not continuing to accept a business delivery model that is 320 years old.  They just can't afford to.  Many now have debt, investment bankers and much stiffer competition from diverse channels of competition.

Now, I hope that I have convinced you.  If so, make certain that you catch our next Consultative Broker briefing.  In the upcoming edition, we will show you how to build the best mousetrap.  This one is the "next level" that everyone talks about.  If you are happy with the current mousetrap, then stay the course.  If you intend to be in the commercial insurance business in 10 years ...stay tuned.

-Rob Ekern


Large Accounts: The Way Forward!

The purpose of Consultative Brokerage is primarily one thing: To help you attract and retain larger accounts. That is the only way that you can outrun the marketplace and your competition. Why? Because those are the accounts that allow you to create value no matter what the marketplace dictates. Also, your carriers will always need you in the upper end of the market with accounts that require “hands on” expertise.

As you begin planning your production for 2011 here are a few things to consider:

The Soft Market will continue to expand its revenue eroding run.  In fact, in the past 21 years, 19 of them have seen softening prices.

  • Some carriers will begin to provide you with mixed signals.  As their revenue base continues to shrink, some carriers will continue to experiment with “multiple” distribution channels.
  • Your clients and prospects will continue to be under financial and business pressures.  Those who have survived the “Great Recession” will remember the lessons.
  • Your competition will go into a feeding frenzy.  Remember you are not alone.  Your competition will continue to target whatever they can get their hands on, driving your revenues even lower.

The purpose of Consultative Brokerage is primarily one thing:   To help you attract and retain larger accounts.  That is the only way that you can outrun the marketplace and your competition. 

Why?

Because those are the accounts that allow you to create value no matter what the marketplace dictates.  Also, your carriers will always need you in the upper end of the market with accounts that require “hands on” expertise.

Oh, there is one other thing you should know:  THERE IS LESS COMPETITION AT THE TOP THAN AT THE BOTTOM!

I can hear you right now: “Easy for you to say, Ekern. But, how do we do it?”

Here are some universal truths about the production and retention of large accounts in the current marketplace and economic environment:

  • You must approach accounts from a perspective of Business Risk, rather than simply hazard.  These are the risks that impact productivity, profitability, competiveness and human capital.  These are the important issues to CFO’s and do not revolve around insurance pricing.
  • You will need to learn and practice the language of CFO’s.  This will give you the confidence to have business discussions rather than insurance meetings with buyers.
  • You must have a Value Proposition that can be translated to the financial statement of buyers.  By doing this, you can overcome the “transactional” nature of the insurance placement.
  • You need to produce exceptional Stewardship and Conceptual Presentations. These documents show your clients and prospects ways that your firm differentiates itself.
  • You need a prospecting methodology that stands the test of time.  It comes as no surprise that many larger accounts do not buy based upon simply the fact that you have called on them.  In some cases the buying cycle of these accounts may involve several people and involve longer than 1 renewal period.  That becomes problematic to some agents and brokers who focus only on the transactional renewal date.

We formed C. R. Ekern & Company in the depths of the last soft market (before the 2 year reprieve in 2001 & 2002). Our mission was a simple one: To provide you with the training knowledge and tools that will allow you and your organization to prosper.  To that end we have created learning tools, consulting services and client development tools that all point in one direction . . .Larger Accounts.

So, as you look toward 2011 and beyond, remember this.  The business you will be in going forward may consist of a perpetual soft market.  There comes a time when you must say . . . “How’s that workin’ for ya?” 

You can go forward, or backward.  Larger accounts are the way forward!

- Rob Ekern

For more information on how to quantify TCOR, manage projects, build a value proposition, and consistently deliver stewardship reports and new business presentations to your customers, check out the Major Account Development System (MADS), an on-line consultative broker's toolkit. Available now!

Ready to learn more about Consultative Brokerage Sales Training? Visit the Consultative Brokerage Academy.

To learn more about C.R. Ekern & Company, please visit our website

Large Accounts: Feeding the Bulldog

As fall approaches many of us turn our attention to planning for the next year. Frankly speaking, you are where you are. More than likely no new prospects will fall out of the sky and you essentially know what opportunities you will be working on for the rest of the year. So, let’s talk about the business environment that you will find yourself in as you approach your thought process of planning next year's production.

As fall approaches many of us turn our attention to planning for the next year.  Frankly speaking, you are where you are.  More than likely no new prospects will fall out of the sky and you essentially know what opportunities you will be working on for the rest of the year.

So, let’s talk about the business environment that you will find yourself in as you approach your thought process of planning next year's production:

  • You should expect the “soft” market to continue.  In many cases, the fat has been squeezed from the market.  There might be a few drippings left, but don’t expect huge rate decreases.  Also, don’t expect any increases either (unless you are working on deep water drillers).
  • Many of your clients and prospects are still hurting from the “Great Recession.”  They understand that business as usual does not provide them new solutions.  Truthfully, many of them are wrung out.
  • Your competitors will continue to be in a feeding frenzy.  Remember, there is less insurance premium available to all brokers.  This is the first time this has happened since WW II.
  • The insurance carriers will continue to support this feeding frenzy.  They will start 2011 with a speech about “holding the line” but by the end of the first quarter, all bets will be off.

As some of you know, I do have a little grey hair.  I started my production career in 1974.  This is the fourth cycle I have seen.  This one is unlike the others - it is taking place at the same time as a major recession.  So, as producers, you are getting hit with the double play: reducing rates and a reduction in rating basis.

So, with all this in mind, how should you approach your production planning for next year?

  • Recognize that Old Solutions don’t feed the bulldog.  The concept of using the insurance carriers pricing as your point of differentiation is now obsolete.  Why?  Because the blood has been squeezed from the turnip.
  • Understand that your prospects are still smarting from the “Great Recession.”  This means that you must approach them from a place of helping them reduce costs and improve their business model.
  • Like John Dillinger said: “Go where the money is.” The money is with accounts that have losses and are complex.  These are the accounts that are considered larger and have issues which do not revolve around insurance.  Also, these larger accounts have problems that are costing them six figures of financial leakage.
  • Focus on pinpointing financial leakage.  Many of these larger accounts are hemorrhaging money and don’t know it.  Why?  Because their broker has focused only on the insurance coverages and payment of claims.  Once you show this to them, they will move heaven and earth to obtain your solutions.
  • Offer a “Business Risk” Solution.  Plan on building a prospect list of firms who see you and your organization as offering business solutions.  You must be able to give the buyer what they want: productivity, profitability, competiveness and human capital retention.  Your insurance offerings are simply the hazard risk.
If you intend to stay in this business and be successful, you must understand Large Account Production techniques to help you feed your bulldog next year and beyond.
 
- Rob Ekern

For more information on how to quantify TCOR, manage projects, build a value proposition, and consistently deliver stewardship reports and new business presentations to your customers, check out the Major Account Development System (MADS), an on-line consultative broker's toolkit. Available now!

Ready to learn more about Consultative Brokerage Sales Training? Visit the Consultative Brokerage Academy.

To learn more abour C.R. Ekern & Company, please visit our website

Fee-Based Compensation: It Takes Money to Drink Good Whiskey

We have said this before, but it bears repeating as we all go into our year-end planning. Never confuse the difference between commission and fair compensation! There is no relationship between them. A commission is what an insurance company is willing to pay you to deliver their commodity and your compensation should be based upon the value you deliver to a client. The two are not the same.

We have said this before, but it bears repeating as we all go into our year-end planning.  Never confuse the difference between commission and fair compensation!  There is no relationship between them.  A commission is what an insurance company is willing to pay you to deliver their commodity and your compensation should be based upon the value you deliver to a client.  The two are not the same.

In many cases for you to provide value to your clients it will require a great deal of resources and effort outside the commission check.  It is imperative that your clients and prospects understand the value that you bring to the table.  Sometimes, that requires an additional investment on their part.

When speaking about this, I am reminded of one of the first lessons I learned as a very young person in this business.  I was negotiating a surplus lines placement with a grizzled veteran of the business.  When I complained about the price he was charging my client he looked at me above his nose glasses and growled, “It costs money to drink good whiskey, Ekern."

Simple enough, eh?  Now, how do we get fairly compensated without falling victim to the cannibalistic commission structure?  (i.e. the better the price negotiation for our clients, the less we make!)

The answer is to switch your top clients to a fee based, results and resource driven compensation system.  One in which you get fairly compensated for the resources you deploy and the costs your clients reduce.  This is the only win/win formula I know of.

So, if you agree, as most of you should, here are some additional thoughts on Fee Based Compensation.

  1. Your fee must be results driven.  It is not enough to simply tell a client that you intend to switch them to a fee.  You must answer the question of “what’s in it for them?”  The “wiift” is the fact that you will demonstrate a reduction in costs through your resource deployment.
  2. You must be prepared to manage the account.  This means that you and your organization will take responsibility for owning an outcome.  This goes well beyond simply placing the insurance policy and hoping that things work out.  You will need to provide the client with strategic planning and stewardship reports.
  3. Your fee should be higher than the commission.  Remember, the commission is based upon simply the insurance placement and does not reflect any of the client’s results or your efforts.  A successful Consultative Broker knows how to demonstrate the ROI and value proposition of their firm.  This is particularly true in a soft market when each year the premium or rates drop.
  4. Never use a fee to compete on price.  Your fee should not be used as a way to reduce a clients cost through removal of a commission and then a lower fee substituted in its place.   If you do this enough times, you will find yourself out of the business.

Of course there are many additional nuances to skillfully developing a fee based practice.  But for today, let’s all agree upon one thing.   The good whiskey costs money!  The commission compensation system does not account for the difference between aging in oak barrels versus aluminum vats!

- Rob Ekern

For more information on how to quantify TCOR, manage projects, build a value proposition, and consistently deliver stewardship reports and new business presentations to your customers, check out the Major Account Development System (MADS), an on-line consultative broker's toolkit. Available now!

Ready to learn more about Consultative Brokerage Sales Training? Visit the Consultative Brokerage Academy.

To learn more about C.R. Ekern & Company, please visit our website

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