When I started in the health insurance business at the ripe young age of 17, I sought to be the most attractive choice to the broadest possible number of clients and prospects. The law of large numbers certainly would work in my favor. And back then, it appeared that was standard operating procedure for this industry, as well as for many other industries.
This resulted in a very large influx of leads and a large group of possible clients to market to. Again, the strategy seemed sound at the time. The problem was that most of those leads turned out to be people just shopping on price (and if you win on price, you will also quickly lose on price). This resulted in a tremendous amount of effort to quote, spreadsheet, etc., and a fairly low close ratio on what were fairly low-revenue clients (and even lower since the Affordable Care Act took hold).
In 2009, I restarted my agency after a move from New York to North Carolina, and I decided to make that the turning point for doing things differently. And admittedly, that change did not happen overnight. It seemed that all the forces around me (employers, employees, carriers and even other brokers) all wanted the status quo to continue. This was despite at least some of those groups being very unhappy with the resulting higher premiums and eroding benefits. So I still found myself caught up in that already flowing river. Changing the tide has proved to be very difficult but it brought great rewards.
In this new environment, I began with the end in mind. What results did I want to deliver to my clients? What I really wanted was to stop winning business because we were the “least bad” option and instead win business by providing real value and real results. I so badly wanted to deliver good news to clients year after year.
So we set out to become the agency that can deliver the results that are important to me personally and to our clients. And I can tell you that this makes us the exact opposite of what most clients actually want us to be. This sets us up to have uncomfortable conversations, to push employers and employees way outside of their comfort zones and shift their thinking so that they consume health care in a fundamentally different way. Most employers want us to deliver results, but not change anything in how the employer buys health care and how the employee consumes it. That just doesn’t work. After all, if nothing changes, then nothing changes.
Somewhere around this time, I was introduced to a TED talk by Simon Sinek titled “How Great Leaders Inspire Action.” In short, Sinek said that every business has a “Golden Circle” with three rings: what they do as a company, how they do it and why they do it.
He believes that most companies and their leaders start with “what” because it is the easiest to convey in spoken word and in print. If they ever move beyond “what,” they then talk about “how” they do it. But the really great leaders and really great companies start with why they do what they do. It is Sinek’s belief that people will be far more inclined to buy from you if your “why” aligns with their “why.” In other words, people buy on emotion, not on facts and figures.
Sinek’s 14-minute TED talk completely opened my eyes and solidified something that had been in the back of my brain for years, but was so abstract to me that I never recognized it consciously.
As a result, I spent several years expressing and honing my “why” for me personally and for my agency. I think every personal and corporate “why” should be unique and heartfelt and passionate. This should be what gets you out of bed each day. Not to make money, we all need to do that. What gets you excited and pumped, and makes you feel accomplished? Answering that can help you find your “why.” From there, I worked backwards and filled in the “how” and then the “what.”
How does all this translate into how we do business today? Well, we offer a pretty comprehensive but defined set of services, strategies and solutions. It’s not right for every client, and not every client is right for us.
The first thing we look for is a business owner who truly cares about their employees. Last year, I had the pleasure of meeting Harris Rosen, the owner of Rosen Hotels and Resorts in the Orlando area. As we walked through his flagship multibillion-
dollar property, and despite being a septuagenarian, he knew the first name of every single employee we walked by, from the property manager to the mother of four sweeping the lobby (and he even knew her kids’ names!).
Is it any coincidence his health care costs for his employees are 30 percent or so below other surrounding businesses and he has an unheard-of low turnover rate for a hospitality-based business? Obviously, a lot more goes into those outcomes than these particular factors, but it is indicative of the type of employer we want to work with.
We also look for an employer who offers benefits because they want to, not because they have to. We look for an employer who will no longer stand by and continue to operate in the opaque, inefficient, overpriced and low-quality health system that typically is presented to them as their only option.
We already have moved to a compensation model that involves a flat fee whenever possible. We are starting to work with employers on a system where we charge half our normal fee in exchange for shared savings over three years for the strategies we implement. This fully aligns our incentives with those of the client as the client makes a three-year commitment to our agency as well. It also pays us more if we deliver results for our clients, instead of the traditional model that rewards the opposite.
So today, we work with far fewer prospects, but a much higher percentage of our prospects are more than $50,000 in annual revenue and we close a much higher percentage of them. At a time when we feel as if we are being asked to do more work for less pay, we have found a path that allows us to work with fewer clients, and get higher pay. Can someone say Utopia?
David Contorno is president and CEO of Lake Norman Benefits, Mooresville, N.C. David may be contacted at [email protected]