Fall 2006 / No. 69
Improving Worksite Persistency (Part
II)
by Gil Lowerre
In the last issue, we discussed persistency and the four
keys to managing the persistency of voluntary/worksite business.
Two of those keys are within the company’s control, but
the other two are more difficult to impact. This article discusses
those latter keys, enrollment and sales, and lays out a roadmap
for increasing management’s leverage in the effort to
improve persistency.
Enrolling
The third
key is enrollment, a process the company can impact, if not
directly control. We know from our research that enrollment
is not seen as very satisfying by employees. They complain
that it is primarily a bureaucratic exercise, filling out forms,
and is designed to aid the insurance company, not the customer.
Also, depending on the methodology, enrollment can be quite
expensive, involving investments in technology, staff or contractor
expenses, or both. Clearly, a function that is unsatisfying
and expensive is an appropriate focal point for innovation.
Customers
know what they want from the process. It’s certainly
more than completing forms. It’s more than information
or knowledge, or even calculations. As an ideal, they want
personal advice, delivered by a human being in a supportive
environment; they want a “high touch” process.
And while we probably can’t yet afford to deliver exactly
what they want, there are clear benefits to moving in that
direction. After all, the better we succeed, the more our brokers
are going to want to use our process, and the more we get to
directly impact persistency.
Selling
Selling,
the fourth key, can be imbedded within the enrollment tool
(as with most web enrollments), but more commonly, an enroller
is selling, either in conjunction with an enrollment tool or
without a tool (with a brochure and an application).
As with
all forms of sales, prospects are quick to pick up on the underlying
messages. Is the salesperson selling me a product because he
needs to sell it—a “hard”
sell? Or is he selling me a product because I need it?
The process
of moving towards a needs-based sale involves several steps:
- Recognizing
that this person (customer) is unique
- Uncovering
and defining needs
- Prioritizing
needs
- Quantifying
needs
- Determining
solutions
- Managing
trade-offs
While it
is very unlikely that any sales system in an enrollment environment
will be able to do all of this, directionally the message is
clear. And if we can imbed some of it in our enrollment tools,
so much the better. If not, we need to determine how to develop
the skills in others and then reward their usage in the enrollment
process.
Implementation
Overall,
it is clear that persistency impacts much more than our internal
processes and customer service procedures. Managing persistency
impacts the way the broker behaves, the way the enroller behaves,
and the tools they use. It impacts the way the customer is
treated and perceives us and our business processes. In
total, managing persistency is the act of reshaping our value
proposition to all of our external audiences. They will
be treated differently, they will feel differently, and we
will get different results.
There are
three broad steps in taking control of persistency, and they
should be done in the following order. (Too often, companies
reverse the order resulting in dysfunctional systems and confusing
messages to brokers and customers.)
- Define
(or design) the persistency measures, measurement tools,
and standards and objectives desired.
- Design
and test the enrollment and selling tools and their ability
to deliver the results sought.
- Create
the incentives and disincentives for compliance (compensation
and otherwise).
Improving
persistency is obviously good business, despite the fact that
most companies do very little to manage their results. Persistency
is a measure that can be understood, impacted, and improved.
Even if some of this is a bit out of our grasp, we can still
help others to use them on our behalf.
For
information about Eastbridge’s Persistency Audit, contact
us at (860) 676-9633.
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