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®

The Three Keys to Client Value

What is your actual Value Proposition? How do you demonstrate to clients, prospects, CFO's, risk managers, and other c-suite buyers the quantifiable impact of working with your firm? How are you currently showing your clients the impact you are having on their business organizations? How much shareholder and ownership equity did your organization create for clients this year?
The brokers who are establishing quantifiable Value Propositions now have a huge advantage over firms who are still in the 'Dark Ages.'  They are holding on to renewal accounts without having to cheapen their revenues and fees.  They are growing their books by gaining accounts based upon outcomes, not insurance prices.  Their hit ratios are higher and their production costs are lower.

The ability to create a demonstrable, quantifiable and credible Value Proposition is a recent development inside the brokerage industry.  It has been made possible by the advent of cloud computing and data sharing capabilities.
 
What is your actual Value Proposition?  How do you demonstrate to clients, prospects, CFO's, risk managers, and other c-suite buyers the quantifiable impact of working with your firm?  How are you currently showing your clients the impact you are having on their business organizations?  How much shareholder and ownership equity did your organization create for clients this year?

If you don't have the answers to these questions, you are already behind the curve.  Unfortunately, your organization is simply an insurance agency and will be out of the large account business shortly.  Sorry, but the Genie is now out of the bottle.

Everyone speaks about a Value Proposition, but most are not able to actually produce one.  A Value Proposition is not a list of features, resources, services or specialized insurance coverages.  An actual Value Proposition is the financial impact and outcome your clients obtain through working with your firm.

So, let's get specific about what a Consultative Brokerage Value Proposition looks like:

·  It is tied to client profits and EBITDA - Once you have established your actual quantifiable value proposition it becomes a factor that is embedded inside the buyers financial statement.  Thereby, proving the continued importance of the brokerage relationship.

·  It impacts client productivity - No matter what your client does, whether it be for profit or not for profit, they have productivity measurements.  Your Value Proposition must align with these important Key Performance Indicators, thereby showing how you have helped them reach or exceed their targets.

·  It creates shareholder value - This is the most important tangible result of a demonstrable Value Proposition.  Whether they be a public or privately owned company, shareholder value is created by a multiple of your EBITDA contribution to profits.

Virtually every other industry has focused on how its products and offerings create a tangible and quantifiable Value Proposition for clients.  Yet, we as property/casualty brokerage firms have decided to keep ourselves tethered to the ropes of commodity price and terms.  It is time to crawl out of the darkness and move into the light of the new age.

All the best to Consultative Brokers,

C.R. 'Rob' Ekern
President/CEO


C.R. Ekern & Company

Fees: Get Paid What You Are Worth

For years we have been saying this: There should be no correlation between your income and the commission paid by insurance carriers. The two just ain't the same thing. Now I know this sounds like sedition, but stay with me here.

As your clients have become more sophisticated, many of your firms have added internal resource capabilities.  Whether they be claims, risk control, client portals or financial analysis.  The commission structures that are developed and paid by insurance carriers just don't support the expense of these resource capabilities; and your producer compensation too.

So, the answer comes in 4 possibilities:
  1.  As producers you determine to give up part of your commission in order to support the resources required to stay in the game on larger accounts.  (A bad option)
  2.  Your firm requires you to pay for resources out of your pocket, thereby forcing you to select which clients get resources and who does not. (A worse option)
  3.  You decide as a firm to get out of the larger account arena and simply work on commodity transactions. (The worst option)
  4.  You learn and commit to developing ROI-Based Fees.  (YES!!!!)
There has long been a fallacy built into our business that no longer has legs.  This problem is around the calculation of a Fee and how we present it to clients. Now this edition of the Consultative Broker briefing will not be around the methods of fee calculations.  There are as many calculations as there are stars in the sky.

For today, we all need to accept one universal truth about fees.  At the end of the day, after calculating fees, most brokers then compare it to commissions.  If the fee is too low; they adjust up.  If too high; they adjust down.  So, eventually the fee becomes a function of commission benchmarks.

The key here is that they ultimately peg their income to what the market will bear.  Then, pray to god that another broker doesn't undercut them in a competitive situation!
But what about their quantifiable impact to the client?  Doesn't that count for something?  What about the ROI the client has received from their ability to deploy resources and achieve a consultants goal of improving the client's business model?  What about the impact your client has received in reduced costs, improved efficiencies, competitiveness and productivity?  What about that?  Shouldn't that be factored in the Fee as an ROI?  What about that?  Huh? Huh? Huh?

Now before you scoff at me.  Let me tell you a true story that recently occurred with one of our broker clients.  Over the past several years the broker and firm did a tremendous job of reducing this client's losses and premiums.  So good in fact, that the premium reduced from $550,000 to $300,000.  The fee on the renewal was $50,000 and the client was asking for a reduction.

Here was the problem our intrepid Consultative Broker faced.  He could either lower his fee and therefore not get fully compensated for the firm's efforts.  Or, he could present the client with a complete ValueReport based upon the calculations of our Major Account Development System.  He chose to present the ValueReport prepared by MADs.

So, what happened?  The client fully accepted the $50,000 fee based upon the evidence and proof of the ROI the broker had provided the client.  It approached seven figures over the course of the past 3 years.  Not only that, but the client acknowledged it would be fruitless to entertain any other broker proposals.

So, it is time for you and your firm to get with it.  ROI-based selling is the only way that you can stay in the game and compete for profits.  Remember commissions paid by carriers and under-priced fees should have no correlation to your income.  Hey, we have a vested interest in this.  Our goal is to help firms like yours to prosper and grow, no matter what.

If you keep reading, we will keep writing.

- Rob Ekern

TCOR: Building a Value Proposition

Total Cost of Risk (TCOR) is becoming one of the most important acronyms of the 21st century for agents and brokers. We at C. R. Ekern & Company are pleased to be the developer of the Total Cost of Risk strategy for middle market agents and brokers.

Total Cost of Risk (TCOR) is becoming one of the most important acronyms of the 21st century for agents and brokers. We at C. R. Ekern & Company are pleased to be the developer of the Total Cost of Risk strategy for middle market agents and brokers.

Like any great concept, Total Cost of Risk (TCOR) is now being trampled on by a number of ill informed agents, brokers, and sales training consultants. Why? This is due to the fact that the language of TCOR can be easily replicated. Unfortunately, the results can’t. Without the ability to quantify and replicate a value proposition, TCOR is simply sales buzz, not the consulting tool it was intended to be.

To that end, we have just released an important whitepaper that discusses how you and your firm can better understand how to use TCOR to demonstrate your value to clients.

-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

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

Stewardship Reports: Locking the Back Door

I was standing in front of a client group recently, when a bolt hit me out of the blue (it does happen occasionally!) We were discussing the importance of doing Stewardship Reports. Now, as many of you know, we first started talking about Stewardship over a decade ago. Today, Stewardship Reports are a well accepted key to Consultative Brokerage.

I was standing in front of a client group recently, when a bolt hit me out of the blue (it does happen occasionally!)  We were discussing the importance of doing Stewardship Reports.  Now, as many of you know, we first started talking about Stewardship over a decade ago.  Today, Stewardship Reports are a well accepted key to Consultative Brokerage.

But here is the dirty little secret that I know - while many other agents and brokers talk about Stewardship Reports, very few actually deliver them!  And unfortunately, most of the “reports” being offered do not qualify as true Stewardship Reports.  They are simply a rehash of the features offered to clients.

This is very frustrating to me.  Why?  Because I know that an effective Stewardship Report is the key to “Locking the Back Door.”  The amount of revenue that is lost for lack of a good Stewardship Report is staggering!  Without them, brokers are subject to both competitive and pricing pressures that can cut the guts out of their revenue stream.  All because they didn’t do a good job of making certain that the client understood their Value Proposition well prior to the renewal.

So, what was the bolt that hit me?  The reality that a good Stewardship Report is actually more important to your revenue stream than the renewal itself.  Why?  Because an effective Stewardship Report sets up the renewal correctly and makes it simply a project.  When a client already understands the benefit of your Value Proposition, it removes the tension around the renewal.

But don’t take my word for it.  Here is an actual example that happened last week.   A Consultative Broker delivered a renewal to his client’s CFO with a $125,000 premium increase (approx. $600,000 in renewal premium.) This meeting took place sixty days before the renewal date.  Because the Consultative Broker presented a solid Stewardship Report, the CFO understood their Value Proposition of close to $1,000,000.  The client accepted the increase because of this demonstrated value.  It happens all the time.

So, let me ask you a question:  Would you consider not delivering renewal terms to your clients?  Of course you wouldn’t.  Why?  Because you perceive that is when you earn your money.  I believe that you really earn your money with the delivery of a Stewardship Report.  The renewal is simply the time that you collect it.   Wow, what a concept!

So, why don’t more brokers do meaningful Stewardship Reports?  Simply because in most cases they either don’t know how to, or they can’t offer any ongoing value other than placing and servicing the insurance program.  So, either they ignore the Stewardship Period or present something that is simply a policy and claim review.  This doesn’t feed the bulldog.

If you want to provide a meaningful Stewardship Report to your key accounts, here is what you must do:

  1. Establish a Benchmark Stewardship Period – A true Stewardship Report should be presented six months in advance of the renewal.  It should include your projects and Value Proposition for the past eighteen months.  Every good Consultant uses a benchmark against which they can compare their outcomes and progress.
  1. Know your Value Proposition – Using the concept of Total Cost of Risk (TCOR), you must be able to demonstrate how you have impacted the client’s business model.  The ability to quantify your impact makes the Stewardship Report relevant as a demonstration of your business partnership.
  1. Understand Conceptual Impacts – As part of the Stewardship Report, you must show the client how you intend to impact their outcome over the next eighteen months.  This requires that you know how to utilize the TCOR methodology into the future with conceptual results.  This places you on the same side of the table as your client.
  1. Treat the Renewal as a Project – If you have done your Stewardship Report correctly, the renewal is simply a project that reflects the successful follow-up of your discussion.  In short, the entire sting is taken out of the transaction.   This is the natural conclusion of your plan and strategy in concert with your client and carriers.

Stewardship Reports are the most talked about and least utilized tools of the average agent or broker.  The term has become a buzzword touted by consultants who have never brokered a deal.  Most agents are unable to produce meaningful Stewardship Reports.  They therefore ignore the one project that would allow them to effectively “lock the back door” and focus their time on growing their business, rather than protecting it at renewal time.

- 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

Pushing the Right CFO Buttons

Here are a few Consultative Brokerage Skills that you (and your organization) must master in order to be successful. You must have a business dialogue that is sustainable and relevant over a long period of time. Remember that most large accounts take longer than one renewal cycle to land. In many cases, your appointment as the Broker of Record takes place “off” renewal and usually happens when the client really gets your value.

The skills required to call on a CFO seem mysterious to many insurance agents who have not developed Consultative Brokerage™ Skills.  Time after time, the unskilled broker walks away from the meeting with a sense of disappointment.  Why?  Because the CFO does not respond like most insurance buyers.  They are not particularly interested in the markets, the insurance commodity, the coverages, or the broker’s perspective on Hazard Risk.

Here are a few Consultative Brokerage Skills that you (and your organization) must master in order to be successful.  You must have a business dialogue that is sustainable and relevant over a long period of time.  Remember that most large accounts take longer than one renewal cycle to land.  In many cases, your appointment as the Broker of Record takes place “off” renewal and usually happens when the client really gets your value.

  1. Learn a New Business Style – The key is to learn and practice a new language.  Your presentations and client/prospect visits must appeal to a more sophisticated audience.  It is important that your approach does not portray you as just another agent/broker “looking for their business.”
  1. Understand Business Risk – Most insurance agents and brokers focus on “risk” as they know it.  Unfortunately, this falls under the category of Hazard Risk.  The real issue is Business Risk, which encompasses a wide variety of important issues such as profitability, productivity, competiveness and human capital.  Oh by the way, Hazard Risk is also included.
  1. Do the Research – It will be critical that you engage a CFO in a conversation about their business model and goals.  This may require you to lead the CFO into this dialogue by showing your depth of knowledge concerning their industry… NOT AS AN INSURANCE AGENT FOCUSING ON THEIR COMMODITY.
  1. Know your Value Proposition – As you uncover and discuss a client’s business risk, your Value Proposition will be utilized to offset the financial impact of their Business Risk.  Therefore, you must be clear on the flow of Value during the transaction as you deftly lift the curtain for the client, one step at a time.
  1. Propose a Project – Most CFO’s are analytical by nature.  Therefore, they do not make emotional decisions.  They select a broker based upon an outcome.  The only way to “prove” yourself is to show them an outcome, or to be able to conceptually demonstrate one.
  1. Don’t be Afraid to Require Skin in the Game – The toughest CFO’s you ever deal with, will turn into some of your best clients.  Why?  Because they will test you in the beginning just to see if you can take it.  Their theory is that if you can’t protect yourself, you will never be able to protect them.  So, you will need to push back from time to time, just to meet halfway.   Any less and you will be considered a supplier of insurance coverage and dismissed.

Here is the bottom line.  If you intend to grow and prosper in these difficult (or any) times, then you must be skilled in how to create relevance with a CFO.  It is the difference between being perceived as a Consultative Broker or a simple vendor.  There a hundreds of insurance vendors and very few Consultative Brokers.  Which would you prefer to be?

- 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

Broker Control: An Acquired Skill

As every Consultative Broker™ knows, the key goal of working with any prospect or client is to obtain and maintain “Broker Control.” What does Broker Control mean? In short, it is the ability to direct the prospect or client to the proper conclusions. These conclusions can range from simply agreeing to take the time to listen to and consider what you are saying, all the way to appointing you as the Broker.

As every Consultative Broker™ knows, the key goal of working with any prospect or client is to obtain and maintain “Broker Control.”  What does Broker Control mean?  In short, it is the ability to direct the prospect or client to the proper conclusions.  These conclusions can range from simply agreeing to take the time to listen to and consider what you are saying, all the way to appointing you as the Broker.

Every sale or client interaction offers you an opportunity to gain or lose Broker Control.  The key is to understand all the nuances of your actions and how they are valued by your client.  Remember, in these difficult economic times, a client or prospect is judging you more critically than ever before.

It breaks my heart to see a Broker lose a tremendous client simply because they didn’t understand the keys to Broker Control.  Frankly, it didn’t need to happen.  In fact, in most cases, the losing Broker did it to themselves.

Here are some of the most common ways a “holding” Broker loses Broker Control.  At the end of the day, even if they don’t lose the client, they have probably lost their position as a Consultant.  Now they have been delegated to the role of an insurance vendor and may be treated like a shoe salesman.  Eventually the client will fire them.

  1. They hold back information.  In this situation, the Broker fails to keep the client informed of changes and important information throughout the year.  These Brokers see the renewal period as the only time a client is interested in being informed.  Of course, by the time the renewal comes around, they are on the outside looking in.
  2. They don’t keep new projects in front of the client.  They assume that the client is not interested in spending time on new projects.  Therefore, they lose their value to the client.  I have seen this one time and time again.  Eventually the relationship gets stale and dries up.
  3. They are afraid to say no.  Of course we have been taught that the customer is always right.  But, that is wrong.  We all know of cases where our clients have endeavored to go down the wrong path.  Sometimes, you need to tell a client that even though you value their business, your business reputation will not allow you to support their decision.  Truthfully, some clients need to hear this in order to respect the “professionalism” of such an approach.  Others will test you, just to see what you are made of (e.g. the new CFO.)
  4. They don’t keep current on the client’s business operations. In these cases the client has evolving issues around productivity, profitability, competitive pressure, human capital, geographic expansion, acquisitions, or governmental regulations (to name a few.)  When the Broker does not stay current and ends up losing Broker Control, they may complain, “The client didn’t tell me about that!”  - as if it is the role of the client to do their job.
  5. They don’t establish a Value Proposition.  Eventually these Brokers will hear the most infamous words known to Insurance Agents.  When asked why the client is making a different choice, they hear, “We think we have outgrown you.”  Notice I said Insurance Agent?  I used that term because that is all you are if you can’t demonstrate a Value Proposition and embed it into your client or prospect’s business operation.
  6. They abdicate their responsibilities to others.  Now, we all know the importance of delegation.  Abdication and delegation are two different things.  Delegation is when you send a resource out to the client in order to assist you in making a client presentation.  Abdication is when you expect the resource to make the presentation without your participation.  In these cases you have lost your visibility as a Broker and will be seen as “frictional” inside the transaction.  In these cases, the commission income is coded to the wrong individual!

By the way, for those of you who are “glass half full” people, read the above examples and change the comments from negative to positive.  You will then have some answers on how to obtain Broker Control.  Either way, you get the drift.

The ability to obtain and maintain Broker Control is a skill that must be acquired.  In my years as a successful mega-Broker and now as a Consultant, I have observed one thing - The Producers who learn this skill and practice it regularly develop the largest books of business.  They don’t waste time second-guessing their own clients and can therefore spend their valuable time finding new ones.

- 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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