The Consultative Broker™ Briefing
Volume VI, Number 14
A Free Publication of C.R. Ekern & Company
888.670.1177
www.crekern.com
Copyright, C. R. Ekern & Company, 2007

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Don't Change Horses!

For those of you who are historians, you will surely recall one of the great political slogans.  It was FDR’s re-election plea during the Second World War (no, I wasn’t alive then!)  He said, “Don’t change horses in midstream.”  Today, we would paraphrase it to say, “Dance with the one that brung ya!”

“What does this have to do with Consultative Brokerage?” - you might ask.  Well, it is the basis of riding out the changes in the marketplace successfully.  It is the key to keeping clients satisfied and maintaining your reputation with the carriers.  Remember this - the marketplace has a long memory.  If you intend to stay in this business more than the next twelve months, you should heed another piece of sage advice - “Don’t throw the baby out with the bathwater.”

Here is the deal - The marketplace is now changing monthly.  As each month goes by next year, it will probably get softer and more “competitive” (insert the word “cheaper” here.)  As a professional you cannot get caught up in this.  It will be impossible for you to always come up with the “cheapest” deal (insert the words “most competitive” here.)  There will always be somebody “more competitive,” depending on which day it is.

Brokers who adopt the approach of chasing the marketplace in the downward spiral will pay dire consequences.  They will watch their income stream erode quickly, they will destroy relationships with the carriers that supported them, and they will have no credibility with clients.  They will constantly be looking for the next “Shifting Sands Mutual” so that they can deliver the cheapest price.

A seasoned Consultative Broker knows and demonstrates the following:

1. They can’t always be the cheapest.  In fact they tell clients and prospects this on the front end.  They make certain the client knows that their Value Proposition depends on more than simply the price of insurance.

2. They aren’t paranoid.  They have exercised Broker Control throughout their service or prospecting cycle.  They are highly aware of their competitors, but they do not over-react to them.

3. They concentrate on what they can control.  They understand that they have no control over others in the marketplace.  They can’t control an overly aggressive underwriter who is running a month-end “fire sale.”  Therefore, they spend their valuable time managing client expectations.

4. They effectively manage client expectations.  They know that their current clients and prospects don’t live in a vacuum.  These people are hearing from other brokers who are pitching price, programs and carriers.  They make certain that their clients/prospects hear and understand the whole truth about their options.

5. They don’t change horses.   As the marketplace continues to soften, they show loyalty to the carriers that supported them throughout the hard market carnage.  They make certain that these carriers are treated fairly at renewal time.  They understand that underwriters will soon have “silver bullets” in their hands and want to make certain they get their share.

6. They don’t let the bidding process begin.  Through the use of Stewardship Reports, underwriter meetings, and Total Cost of Risk (TCOR), these brokers make certain the client sees their true value.  By doing so, the Consultative Broker sees the renewal as simply another project to help the client with.

Throughout the course of next year, if history repeats itself, the cycle of a softening market will continue.  Successful Consultative Brokers will position themselves to be perceived as professionals who understand how to help clients reduce their costs.  The insurance marketplace is simply one facet of this Total Cost of Risk approach.  They will not become victims of the marketplace, but captains of their own destiny.

And stay tuned for our fourth annual year-end survey form, which we will be distributing to all of our Consultative Broker Briefing readers shortly.  We are looking forward to receiving your feedback and insights about the current state of our industry, so please take the time to complete it.

Best regards to all Consultative Brokers,

Rob Ekern
President
C.R. Ekern & Company

 

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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.

Copyright 2007 C.R. Ekern & Company