A boutique benefits agency competes with and wins against national brokerages by building on the advantages its size gives it: a consultative sales process, the speed to bring new solutions, a vetted bench of specialists, and a village of peers and solution providers behind the owner.
Employers tend to assume the bigger firm is the safer choice, and these advantages are how a smaller agency proves that assumption wrong and wins the business.
Why employers assume a national brokerage is the safer choice
If you own an independent agency today, you've watched a lot of your peers sell, and it can start to feel like you're on an island surrounded by big houses. When employers pick a national over you, the reason is usually some version of "we think you're probably going to be too small," and the old line still holds that no one gets fired for hiring IBM.
Most of the employers our agencies serve have fewer than 2,000 employees, with many being less than 500. To a national firm, that's a small account, and it often comes with less attention than the employer expected.
One agency we work with competed for an employer that was frustrated with its current broker.
- A national firm submitted a 41-page capabilities presentation that said nothing about the employer's situation.
- They went on to explain that much of it was out of scope for a company their size and would carry a surcharge.
- The employer would also go into a service pool with no dedicated account manager until it grew.
Our client won the account. They took time to understand the client’s needs and introduced them to the account manager who would lead their account. The employer appreciated knowing who their first point of contact would be and liked that someone at the agency was in charge, so it wasn’t left to them to reach out to a pool with questions.
How to answer "the national has in-house services"
Another client recently spoke with a prospect who all but shamed them for outsourcing their compliance support, noting that a national competitor offered compliance in-house.
We coach boutique owners to address that concern by emphasizing specialization.
- Vet potential solution providers, and have a close group you work with regularly.
- Partner with specialists who are experts in their field and niches.
- When a client needs someone who knows a particular group size or industry, you can match them with your specialist whose experience best fits their needs.
When you coordinate well with the solution provider, your client experiences a single team, and you are there and involved enough to own the outcome if something goes wrong.
Use your agility to bring new solutions to clients first
A boutique can turn on a dime, so when you learn about a new product, provider, idea, or piece of software, you can vet it and start putting it to work immediately. A national firm has to move the same idea through layers of vetting and approval before a producer can bring it to a single client.
Your speed and agility are among your biggest advantages. When you have structure and processes the team follows consistently, it can be a smooth transition to bring in new ideas.
However, if you run your operation on a hope and a prayer, new ideas and solutions introduce chaos. Take the time to get your team organized.
Use a consultative sales process so you stop sounding like every broker
Employers hear nearly the same pitch from every broker who calls, and they lump everyone together and default to the biggest name. A boutique can't win that comparison on headcount, so the sales conversation has to help the employer see the full scope of their benefits program, from cost and compliance to how employees experience it.
The MORE System gives producers that conversation. Its three phases, the Executive Briefing, Strategic Analysis, and Alignment Plan, keep the focus on the employer's business and goals and bring HR and the C-suite into the same discussion. In many companies, those two groups aren't aligned, and a nervous HR team will protect the status quo unless leadership is part of the decision.
The agency that won with its account manager also beat four national brokerages for a company setting up a new division with nothing in place. The nationals wouldn't walk the company through the rudimentary steps to get started. Our client slowed everything down, explained how the healthcare system works, treated every question as a good one, and won the business.
Build your own bench of industry peers and solution providers
A national firm gives its people an in-house bench of managers, peers, account teams, and specialists right down the hall. A boutique owner can build one too, made up of industry peers and solution providers who want to see you succeed.
I think of it as building a village, or making your own family.
- Your peers are other agency owners and leaders you can call when you're stuck, who will push back when you're avoiding a hard decision.
- Solution providers belong in the village too, and the best ones know your clients, teach your team, and show up for your agency. We call that role being a "friendor," part vendor and part friend.
Goose is where many of our agencies build their village through industry-specialized coaching, PAR groups, and 30/30 Soapbox Sessions. Wherever you build yours, choose people who will challenge you, and keep them close.
Where to start competing against the nationals
When a prospect tells you you're probably too small, ask to show them how you work before they decide, the way our client does.
Look at the last deal you lost to a national, identify the advantage that would have changed the outcome, and start building it this quarter. If you'd like help deciding where to start, Kevin and I are glad to talk it through.
Frequently asked questions
How can a small benefits agency compete with national brokerages? A small agency competes by building on what its size makes possible. That means using a consultative sales process like the MORE System, leveraging speed to bring new solutions to clients first, maintaining a vetted bench of specialist partners, and having a village of industry peers and solution providers behind the owner.
Why do employers choose national brokerages over boutique agencies? Many employers assume a bigger firm is the safer choice and worry that a boutique will be too small to handle their needs. However, employers with a few hundred employees may find that a national brokerage treats them as a small account, with surcharges for services outside its scope or no dedicated account manager. Asking to show the employer how you work before they decide gives a boutique the chance to answer that concern.
Is in-house compliance support better than using a specialty partner? Not necessarily. The value depends on the expertise and how the work is managed. A vetted specialist with deep experience in a client's group size or industry can bring both depth and breadth the client may not otherwise have access to. We recommend that the agency coordinate the work and remain accountable for the outcome. Owners should be ready to explain how their partner model works when a prospect raises it.
photo by Wesley JvR/peopleimages.com