Traditionally, Labor Day marks the beginning of the renewal and new business process (or unfortunately, in some cases, Thanksgiving!). Here's what you can do now to secure January 1 renewals and new business.
Many brokers spend September trying to get activity going. October and November are taken up with gathering information. All of this builds up to a December spent in beating up underwriters and bidding or quoting new business. The usual result? A holiday season that's a blur.
There are many Christmas dinners that I barely remember. Before I became a consultative broker, my entire focus during the last two weeks of December was to hold clients and write new ones. It wasn't until I learned consultative brokerage techniques that I realized the holiday season was about joy! Now I always place my renewals and new business by December 10.
Here are the steps you must take to secure your large renewals and successfully obtain new accounts in December:
- Identify and isolate your key accounts. Ask yourself: What are my most significant year-end renewals and new business accounts? Stop reading right now and write them down.
- Take inventory of your client knowledge. What information do you have about these accounts? For new accounts, if the X-date is all you know, you only have fool's gold. For current accounts, are you familiar with such issues as client financial concerns, business expansion plans, and changes in buying style?
- Establish value. Identify three ways that your firm has been of value -- outside of the commodity and price arena -- to each existing client during the past 18 months. These should be ways in which your organization provided resources and expertise that reduced the client's cost of risk, which can be measured in many ways other than premium.
Now comes the tough part: Demonstrate your value now, not in December. Remember, on a large account the buyer has many yardsticks with which to measure you -- particularly, against other brokers. If you wait until December to establish your value, it'll be too late.
Independent brokerages nationwide have horror stories to relate about losing some of their top year-end renewals. In many cases, these accounts changed hands on broker-of-record letters, with no changes to the insurance policies. Think hard -- doesn't this sound familiar? The reason is simple: The holding agent/broker was focused on the X-date. Their competition was focused on ways they could demonstrate perceived value to the client well before the premium was due.
One of the best (or worst) examples I ever witnessed involved a firm that didn't even realize they were competing for their largest account! They were in the marketplace negotiating the year-end renewal when the broker-of-record letter came in. They lost more than $300,000 in revenue. Oh silent night!
After you complete steps 1 through 3 above, you should have a good understanding of your clients' issues and of your ability to be of perceived value. If this isn't the case, you're in trouble. If you don't demonstrate the ways your firm is of value, someone else will. Spend July making certain you have your bases covered.
Those of you who have received consultative broker training know that someone is always in control. The things you do now will determine who that will be at renewal time.
After completing your inventory, demonstrate your value in a formal meeting with the client or prospect. This meeting should take place in their office or preferably yours. The attendees all should be members of your client service team together with the client's decision makers. If the meeting is with an existing client, we call it a stewardship report. On new business it's known as a capabilities presentation.
Here are the goals of your meetings:
- Stewardship Report for Existing Client. Demonstrate ways that your firm has helped the client to reduce their cost of risk. Show how your firm has impacted the client's effectiveness in reaching their business goals. Discuss ways that your organization can be of assistance in the next 18 months.
- Begin the renewal process by outlining your strategy for placing coverages at year-end. That's right-begin the renewal process by outlining your strategy now! Include the client in the process in July or August. Have them sign on to your approach and feel they're a part of the team. If there are storm clouds on the horizon, the client will indicate them and you can do something about it. If not, full steam ahead into the renewal.
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New Business Capabilities Presentation. Demonstrate your unique capabilities with knowledge of the client's specific issues. Whenever possible, demonstrate ways your organization will be of benefit in reducing the prospect's cost of risk. This demonstration should revolve around how your resources and solutions will be applied.
A key to your new business strategy is to convince the prospect to appoint your firm as their broker. Only amateurs use this process to obtain permission to provide a bid on renewal.
When you adopt these strategies for both new and existing accounts, the central theme of your presentations should be this: The insurance can be placed by anyone. The client should choose an agent/broker based on their ability to solve problems. Urge the client to select their broker ASAP and to authorize the broker to make the insurance placement on their behalf. When the client is brought inside the process, they become a partner, not an adversary.
A consultative broker knows the impact of strategy, planning, and deployment of resources to resolve issues. Your ability to demonstrate this in the next 30 to 45 days will determine how successful your year-end renewal/new business season is. Don't wait until the X-date approaches -- someone else may already be in control!