We bring our community of employee benefits agency leaders together regularly through our 30/30 Soapbox Series to learn, discuss, collaborate, and explore all areas of business operations, from marketing and sales to service and leadership. In a recent session, we took a step back to tackle a bigger, more foundational question:
What business model are you running on, and is it the one you want?
A business model is often discussed in abstract terms; at its core, however, it’s practical. It’s the set of ideas that explains how your agency organizes itself, delivers value to clients, and gets paid for doing so; the blueprint for how your business works today and how it will work tomorrow.
For many agencies, that blueprint has been, more or less, inherited from a historical model offered by the carriers and duplicated across the country for decades. Intentionally designing a business model is the first step in moving your agency into new areas of opportunity and growth.
The traditional model and its limits
In the traditional, carrier-centric model, employee benefits agencies function much like franchisees: selling carrier products, operating within carrier rules, and earning revenue largely through commissions and bonuses determined by the carriers.
This model comes with real limitations. Most notably, a lack of control. You don’t fully control what you sell, how you price it, or how you get paid.
What we’re seeing now is an expansion beyond the traditional model, rather than an abandonment of it. Healthier, more resilient agencies are evolving from being sellers of insurance products to solvers of broader HR and benefits problems. Insurance and commissions may still play a role in financing the business, but they no longer define its limits.
Three ways agencies are organizing today
In the session, we explored three core ways agencies tend to organize their businesses. These aren’t rigid categories, and most agencies live somewhere in the overlap.
The customer relationship–driven agency
This model treats all client relationships equally, regardless of size or profitability. The agency is organized around serving clients and delivering consistent value. It’s highly relational and client-focused, but can struggle to scale without clear processes.
The disciplined agency
Here, the focus is on standardization, predictability, and efficiency. These agencies are selective about the clients they serve. Because of this, they build strong internal systems and often enjoy higher margins.
Disciplined agencies create clarity and require commitment and leadership to maintain. They challenge the traditional carrier model with products and services they offer, extending in various directions to serve their clients.
The progressive agency
Progressive agencies are often defying the traditional carrier-led model altogether. They experiment with non-traditional offerings, rethink how value is delivered, and require extensive learning and development to keep pace. This model can be energizing and impactful, but it demands intention and focus to avoid chaos.
Building the business model
It’s possible to succeed with any of these models. The differentiator is not the model itself, but whether you are being intentional about choosing what’s right for you.
Your business model must support the client experience you’ve committed to delivering. If it doesn’t, friction and frustration will show up for clients and team members alike.
As you get intentional with your business model, everyone in the organization must understand its principles. When those principles become shared language, leadership teams can review them regularly, question what’s working and what isn’t, and make informed adjustments instead of reactive changes.
Start with perspective: Who is this model for?
Reviewing or redesigning a business model takes perspective.
Are you building from your own point of view: what you want to sell, what you’re good at, how you want to get paid?
Or are you starting with the client? Do you focus on what they need to get done, how they define value, and what they’re truly willing to pay for?
Both approaches can generate revenue. It’s the culture, client experience, and long-term outcomes that differ so much. Choosing a client-focused perspective requires more empathy and discipline, but it often leads to stronger relationships and more durable businesses.
Mindset drives the model
Mindset was another key theme in the conversation. We contrasted closed and open mindsets in innovation.
A closed mindset protects what already exists: the ideas, processes, and beliefs that “got us here.”
An open mindset looks outward, borrowing ideas from other industries, competitors, and even clients themselves to improve the value delivered.
Building a sustainable business, however, should not center around chasing every shiny new idea. The challenge is finding the balance between resisting change and adopting it without the discipline to make it useful.
Suspending limiting beliefs
One of the biggest obstacles to meaningful change is the belief that “what we’re doing is good enough.” Historically, our industry has financially rewarded mediocrity at a level that discouraged innovation.
That environment is changing.
Carriers have long had outsized influence over agency business models, but agencies are increasingly recognizing the risk of being dependent on partners who could replace them if they chose to. Access to information, shifting client expectations, and new service models are blowing those doors open.
To explore what’s possible, you have to suspend your current thinking. Ask “What if?” Assume that anything could be possible, even if you ultimately decide not to pursue it.
If your team struggles with “that’s the way we’ve always done it,” try creating a “parking lot” to write down those limiting beliefs so they can be seen, yet set aside temporarily and revisited later. This can help your change-averse folks be more engaged in discussions.
Respect the mess
Early-stage thinking should be messy. Start with broad idea generation, allowing practical and fantastical ideas to coexist. After you’ve really exhausted your creative thinking, it’s time to move into synthesis: combining, refining, and narrowing ideas into a manageable set of viable options.
Don’t get hung up thinking that your future business model has to be unique or it won’t work.
The traditional carrier-driven model has been around for decades, and thousands of agencies have had very nice businesses all using the exact same model, so move past that mental barrier.
Truly original ideas are rare, and the minute they’re spoken, they’re out in the universe for all to use. Stop trying to be clever and focus on what your clients want and what you want to deliver. Simple is better for you and the client.
Designing what comes next
Using tools like the Business Model Canvas, agencies can map their current state and intentionally redesign it, working through key partners, activities, and resources to channels, customer segments, cost structure, and revenue streams.
Gather your crew and start hammering out a model that supports your client experience, reflects your values, and gives you control over your future.
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Content originally published by Q4intelligence
Photo by pantovich