5500 Data = Leverage
While searching for prospects, a standard practice is to attempt to determine where your competition stands. After all, to know their book of business, what their strategies are, and how much they are bringing in can give you leverage.
Wrangle worked with miEdge.biz, [known as “the Edge,” within the inner broker circles] to find out more on what 5500 data can deliver towards that competitive leverage and provide the top ten key insights.
- Wrangle: Why are brokers looking at the 5500 data?
miEdge: Before a broker kept a client based on providing an excellent relationship and solid service options. Fast-forward to the present time, and this does not hold the same high value. Clients now strongly consider who can provide lower costs as the go-to.
Brokers as a result need to stay ahead by finding the right benefits packages, the options to lower costs and the right carriers to do the job. The 5500 data gives the brokers a chance to see what others have had in place and what was the cost associated with the arrangement. Additionally brokers rarely go for a blitz approach; they very much stay within their niche and then search what others in that niche have achieved in lowering costs.
- Wrangle: What are the most sought-after searches?
- Brokers usually want to search for a specific eligible employee range that fits their target market.
- Both Brokers and Carriers want to analyze their competitor’s book of business for a specific region and/or for specific lines of business. They want to review the type of employee plans and compare and contrast those to see if the commissions have been standard or non-standard.
- Carriers want to see who the lead Broker is for specific companies
- Brokers want to review how long the competition has held onto its book of business over a period of time
- Wrangle: What would a broker do with this information?
miEdge: The data actually can help the broker keep the clients, not just be a part of the strategy to learn of potential prospects. Costs no doubt are going up. To learn of the trends and what is to come, you are now an informed broker. In this role you can proactively inform the client before the renewal is presented, the strategies to lower costs and create creative benefit arrangements to shield the client from the not so pleasant renewal process. For the broker providing leadership, clients in turn may stay loyal.
In prospecting, 5500 data provides a look behind closed doors and an ingenious broker can create options from what the prospect has experienced in the past. For example: If a prospect was with a broker for an average was 7-8 years and the clients had been paying nonstandard (on the high side) commissions, the approach could include an opportunity to introduce change with standard commissions of what others have paid from the same industry with the same range of enrolled participants.
- Wrangle: You have mentioned, “carriers.” What is the significance of the carriers with prospecting?
miEdge: Monitoring carriers also is part of the steps to developing the strategy in prospecting. Brokers need to know the products especially those for their niche/ book of business and which carriers can deliver and stand out from the rest.
Side note: Carriers use the 5500 data to keep an eye on the brokers and review the commissions and premiums to see what is to be deemed as a trend, standard costs etc.
- Wrangle: When brokers search a territory is population density a factor?
- Geographic target markets are specific to broker’s territory
- Population density isn’t necessarily an influence. In contrast, density of Corporate Headquarters impacts the potential number of companies in each State.
- Wrangle: Does the type of Funding play a role?
miEdge: Yes, brokers and carriers want to see the types of funding with focus on Self-funded plans.
- Wrangle: Do brokers stay away from MEWAs or those with Trusts?
miEdge: MEWAs are targeted by a small number of brokers and consultants. Many miEdge customers want to identify reported Self-funded and collectively bargained plans.
- Wrangle: Do brokers stay away or gravitate to those employers with multiple mistakes on the 5500s?
miEdge: Brokers who offer services connected with compliance and risk management frequently search for errors, omissions, and potential late filings for the Form 5500.
- Wrangle: When you go to conferences, what are brokers saying is important to them in the future?
miEdge: Brokers freely admit that to keep clients and find new ones is harder and harder. They want to identify mission critical information which is information focused to their particular target to create a solid pipeline.
- Wrangle: What have been the bigger surprises for you, areas you did not expect brokers to evaluate, search, etc.?
miEdge: Voluntary plans. They have become the go-to approach to enhance and create a well-rounded benefit plan but not increase costs for the Plan Administrator.
Before we wrap up this discussion, there is one other aspect to point out. In reviewing 5500 data, you may leave your desk with more questions rather than answers. These questions are excellent gut reactions declaring what needs to be explored. You now have your conversational pointers to use when meeting with the prospect. No longer are you to have a random generic cold call but rather a decisive approach to your prospect.