Creating a TCOR Urgency

To really create a Value Proposition using Consultative Brokerage and TCOR you need more information than the usual insurance quote transaction. In many cases, the buyer is not motivated or is confused about what the process is. So, rather than spend the time required to get you the information (ie claims, risk control, financial data) they find themselves lost in other projects.

One of the most difficult issues for budding Consultative Brokers™ face is to create a sense of urgency in a new prospect’s mind.  Over the years I have heard many new TCOR converts exclaim, “I have a buyer who says they are intrigued and want to learn more, but I just can’t get them to the next step.”

Here is one reason why this happens.  To really create a Value Proposition using Consultative Brokerage and TCOR you need more information than the usual insurance quote transaction.  In many cases, the buyer is not motivated or is confused about what the process is.  So, rather than spend the time required to get you the information (ie claims, risk control, financial data) they find themselves lost in other projects.

But, the bigger reason is the fact that as a broker you have not created a sense of urgency.

Now I don’t blame most of you for this lack of creation.  As traditional brokers it is something you have never learned.  Why?  This is due to the fact that historically we have been providing a product that every buyer needs with an expiration date that forces a decision.  So, we have never had to create that sense of urgency.

If you intend to become proficient as a Consultative Broker and a TCOR advocate, here are some of the things you must first master:

  1. Become an Evangelist - The first thing is the fact that you must really believe what you are attempting to accomplish for your prospects.  A true Consultative Broker would rather cut his hand off, than revert to the old methods.  This belief must ring true in all your interactions with a client.   If you waiver, your momentum will be lost.
  2. Have your buyer visualize the result – Really understanding Business Risk allows you to have a discussion with the prospect that will show them how their business operations will benefit from your Total Cost of Risk and Consultative Brokerage methodology.  This is the glue that binds the discussion.  Or like the late Frank Bettinger used to say: “Show a person what they want and they will move heaven and earth to get it!”
  3. Show them how others have benefited – Our clients have numerous examples of accounts that have reduced costs by tens of thousands or in some cases hundreds of thousands.  Once a buyer sees that their colleagues or competitors are improving profits, competitiveness, productivity and human capital costs; they desire the same results.  But remember, it is not enough to provide nebulous ramblings about value propositions or total cost reductions. (see bellow)
  4. You MUST Promise to Deliver a Quantified Outcome – As we have said for years, “if it ain’t got that swing, it don’t mean a thing”.  Prospects will not spend time with you, without that payoff.  So, you must promise to provide them with a Value Report™* that actually shows how you will change their business operations.  This of course presumes you have the ability to prepare one!
  5. Make it easy on them – In most cases a TCOR presentation is a complex sale with many constituents.  It is unlike the insurance transaction that simply includes a buyer, you and underwriters.  It is critical that you gather data from other areas such as risk control and claims management.  You should interface with these functions inside their organization.  This also gives you a chance to build relationships.
  6. Prepare for tough questions – Over the course of my career I have built the best long-term relationships with buyers who seemed tough in the beginning.  That is because many astute business people test you initially in order to find out about your backbone and maturity level.  How you respond to these questions will determine their interest in you.

The skill by which you create a sense of urgency will have a direct correlation to your ability to be appointed the broker of record.  As with any Conceptual Sale it is important that you make it come alive inside a prospects business model.  This requires skill not simply as a sales person, but also as a Consultant.  Hence the term . . .Consultative Broker™.

- 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: The Keys to Your Success

We have transitioned through both the soft and hard markets, seen a number of name brand carriers disappear, and experienced the expectations of our clients shift dramatically. All of this inside a business climate that went from boom to bust.I did not say that it is an unprofitable business or that it will not be financially rewarding in the future. That will come to those of you who understand how to create a value proposition that helps your clients improve their profits, competitiveness, human capital, and productivity (Business Risk).

It has been 15 years since we started C. R. Ekern and Company and coined the term Consultative Brokerage™.  I am personally very gratified for the friendship and reinforcement that many of you have provided us over the years.

Of course, since our inception the agency/brokerage business has changed dramatically.  We have transitioned through both the soft and hard markets, seen a number of name brand carriers disappear, and experienced the expectations of our clients shift dramatically.  All of this inside a business climate that went from boom to bust.

Here is the deal, and I know it will upset some of you: the property casualty insurance industry as we have known it, is a shrinking business.  Don’t believe me?  You can form your own opinions from the results of the past 40 years.  I know, I have been there for virtually all of it.


I did not say that it is an unprofitable business or that it will not be financially rewarding in the future.  That will come to those of you who understand how to create a value proposition that helps your clients improve their profits, competitiveness, human capital, and productivity (Business Risk).  Without that, you are simply in the insurance distribution business  . . . a constricting business model.

Oh don’t get me wrong.  There will continue to be blips of hard market pockets as your suppliers continue to put them and you out of business.  It will be possible for some of you to hang on from cycle to cycle.  But, remember the cycles will come further apart and they will return more quickly to a lower rate.  During the 37 years of my brokerage career, we have spent 81% of the time in a “soft market” environment. 

So, in my humble opinion, it is critical that you continue to grow your larger accounts.  These are what provide you with the highest level of profitability. If you are going to survive in this business, you will need to understand Business Risk and how to create a real Value Proposition.  That is what will give you traction for decades to come, not simply a few years.

So, it is time for you and your firm to get serious about creating a value proposition that is real.  Not just wrapped around the product.  Many of you are capable of it and must drop everything and make this your single most important task for the coming 24 months.

- 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

TCOR: Setting the Record Straight

It has been close to 15 years since C. R. Ekern & Company first introduced the concept of Total Cost of Risk (TCOR) to regional agents and brokers. We did not invent this concept, but adapted it to a meaningful tool for agents and brokers. We knew at the time, that eventually the concept of TCOR would become an acronym that was freely accepted into the Agency and Regional Brokerage sales vernacular. We are gratified to see that Total Cost of Risk (TCOR) is now an important part of many firms client and prospect dialogue. Other consultants have even claimed to invent it!

As many of you know, one of my favorite verses is from a Rudyard Kipling poem, it goes like this:

“They copied all that they could follow, but they couldn’t copy my mind, so I left ‘em a sweatin’ and a stealin’ a year and a half behind.”

It has been close to 15 years since C. R. Ekern & Company first introduced the concept of Total Cost of Risk (TCOR) to regional agents and brokers.  We did not invent this concept, but adapted it to a meaningful tool for agents and brokers.

We knew at the time, that eventually the concept of TCOR would become an acronym that was freely accepted into the Agency and Regional Brokerage sales vernacular.  We are gratified to see that Total Cost of Risk (TCOR) is now an important part of many firms client and prospect dialogue.  Other consultants have even claimed to invent it!

Having said that . . . The majority of the agents and broker’s who tout the concept of Total Cost of Risk (TCOR) do not know what it really means.  In fact, I have noticed several firms who actually have changed their names and slogans to feature Total Cost of Risk and TCOR.  Then, the rest of their material is about how they can deliver more effective insurance programs!

We are the consulting organization that introduced the concept of Total Cost of Risk to the Agency and Regional Brokerage system, it is important that I set the record straight.  By the way, this record setting is also based upon a number of years (25) as a top performing agent and broker.  Ready here goes:

  1. The insurance is the smallest part of a transaction with a buyer.  What we know is that the insurance is only 20% of a buyer’s true costs.  Therefore, when you use the concept of TCOR to sell insurance, you are going backwards.
  2. The power of TCOR is not to simply get an underwriter to present better terms in the future (see above).  While that may arise because a buyer’s TCOR reduced, it is not the main goal nor is it the main benefit.
  3. Total Cost of Risk is used by a successful Consultative Broker for one main purpose: to establish credibility.  It removes the buyer’s remorse and refocuses a client on the important matters such as cost.
  4. You can only impact TCOR through the delivery of resource capabilities.  I shudder when I see what some are calling a TCOR presentation.  It is an endless list of features. I recently saw an agent’s website that featured TCOR; it had close to 70 features listed under the banner of TCOR Reduction issues.
  5. If you can’t quantify TCOR, it is meaningless to a buyer.  Our firm is pleased to have developed the top Total Cost of Risk Calculator available inside the industry.  Not only does it identify benchmarks against sales, but also quantifies the impact inside a client’s business operation.

When we developed the Consultative Brokerage Methodology we told you that its main purpose was to position the client to deliver a Value Proposition.  At the time, we used Total Cost of Risk (TCOR) as the delivery mechanism (a concept we introduced 15 years ago).

Well, it is now time to move on.  Now that we and our clients have mastered the concept of quantifying and developing Total Cost of Risk.  We need to take you to the next level.  That is the concept and understanding of Business Risk. Total Cost of Risk is simply the vehicle: Business Risk is the attachment point.

So, stay tuned for our next Consultative Brokerage Briefing, we will show you how the most sophisticated agents and brokers are using Consultative Brokerage Techniques to create significant value.

Of course, once we shed light on Business Risk – “They will copy all that they can follow”.  But if it takes them another 15 years to copy and follow, we will be blazing another new trail!

- 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

Business Risk: The Final Frontier

One of the biggest misconceptions in our industry is around the concept of “Risk.” As insurance professionals, we believe the term risk to mean simply “hazard” risk to people, places or things. We assume that all of our clients and prospects find these hazard risks to be high priority problems. So, we deluge them with all our diatribes about our unique ability to handle and mitigate risk. We couldn't be more wrong!
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One of the biggest misconceptions in our industry is around the concept of “Risk.”   As insurance professionals, we believe the term risk to mean simply “hazard” risk to people, places or things.  We assume that all of our clients and prospects find these hazard risks to be high priority problems.  So, we deluge them with all our diatribes about our unique ability to handle and mitigate risk.  We couldn’t be more wrong!

Have you ever asked a CFO or business owner what their greatest risks are?  The answer will surprise you.  The astute ones will rebut your question with one of their own.  They will ask, “Are you talking about my insurance risks or the biggest risks to my business?”

When you confirm that you are more interested in their “Business Risk”, you will watch their eyes change.  They will then tell you about the competitive, financial, operational and productivity challenges they are facing.  They will also give you a perspective on the importance they place on the intellectual value of their human capital.  They will take the term risk and apply it inside their business model by discussing how it affects every major decision from choosing a new product, moving into new territory, adding new customers, and increasing capacity in a difficult business environment.

Why will they open up on these issues?  Because that is the reason they are in business; to generate profits by reducing the impact of Business Risk to their capital.

Every client you have, or prospect you call on, has five areas of Business Risk.  Your role as a Consultative Broker™ is to not just help them identify these areas, but to also show them how you can help reduce their impact.  These are the Five Points of Business Risk.  For you to be successful in the future, you must be knowledgeable about how these Five Points interact inside a client’s operation:

  1. Hazard Risks – The traditional insurance risks that we have all been trained to spot, mitigate and compete for by offering less expensive or more comprehensive insurance programs.
  2. Financial Risks – The various risks that can affect a client’s profitability.  Financial Risks include currency exchange, asset devaluation, accounts receivables, non-payment of contracts or banking lines of credit.  They directly impact a client’s profitability.
  3. Operational Risks – The risks a client experiences regarding their productivity.  Such risks include such things as their geographic environment, maintaining or improving their equipment, acquisitions, and supplier inefficiencies.
  4. Strategic Risks – There is a direct correlation between strategic risks and competiveness.  These risks include the loss of key customers, improper product positioning, regulatory hold-ups or customer pricing pressure.
  5. Human Capital Risks – Whether in good or bad economic times, a business’ most important asset is its people.  This is the intellectual capital that keeps everything else going.  The risk of loss includes not just the health of the workers, but their ability to contribute.  Such things as lay-offs or poor morale contribute to this risk.

Here are some final thoughts on the subject of Business Risk.  When you look at the Five Points of Business Risk above, there should be no doubt about their importance (If you don’t believe me, ask one of your clients or prospects.)  Why is it that most Insurance professionals focus primarily on Hazard Risk while they ignore their client’s most critical Business Risks?

There are several reasons:

  1. They are unable to carry on a business conversation with an astute client, so they focus only on what they know... the insurance program.
  2. They are unable to deliver a true Value Proposition through the application of TCOR (Total Cost of Risk) and Resource Capabilities.  Without a legitimate Value Proposition they will fail to provide funding alternatives to offset the client’s Business Risks.
  3. They are unwilling to learn the important business techniques that will allow them to generate and retain larger accounts in any business climate.
  4. They see themselves as insurance people, rather than as business consultants.  They are not capable of showing a client how to improve their financial position and business model.

Thank goodness that Consultative Brokers™ are able to ask a business executive the important question… “What are your biggest Business Risks?”  It usually leads them to a deeper discussion, a long-term relationship, and a quality client for many years!

- 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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