Consultative Broker Briefing - The Path of Least Resistance

The Consultative Broker™ Briefing
Volume VII, Number 4
A Free Publication of C.R. Ekern & Company
888.670.1177
www.crekern.com
Copyright, C. R. Ekern & Company, 2005

The Path of Least Resistance

As the sales environment within our industry continues to evolve, producers and brokerage firms are faced with a decision. Which path do we follow? The one that looks intimidating, daunting, and confusing? Or the road that appears easy and well known? The former leads to a place that is unfamiliar, while the latter takes us back to a familiar place… price-based selling and the commodity transaction.

As the C.R. Ekern & Company fourth annual Year-end Consultative Broker Briefing Survey pointed out, many of you are seeing carriers coming back into the marketplace. Whereas in past years there were only one or two carriers competing for your business, there are now three, four, or more carriers that are interested in your business. What does this mean? If you let it happen – it could mean the potential return to price-based selling and the commodity based sales approach.

One of the most important concerns for most of you, according to our survey, is the ability to keep your book intact as the marketplace pricing erodes. As past market trends indicate, if you follow the crowded and familiar path of the commodity selling approach, within three years your revenue stream will be much less than today, your clients will be price buyers, and your new business strategy will revolve solely around the carriers.

You may be asking, what is the other alternative? Don’t take the Path of Least Resistance! Take the less traveled road that requires a little more effort today, therefore allowing you and your clients to prosper in the coming years.

Here is what successful Consultative Brokers are doing right now:

Successful Consultative Brokers make their accounts bulletproof. They understand that some of their clients felt abused by the hard marketplace. Now that sanity has returned, these brokers make certain that their clients understand their Value Proposition using the Total Cost of Risk (TCOR) methodology.
They visualize the entire marketplace. They don’t see the marketplace as just one or two carriers. They look at the entire marketplace for capacity and use it as a tool, rather than a commodity.
They don’t allow knee-jerk reactions to run their business. They understand that marketplace conditions can change monthly and that adapting their production style to the changes would force them to change strategies multiple times. They stick with the methodologies that work.
They communicate the industry changes to their clients. They know that it is just as important to communicate the marketplace changes in today’s soft market, as it was in the hard market. By providing their clients with quality intelligence, these brokers are able to keep the confidence level high, build rapport, and become trusted advisors.
They constantly prospect for new business. Of course they know that some of their book will erode simply by attrition. With the softening marketplace removing the artificial increase, they must replace the attrition with new business.

The Path of Least Resistance is a crowded, slippery slope. Once a broker heads in that direction, it becomes difficult to return to the less traveled road of Value Proposition selling. Consultative Brokers know and understand this concept. They continue to practice the Ekern TCOR Methodology and to educate their clients and prospects on this philosophy. They intend to stay on higher ground while others disappear down the Path of Least Resistance while wondering . . . How did I get in this mess?

Best regards to all Consultative Brokers,

Rob Ekern
President
C.R. Ekern & Company

Consultative Broker Briefing Main Menu

Consultative Brokerage® Techniques are utilized by agents and brokers across North America in the development and retention of upper middle market revenues. The Consultative Broker Briefing is delivered electronically free of charge to selected agents, brokers, and other insurance professionals across North America. To subscribe to The Consultative Broker Briefing, please click here.