Do customers want a broker – or a consultant?
Brokers work hard for their money. Increasing premiums, matched with pressure on fees and commissions, is forcing many to not only sharpen their pencil, but also find new ways to provide value to clients, over and above traditional services. The answer could lie in providing a more consultative offering. But if so, how can brokers make this possible?
Every business knows that success means staying one step ahead of the competition and delivering greater value to customers. For insurance, this is no different. The world is changing, and brokers large and small know they need to keep up, including how to avoid the ever-present threat of disintermediation.
But what does this differentiation look like, and how to achieve it? Technology may provide the answer. With tools that enable brokers to work smarter and more efficiently, with greater flexibility and automation, and by using actionable insights from data-driven analytics to provide greater value across the customer journey, they can better support customer needs – as well as their own.
There’s only one pie
The new business pie is, however, only so big. This means that bigger brokers are looking for ways of both handling major customers more cost-effectively and smaller high-volume business more profitably. In addition, SME regional brokers are looking for ways to stay lean and mean, whilst offering services that can attract the bigger more profitable fish, via automation and advice.
The good news is that businesses need insurance, however, it’s often at the bottom of customers to-do list, only looked at when necessary. This may explain why historically many brokers have only talked to their customers at renewal time or when there is a claim. The opportunity now is to use today’s technology, with a data first approach, to go beyond this and really engage with customers on an ongoing basis, whilst keeping costs down.
The recipe for success
The global brokers have considered themselves as consultants for some time and offer a wide-range of services beyond the transactional. Most other brokers need three ingredients to move to the next level.
Firstly, they must be available to offer a personal service when customers need them, which means being able to work flexibly from anywhere, anytime, 24/7.
Secondly, brokers must have easy access not just to files, but also to data driven insights. And, it is this combination of a personal service and actionable insights, which makes up the third winning element.
By bring these ingredients together brokers can take on more of a consultancy role, providing a greater scope of services such as risk management advice, whilst developing new business opportunities, by cross-selling and up-selling based on customers previously untapped needs.
Breaking down the silos
Most brokers have access to masses of data that could help them to better understand their customers’ needs. However, to make use of this data brokers need to be able to access and leverage it. Not easy when much of it sits in silos or different spreadsheets at many broking houses.
Fortunately, cloud-based platforms exist that enable brokers to bring all of this data together across the customer journey. Data from these insights will enable winning brokers of the future to offer additional consultancy services to customers, based on their individual needs.
For instance, when handling a portfolio, brokers can benefit from knowing which customers buy what from them, all on one screen. It is then an easy fix to see where the gaps are and suggest additional products, or added value services such as risk management advice, training or surveys, to fill them.
If it seems a stretch to consider brokers as consultants, bear in mind that the ‘Big Four’ PwC, EY, KPMG, and Deloitte started out life as accountants. Now they are huge professional services firms, offering a wide range of services, well beyond just the numbers.
New ways of working
Our minds are like parachutes, they work better when they are open.
And open they need to be now, as the working world is changing faster than ever. This process had already started, but it has been accelerated by the pandemic, which has forced us all to find new and better ways of working.
Working in a way that is more efficient and takes brokers towards being true consultants will not only benefit brokers, but their customers too. This means more wins and greater customer retention, as well as improved profitability through increased revenue generating activities.