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!

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