For some brokers, it seems that hanging on to their existing business is their number one priority. We hear it again and again: it’s less costly to keep an existing customer than it is to acquire a new one, so brokers do everything in their power to retain their current clients.
With client retention as their number one priority, these agents use customer service as their main selling point. They answer calls and questions throughout the year, and at renewal time they sit down one-on-one with each of their clients to make sure their providers are in the network and drugs are in the formulary.
And each year, these brokers make less and less money. That’s because, even with all the great customer service, 100% client retention is impossible – you’re going to lose some business. And because of all the great customer service, these brokers don’t have time to get out there and drum up more business. They may not realize it, but their agency is in a death spiral.
A better way to do business
Fortunately, there is a better way, a way that will save you a ton of time and allow you to earn a lot more money. You can set up a private exchange website, allow a call center with licensed agents to handle the individual sales, service, and renewals, and spend your time doing what you really love to do – prospecting.
This is just a smarter way to do business. If you look at how most brokers spend their time, it’s divided between five key activities:
- 1. Prospecting
- 2. Selling one-on-one to each individual prospect
- 3. Servicing existing clients throughout the year
- 4. Shopping the market (again) and renewing current clients
- 5. Complaining about the size of their paychecks and blaming Obamacare for their lack of success
Wouldn’t you rather cut out steps 2 through 5 and instead spend more of your time finding new business? It’s true that the uninsured rate has dropped rapidly this past year, leading some to believe that most people who want health insurance already have it. But there’s still plenty of business to be had. Small employers, for instance, will continue to evaluate their options and consider dropping the group plan – especially if the new defined contribution bill ends up passing. Certain ethnic groups have a higher uninsured rate than the rest of the nation, creating an opportunity for brokers who can get in front of them. And the turmoil created by all of the recent health insurance mergers will cause millions of people to shop around and consider switching plans.
Brokers who are hanging on too tightly to their existing business will be unable to win many of these new clients. In contrast, brokers who see the big picture and invest in a private exchange solution could see their income skyrocket.