Successful Firms Need to Master These Techniques

In a recent edition of The National Underwriter, Editor Sam Friedman recommended that risk managers begin to explore the capabilities of sophisticated regional and local brokerages. This recommendation was based on recent broker megamergers and the growing lack of choice available to buyers.

For an independent agency or brokerage to take advantage of this opportunity, it should adopt the consultative brokerage style. In particular, its managers must learn the techniques that these sophisticated buyers have come to expect. The stewardship report and the executive summary are two techniques that firms must master to be successful in large accounts.

STEWARDSHIP PROPOSAL

Brokers call it "stewardship"; others call it a mid-year client review. Whatever the name, it's the single most powerful way to protect your renewals against the competition. When executed properly, the mid-year client review provides your firm a tremendous opportunity to:

• Cement client relationships for the coming year.
• Determine the client's expectations.
• Judge the client's satisfaction level at a non-threatening time.
• Provide the client with forward-looking information.
• Flush out competition.

A stewardship report should be a verbal presentation between your team and the client. Remember, this meeting should be a free exchange of ideas. One of its key purposes is to judge the client's expectations and satisfaction level. A written report is simply not as effective as a two-way dialogue.

When preparing such a report, here's what you should do:

• Determine the key accounts that should receive it. As a general rule, they're the several top accounts that provide you with major revenues.
• Ask yourself several questions about these accounts. Have we met their expectations? What valuable services have we performed? What specialized resources have we provided? Have they acknowledged our value?
• Prepare a short presentation using overheads.
• Make certain that a dialogue occurs between your organizations.

Here are some commonly asked questions concerning stewardship report presentations:

• Where should it take place? It should take place at your office or the client's office. Do not present the report in an informal atmosphere, since you must make certain that all issues are discussed.
• Who should attend? All members of your team, including internal staff people, should meet with the client's entire team. This provides you with two important opportunities: to build relationships and to get input from every member of the client team.
• How long should the report last? These meetings should last no longer than 45 to 60 minutes. They're intended to provide an overview, not a complete technical explanation of coverages. If you can't demonstrate value in 45 minutes, you have a big problem.
• What should they contain? Begin with a brief introduction about your firm. This is important because some of the client's staff may be unaware of all your services. Then move to a demonstration of three ways your organization has been of value to the client. Conclude by providing the client with forward-looking projections.
• What should be accomplished? You should be able to walk away from that meeting with a sense of where you stand. If the client strongly agrees that you have brought value, move forward and begin planning the renewal together. If the client appears withdrawn, find out what the issues are.

Stewardship reports are crucial to becoming a skilled consultative broker. They provide your firm with a tremendous chance to be perceived as a problem solver and a valued advisor. Failure to take advantage of this opportunity creates a vulnerability that doesn't need to exist.

EXECUTIVE SUMMARY

They say that first impressions are the most important. When it comes to executive summaries, they may be the only impression. Proper use of an executive summary is critical to the perception of becoming a consultative broker.

The executive summary is an important part of any professional proposal because of the impact it has on very busy people. Simply put, most decision-makers have neither the time nor the desire to wade through multiple pages of insurance detail. This is left to the technical-based people at lower levels.

An effective executive summary displays the following characteristics:

• Brevity. It's usually limited to two pages or less. If longer, it's really a proposal.
• Concision. The sentences are short and to the point. "Fluff" is left for the body of the proposal.
• Third party language. It reads like a consultant's report, not a sales document. Avoid first-person references such as "we," "our," or "us."

The executive summary is usually the first section of the proposal. In some cases, it's wise to prepare several stand-alone copies of it for easy distribution. If you plan to create these separate copies, make certain that each one has an attractive cover.

Here are some guidelines regarding the layout of an executive summary-but it should be noted that each deal may be different. Consultative brokerages should use their knowledge of the target client's issues to customize the executive summary.

The opening paragraph should provide the reader a brief introduction to your firm. Demonstrate what makes your firm unique-for example:

• "XYZ Insurance is one of the largest providers of insurance and risk management services in [geographic location]."
• "Formed in 1899, XYZ is considered a specialist in the area of marine cargo."
• "The staff of XYZ consists of more than 30 professional employees."
• "Some of the firm's key clients include [clients' names]."

The next section should identify issues of importance (which you've developed throughout the prospecting process) to the client or prospect. The development and presentation of these issues are what defines your firm as a consultative brokerage, rather than as insurance salespeople. They constitute the themes of your presentation.

After the key issues, indicate your organization's solution to them. Show the expected results of these solutions and how the client will benefit. This could take the form of a simple display. Refer to the body of the proposal for details and an in-depth demonstration of these benefits. After all, the executive summary simply sums up the facts.

Finally, restate what your organization is proposing for the client, the time frames, and your unique qualifications for providing these solutions. Avoid making this closing too sales oriented. As a consultant, you need to be perceived as a partner, not as someone looking for a commission. Use statements such as:

• "XYZ recommends this course of action to client."
• "XYZ is prepared to implement these actions in the following time frames and with these expected results.

Effective use of stewardship reports and executive summaries is a critical skill that independent agents and brokerages must master. These techniques will allow an organization of any size to improve its perception in the buyer's eyes. The result will be improved success in the large-account marketplace.