John Wepler brings to light the most disturbing aspects of insurance brokerage — the Ugly Denial of Reality.
This week, we have discussed the positive attributes of the insurance distribution industry, assessing the risks to your business and the potential downsides. Now that we find ourselves in the middle of a global pandemic with “new norms” changing daily, what are you supposed to do about it?
1. Set Communication Guidelines
In a recent webinar poll, 92% of the participants indicated their teams are working remotely.1 Your staff likely has questions and concerns and are looking to leadership to set the tone. How are you, as a leader, engaging with your staff today? How are managers engaging with their reports? How frequent and organized are your company or team meetings? If you haven’t already invested in a video conferencing software solution, chances are you are looking at them now. Getting comfortable with and embracing this new form of communication can take some practice, but there are many studies that highlight its effectiveness. It is quickly becoming an expected form of interaction. Set guidelines and intentions for employees in this work from home environment, understanding that everyone’s situation is different.
2. Prepare for the Worst
During the past decade, it’s been easier to shelve difficult decisions as the industry has enjoyed organic growth, year in and year out, combined with a typically strong and predictable cash flow cycle. Today, firms need to prepare for the worst. Certainly, we would expect that reducing headcount would be a last resort, but it’s time now to look at your metrics: revenue per employee, performance reviews, etc. Understand who is not contributing fully to the organization. As the saying goes: Measure twice, cut once. Even if you aren’t in the position today where reducing staff seems like a necessary option, it’s important to start the conversation so you aren’t rushed or pressured to do something in the future without proper consideration. If you’re considering taking advantage of one of the government small business assistance programs, find a trusted adviser that can walk you through the options. Included HERE is an overview of some of the options and implications for small businesses.
3. Dive into Expense Details
It’s time to take a hard look at your expenses. Certain selling expenses such as client lunches, conferences and other investments may not be a priority right now. Examine where else the organization is spending on “non-essential” line items. We work with many firms who have never looked through their own General Ledger detail and thus do not have a strong grasp on what they are spending in certain areas. If there is any “down time” as a result of the slowing business environment, it might be time to roll up your sleeves and dive into the details.
4. Reinforce Your Value
We often hear from clients that retaining an account is less costly and more valuable than going out and selling a new account. In a normal environment, MarshBerry would take a strong position that there is a way to do both with equal success. Today, when new sales may not be as fruitful as usual, it’s a good opportunity to solidify those relationships with your top clients. Hopefully you have been communicating your value proposition to your clients at renewal. Now is the time to step up on the service side to solidify the relationships. Reach out to them, ask how they’re doing and be there to help them. Everyone is dealing with different issues, and a little empathy will go a long way. Now is the time your clients will listen to you. You may discover your client needs some value-added services that you have been offering and they have yet to take advantage of (i.e. HR support, premium financing options, etc.). Reinforcing your role as a resource for them will only help your position if there is future competition for that account.
5. Fine-Tune Training Techniques
Not only has your physical location and the way you interact with your employees practically changed overnight, but arguably your most important function, sales, is likewise going to change. Now is the opportunity to train unvalidated producers in best practices sales techniques so these producers can evolve and hit the ground running when the economy thaws.
If you have questions about Today’s ViewPoint or would like to learn more about potential risks to your business, please email or call Phil Trem, President – Financial Advisory at 440.392.6547.
Special Announcement: With such an overwhelming demand for the “Evolve Your Selling: Changing Your Sales Approach During the Pandemic” webinar, MarshBerry is adding a second session! If you have already registered for the session on Tuesday, April 7, we look forward to hosting you. If you were not able to register and would like to attend please join us for Thursday’s session.
Evolve Your Selling: Changing Your Sales Approach During the Pandemic
- Date: Thursday, April 9 @ 11:00 a.m. ET.
- Click HERE to register. Space is limited.
1MarshBerry Webinar: It’s Not Business as Usual But it is Business – Impacts of the Pandemic for Insurance Brokerage Firms. 3/31/20.
Marsh, Berry & Co., Inc. and MarshBerry Capital, Inc. do not provide tax or legal advice. Tax and legal professionals should be consulted separately before making any decisions that may have tax or legal ramifications. Any references to tax implications in this presentation should not be interpreted as the provision of tax advice.
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