During the 1992 presidential campaign, James Carville, the colorful campaign strategist for Bill Clinton, used the now-famous phrase “It’s the economy, stupid” to focus the campaign on the central issue of the recession.

After several sessions and numerous conversations with brokers at the recent Workplace Benefits Summit conference for benefits brokers in Boca Raton, that phrase came to my mind slightly modified: “It’s the strategy, stupid.”

Business insurance – both employee benefits and P&C – historically has been a transactional sale…and really not even a sale. The client has insurance and just wants a lower increase in the (ever-rising) premium. There’s no sale to make, only managing the renewal process to keep the increase as low as possible.

Today, however, and especially in benefits, the transactional model no longer brings enough value to the client. Not enough value and not enough differentiation for the broker or agent. Transactional brokers are becoming irrelevant in the marketplace as consultative selling becomes the hallmark of the best brokers – who are now consultants.

It’s the strategy, stupid

But something else became crystal clear at this conference as I listened to these high-performing, highly successful benefits brokers consultants who are growing their business – and often looking to acquire smaller shops. What differentiates the best benefits consultants and what allows them to bring massive value to the client is their use of strategy.

I’m referring to the strategies that these consultants bring their clients to solve problems for the client and improve the client’s efficiency, effectiveness, and profitability.

Going forward, for benefits firms that want to survive & thrive post reform, the game is to:

1)    replace lost medical commissions,

2)    eventually wean the firm off of medical commissions entirely, and

3)    provide the client massive value to earn fees sufficient to remain profitable.

Merely managing the renewal or just pitching products won’t win the game…far from it. These are the tactics of firms that surely will lose the game.

Meaningful solutions for your clients rarely come in the form of products or services but rather as strategies. Certainly some problems can be solved with a product or service. The greater value, however, lies in strategic solutions.

One example would be any number of alternative funding strategies for the employee benefits, such as full self-funding; a self-funding captive; and defined contribution, with or without a private exchange. As the expensive mandated benefits and onerous paperwork requirements of ACA take full effect and as renewal increases on fully insured plans become unacceptable and unsustainable, such funding alternatives will be necessary for your clients who don’t want to drop benefits but can’t continue the status quo. They’ll need a new benefits strategy…from you or from one of your competitors.

Another is benefits strategic planning, which consultants use to craft a three-to-five year plan for the client’s benefits that integrates with the firm’s enterprise strategic plan. This process, led by the benefits consultant, puts the consultant and the firm’s CFO on the same side of the table and makes the consultant a true strategic partner to the firm.

Yet another example is population health management, the effective sibling of wellness programs, which aggressively measures employee health through both Health Risk Assessments and biometric testing, uses premium differentials to provide employees with meaningful financial incentives to remain or become healthy, and uses predictive analytics to identify future health risks to guide employer actions to improve employee health. If these terms are Greek to you, now is the time to start your education.

And, a final example, a compliance program, which uses a systematized process to evaluate compliance risks – especially around new ACA requirements – and ensure the client is in full compliance to avoid the steep penalties in the law. Compliance strategies today will include not only an assessment to gauge the client’s compliance but also up-to-date HR technology that provides both the employee monitoring and the reporting necessary to remain compliant. One of my agency clients just finalized an agreement with an employer to provide strategic compliance services…a $35,000 consulting contract that did not include the BOR/AOR on the medical, no insurance, no benefits at all. This is a great example of bringing massive value to the client, value for which the client is willing to stroke a check.

Few benefits firms will deploy all of these strategies but the firms that will win the game, that will survive the thinning of the herd to emerge a winner, will use multiple strategies to bring massive value to the client, to get and keep the medical and, most important, generate meaningful fees that will, one day, replace the soon-to-be extinct medical commissions.

What strategies will you use to bring value to your clients?