2010 was a challenging year for brokers working in the employee benefits industry. Many insurance companies have reduced commission rates in 2011 to comply with new MLR requirements. There are many brokers who are expanding their businesses in this market. We’ll explain how these brokers grow their business, as well as a simple method that anyone can use to start a small agency.
Noam Levey, a Los Angeles Times* journalist reported recently that smaller businesses now offer health benefits to their workers. This is possible because of the current market. Obamacare offers a tax incentive to businesses that have less than 25 employees to offer health care benefits. The incentive offers a 35% tax credit for companies with less 25 employees on moderate or low pay scales.
Group benefit brokers have a huge opportunity to grow their business because over 99% of businesses with more than 200 employees offer health benefits. Only 75% of firms with 10-24 employees offer employee benefits. This is even lower for companies with fewer employees.
Still need convincing? United Health Care gained 75,000 new customers in the first six months since health reform was implemented. This includes companies with less than 50 employees. Blue Cross Blue Shield of Kansas City reported an increase of 58% in small business insurance purchases since April 2010. Both insurance companies committed to marketing to small businesses with the new tax incentive.
MORE FROM EXISTING CRLIENTS
Many studies over the years have shown that it costs three to six times as much to acquire a customer than to keep a current client. No matter what study you believe in, clients are expensive. It is crucial to retain the clients that you have. Your relationship with clients is the most important aspect of retaining clients. People will prefer to purchase from people they trust and know.
Bonnie Brazzell and Gil Lowerre, both of Eastbridge Consulting, an insurance marketing firm that specializes in benefits, wrote a monthly column in Benefits Selling* magazine. They argued strongly for benefit brokers to expand their efforts in selling voluntary benefits. Of the 28 insurance companies that offer voluntary and worksite benefits, 13 offer just group benefits, while two offer individual benefits and twelve offer both individual and group benefits. The survey also revealed that more than half of the companies surveyed get more than a quarter of their new business from voluntary benefits.
WORK SMARTER- INVEST IN YOUR HOME BUSINESS
In recent years, many companies have cut their staff and overhead. This is also true for many insurance agencies. Brokers must be more efficient and willing to invest in their businesses to implement the strategies mentioned above. Let’s start by listing the things you want to accomplish:
- Keep building stronger relationships with existing clients.
- Establish a relationship with potential clients and customers.
- Educate prospects and clients about employee benefits, including voluntary.
You have a limited amount of time in a given day. This means that you need to plan your day according to your priorities, your limits and your logistics. Your success depends on investing in the tools you need to achieve these goals. Many new tools have been developed as a result of technological advancements, especially internet-based technology. Many of the older and more reliable tools can now be accessed via the internet.
The client newsletter is one example. The fact that the biggest brokers can produce their own newsletters for clients has been a benefit for many years. This is because they have the time and resources to create an effective newsletter. The majority of insurance companies send out some kind of publication to their clients, although the visibility for the broker is limited. Many of these newsletters have been delivered electronically to clients in recent years. It is clear that large brokers and insurance companies would not send out client newsletters if they didn’t produce positive results.
What do you need for a great, efficient client newsletter?
- Your prospects and clients must read it! Your clients won’t read a newsletter that is full of comics or “fluff”, and will throw it out the trash. Do not waste your prospects and clients’ time by sending a newsletter that is devoid of new information. Your clients want to read a newsletter that informs and educates them about current issues that matter to them.
- Your agency should have a strong brand in your newsletter. Your newsletter should reflect your agency’s branding. A client newsletter that is effective should include a place for your company name, contact information and logo to be prominently.
- Your newsletter should be published and sent out to clients on a regular basis. The frequency of the newsletter should be published and sent to your clients on a regular basis. There are some differences. Some people believe that a weekly newsletter is sufficient, while others feel it is too frequent. Some people prefer a less formal approach and send their newsletter only on a quarterly basis. A monthly newsletter for clients is the most popular.
- The newsletter can help you identify potential prospects.
- In the interests of time, it is possible to send your newsletter to clients via email. A newsletter that is email-based will not only save you money on printing and postage but also allow you to send it out to your clients quickly. Some people believe that only newsletters sent by U.S. Mail will work. These people claim that spam software from many clients blocks too many emails. If you notify your clients that you are sending them a newsletter every month, they will be able to adjust their spam software so that delivery is possible. Your clients and prospects will enjoy receiving your newsletter every month once they have read it and found the information useful.
Insurance companies and brokers with the most resources can produce their newsletters in-house. This may not be true for small and mid-sized agencies. This task has been attempted by many agencies, but with little success. They proudly distribute the first issue, followed by a second and third editions, until something more important to their business demands their attention. The newsletter will be forgotten before you know it.
If you are a small or mid-sized agency, it is a good idea to find a third party that can provide your client newsletter. Ask your agency to name the newsletter provider if they outsource their client newsletter. Start with a Google Search using terms like “client newsletter for employee benefits”.
The most important requirement of all is the newsletter’s content. Your newsletter will be thrown out if it doesn’t connect with clients and prospects. Your agency’s visibility is the next most important aspect.