Selling benefits in the small-business market isn't easy. It's time-consuming, offers smaller com-missions, and is often more frustrating than serving other clients. These may seem like good reasons to stay away from small businesses.
In fact, many producers seem to treat selling to small businesses the same way baseball players do about doing time on a farm team. Once they get sufficient experience, they can't wait to get called up to the big leagues. For benefits producers, it's big businesses with hundreds or thousands of lives that pay their bills.
Yet there are far more small businesses than larger ones, and that means opportunity.
"Small-business owners are the ones who need the most help," says David A. Proctor, president and CEO of Proctor & Company, an employee benefits firm based in Natick, MA. Proctor, whose firm specializes in working with businesses with 20 to 250 employees, makes the point that most of these companies don't have an HR staff to manage benefits.
"More often than not, the responsibility for employee benefits is one of a handful of hats worn by either the owner or someone else in the company," notes Proctor. "They generally have little or no knowledge and are overly burdened with handling other tasks," says Proctor, who has been in the employee benefits field since 1985.
Then, Proctor makes a significant point. "Even though employee benefits is a major expense and a top priority for employees, it is often the little finger on the left hand of management."
It's not surprising that many small-business owners try to avoid getting involved in employee benefits other than "reviewing the numbers" and making the final decision, usually based on cost.
Poorly informed and inadequately trained producers and those who do not understand small-business issues only compound the problem.
Yet an attractive employee benefits program that meets employees' needs and expectations can give small businesses a leg up in attracting and retaining quality employees, and that takes producers with experience and expertise.
Following are four guidelines for successfully selling in the small-business marketplace.
1. Position yourself as a small-business benefits advisor. This is a critical step, and without taking it, you're likely to fail. The task is to differentiate yourself from the competition: the many other benefits producers on the street. It's useless making calls when you look just like every other benefits salesperson. This is self-defeating because it trains pro-spective clients to focus on price.
When that happens, you've not only wasted your time, but you've said to prospects, in effect, "I am no different from any of 20 other benefits sales-people."
Particularly in benefits sales, products are the means to what an owner and employees want to accomplish. It's the same in selling benefits.
You're the architect. If you don't have a vision of an integrated program, you're not going to make the sale.
Your "materials" may well include health care, short and long-term disability income coverage, critical care insurance, cancer coverage, life insurance, long term care insurance, and 401(k) plans that are company paid, voluntary, or, more likely, a combination. But what makes the difference for the client is that you know how to create a design that meets the requirements of both the owner and the workforce.
2. Make the first meeting memorable. The first meeting with a small business is critical. Make a mistake here and it's over. The primary task at this meeting is fact-finding. Just as giving individuals an opportunity to talk about themselves produces a wealth of helpful information, the same is true with small businesses.
The way to do this is to make sure the prospective client pre-pares for the meeting. When arranging the meeting, indicate that you are going to email or fax them information you want them to have available when you get together, including details on programs they currently have in place. You also need to know what the employees think about their benefits program. You may ask that the employees fill out a brief questionnaire.
Why is this important? Without this information to review and discuss, the conversation at a first meeting will inevitably focus on products and prices. You've lost control at this point, and you be-come just another huckster in the prospect's eyes. Without a lower price, you don't have a chance.
You become an advisor in the owner's or manager's mind based on what is discussed at that meeting. You want to talk about the business and its employees and gather information about current and past programs and why they worked or failed. This will position you as "different" from product-focused salespeople.
The 80/20 rule applies here. Be sure the prospect talks 80 percent of the time. The best way to get acquainted is to let the prospect tell the story.
3. Market your expertise. Since most everyone selling benefits has a briefcase full of the same offerings, the products themselves are little or no help when it comes to differentiating you from your competition -- and there's plenty of that today.
Try conducting two or three small group seminars a month, either first thing in the morning or for an hour at lunch. Make it clear that these are educational and that there will be no selling. Choose topics that are timely and topical: "Getting Employees to Understand and Appreciate Company Benefits," "Five Costly Mistakes Small Businesses Make With Their Benefits Programs," or "Why Voluntary Benefits Can Increase Employee Satisfaction." Changes in laws and regulations are also good subjects when they impact benefit programs.
Second, write articles on subjects of interest to employers and distribute them to business and industry publications in your market area. As long as these articles are in-formative, helpful, well-written (and edited), and not self-serving, they have a chance to be published.
To get started, write a sample article and send it with a cover letter to editors, indicating that you can provide helpful information to their readers. Articles of 800 to 1,200 words are generally about right for most publications, although editors may want pieces at times that are somewhat shorter or even longer.
Many publications are now posting articles on their Web sites, either instead of or in addition to the printed edition. This can be an advantage, particularly when someone searches for a subject you have written about.
Published articles can be a valuable resource for producers, but only if they put them to work.
Make reprints (giving full credit to the publication where they appeared) and enclose copies with direct mail prospecting campaigns, use them as handouts at meetings and seminars, and make them part of proposals.
Because an editor finds your article of value, it carries a particular cachet and enhances your credibility with prospects. It shows that you have knowledge and are not just selling a product.
4. Prepare and distribute e-bulletins to prospects. Stay-ing in front of prospects is critical. But an e-bulletin can be helpful if it features timely and useful information. If it's all about you, it won't be read. However, case histories are on target. They show a reader that you produce results.
Every producer knows dozens of "frequently asked questions."
An e-bulletin is the place to give the answers. An e-bulletin need not be lengthy; one page will do just fine.
Every producer needs an extra edge today. Mini-seminars, articles in publications, and e-newsletters are valuable ways to communicate that you know what you're talking about and that you are client-centered.
All this suggests that selling benefit programs to small businesses can be the right strategy for those producers who want to build a book of business with a solid base and who are well organized and committed to long-term objectives.
John R. Graham is president of Graham Communications. He can be contacted at j_graham@grahamcomm.com.
