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Brokers Need To Sell On Value, Not Price
By Rob Ekern
National Underwriter, October 8, 2001

During my career as a broker with Willis Corroon, I was fortunate to spend some time with Robert F. Corroon. The late Mr. Corroon was considered one of the true entrepreneurs and leaders of the brokerage industry, building what evolved into one of the world’s largest risk financing and brokerage firms today.

We spoke in some depth on several occasions on the subject of brokerage growth and development.

"This is a self-developed business based upon individual initiative of producers," I remember Mr. Corroon saying, regarding the role of a producer and the responsibility of the organization. "The key is to create quality individual opportunities, while at the same time involving the support of the organization."

The two are not mutually exclusive, Mr. Corroon pointed out. Firms that create a culture for production based upon individual initiative while tied to the sense of a greater organization will continue to prosper.

For regional and independent brokerages to achieve this, they must first know and practice "consultative brokerage."

"Consultative brokerage" is a production strategy based upon creating client value through the deployment of resources. These resources, derived from disciplines throughout our industry, are used to provide clients and prospects with capabilities that are outside the insurance policies themselves. By learning to value these capabilities, the producers and their firms are able to differentiate themselves outside of the commodity.

To attract clients by using "consultative brokerage," firms must employ the following techniques:

• Develop issue-based sales presentations. Today’s sophisticated buyer is interested in working with firms that provide solutions to issues. They judge an organization using value as criteria.

• Deploy resources to create differentiation. Other brokerage firms can copy your insurance policy, but they can’t copy the unique methods you have employed to your resources that bring value.

• Understand "total cost-of-risk" (TCOR). The concept of TCOR is one of the most powerful ideas that our industry has developed. The firms that learn to show their clients and prospects how TCOR can affect them also demonstrate their quantifiable value. Historically, TCOR has been demonstrated by strictly the price of insurance. Today, the successful firm can show how the application of these resources affects the client’s balance sheet.

• Use the "brokerage selection process." Regional brokerage competition has been based on the market selection process, where brokers choose several markets to deal in. This has proven to be an ineffective method to develop new business. The brokerage selection process develops a prospect through the specific ways that your firm is uniquely qualified to resolve issues and provide solutions. The buyer selects the firm based on its demonstrated outstanding capabilities.

Demonstrating these capabilities, firms must work to put the "fix" in the prospecting process. Throughout this process, the producer must constantly show the buyer how the resources of his or her organization are uniquely qualified to resolve problems and issues. When the competition begins, you will have already won.

Firms should limit their competition to the brokerage selection process. This will involve the producer educating the buyer to the advantages of the brokerage selection process. After all, there are only a handful of insurance carriers. If the buyer does not agree to the brokerage selection process, walk away. Spend your time looking for other prospects.

During the process, involve the client’s team. It is important to have all of the client’s decision-makers at the presentation to get to know you, the producer and firm. Make it an event. The producer should use the firm’s conference room, or cater a lunch to the buyers’ conference room. Remember that the presentation will be conceptual, the prospect will not have prices to judge by.

Developing a theme before the meeting helps. Many broker's presentations are nothing more than a review of coverage. To be effective, the presentation must center on several ways that the firm can reduce the client’s costs by specific application of resources.

Internally, develop a sales culture based upon value. Most regional brokerage firms are very strong sales organizations. Unfortunately these firms have as many cultures as they do producers. Each producer has a specific sales style that is unique to him or her. This can make it impossible for a firm to develop a consistent message to clients.

Regional firms dealing in a multi-cultural environment must establish one culture plan for top accounts. This means setting a threshold for the size of the firms’ franchise accounts--the small number of accounts that provide the most significant revenue. It is these accounts that will require the most cohesive client service.

A broker who neglects these accounts will discover a competitor who will not. The result will be a producer hearing those awful words from a client, "We think we may have outgrown you."

Forming a major account division is also a good step for regional brokers. The unit would not be staffed on a full-time basis. Instead, it comes together on a regular schedule for the purpose of reviewing top accounts and prospects. By pulling together the top minds of your firm on a regular basis, a culture of teamwork and organization will develop.

The wisdom and vision of Mr. Corroon and other industry leaders I have spent time with in my brokerage career has stood the test of time. The fact remains today, as it was then, that individual production efforts create opportunities, while organizations deliver client value.

Rob Ekern is President of C. R. Ekern & Company in Phoenix. His firm provides consulting, training, and Webcasting to regional brokerage firms. 

Copyright 2005 C.R. Ekern & Company