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
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