April 17, 2018 07:00
For a broker to succeed in the digital world is not as difficult as it seems, believes Sean Mulcair, co-founder of the consulting firm Gradient Solutions. Simple strategies allow you to know of the success, » he said.
In his practice, a consultant, Mr. Mulcair said to observe a common feature of brokers is oriented towards the growth and development on the Web. These are the innovators, he says, who are not afraid of the technology.
«They do not think that technology will replace them. They see rather that it will support. These are also people who adopt early the new. We see them also go to technology fairs in the United States. They want to be the first to test the new features. Even if it crashes, they are happy to have tried it. They are pioneers. They are ahead of the competition, » said Mr. Mulcair.
For these folks, their mantra is continuous improvement, » he said. «They are still in the process of analyzing their results and their figures. They make a continuous analysis of their management. «
Mr. Mulcair is estimated at $ 500,000 to $ 750,000 investment that the brokers who want to invest in technology. This number can be scary at first, » he said. However, it is not so high as this, he adds, if you compare it to the multiple of acquisition that we see in the brokerage, which revolve around four times the commissions.
«What is the purchase price to the cost ? It is much smaller for the broker who invests in digital. Out of ten submissions, if he made three sales per day, its cost of acquisition will be lower than if he decides to buy his neighbor. When it comes down to a cost of 2 or 2.5 times the commissions, » said Mr. Mulcair.
Everything can grow from a business plan, » he said. The important thing is to follow the cost of acquiring the customer, regardless of the adopted approach. «If it is too expensive, it is because there is a problem with the model. «
Conversion rate vs rate of closure
Mr. Mulcair also calls the dealers to calculate their conversion rate and not only their rate of closure. What is the difference between the two ? The rate of closure is that of pure sales. The conversion rate measures rather the people who remain close to the broker, even if they are not customers. Maybe they do not buy coverage through him, but the broker sends always of the information. It has a contact with them, which can lead to an eventual sale, » he said.
«It is easy to see where the boat sank when there is a problem. Maybe these questions are too long when he addresses the customer ? Maybe is it too complicated ? Or even its marketing is not attractive for insurers that they represent ? «said Mr. Mulcair.
Less easy for small firms
He acknowledges that this technological shift is less clear for smaller firms. He gives the example of a quebec cabinet, which it advises in this moment. This broker has decided to take the digital shift. However, he questioned whether he would be able to convert its employees traditional to this new model. He came to the conclusion that it is not. This broker has so decided to open a subsidiary completely digital, » he said.
Such a gesture has two advantages, says the co-founder of Gradient Solutions. This broker ensures to retain its current customers remain interested in its traditional model. It will then look for new customers interested in its other model.
«He comes swinging its portfolio traditional. It is, according to me, the only model that can work for smaller brokers. They must bring something new. We see brokers who are successful in changing the mindset of their employees, but it’s still marginal, » said Mr. Mulcair.
With this model, the small firm will not seek 1 or 2 million dollars (M$) premium volume of the day to the next, » said Mr. Mulcair. It will instead look for a volume of 50 000 $ to 100 000 $, which is not negligible for a small firm, » he said. It will also stop it from having to sell its volume to a larger player, » he adds.
Another approach, Mr. Mulcair said see more and more firms hire people who have good knowledge in technology, but not in insurance. «These people make the phone ring ! Buying leads is also a good avenue, » he says.
Mr. Mulcair also calls the dealers to create assumptions that the most accurate possible in order to sell. «The broker must come to assume things, especially where a client contact. If the information that the broker returns to the client is accurate at the time of submission on the Web, it will be better. He will be able to send him a chat to see if he can talk with him by phone, or even continue the discussion as well. If the price is too high, there is a way to refine smoothing with him two or three aspects. «
Bet on the conversion
For Mr. Mulcair, the sinews of war, is the conversion. «There is no mention of online sales. We are still in an era or the Web is used primarily to speak to the client. A broker who recalls a customer who comes to fill in a submission on its Web site will have a 30% chance to sell him a policy. If he waits an hour, its percentage of success is 10 %. The goal for the broker is to know what is the right time to make a submission to the client and sell him his salad. «
Brokers must prepare for, » said Mr. Mulcair. In the digital world, a retention rate which is acceptable is of the order of 70 % to 75 %, well short of the 90 % that knows the insurance industry. «The retention and the customer experience are taking on a whole new meaning. This is why, in other industries, we see departments of retention to see on the day. «