There are many differentiators that companies can strive to set themselves out by. A few examples are Customer Service, Industry Focus, Specific Technologies, Product Quality, and Price…some want to stand out as the best value, some want to stand out as the least expensive, others want a price point that is in the realm of comparison, but with providing superior services or widgets (optimum value). It is NOT always true that the more you pay the better the widget or service…but as the saying goes, we generally “Get what we pay for.”
Differentiators are key to success
According to Hinge Marketing, differentiators must meet three important criteria in order to be successful. 1) It must be true. You can’t simply make it up. 2) It must be important to potential clients. If not, what’s the point? 3) It must be provable. If you can’t demonstrate that it is true, it won’t be believed.
When it comes to services and hospitality, it often holds true that how much you pay and who is providing the stay makes all the difference. In flights you can pay for different tickets in different classes; when you fly first class, you get a decent meal and unlimited adult beverages, where coach is just a snack and free soda. Or if you stay at a five-star resort, you will be living in luxury, comfort and impeccable service from the resort staff vs. staying at a three-star resort where it’s just a decent room and very little service or accommodations. There are many examples of what “You Get What You Pay For” when it comes to most services and industries.
Third Part Administrator services are no different
This often holds true as well when it comes to insurance options, and TPA (Third Party Administrators) services. An insurance policy that is more forgiving with underwriting, or provides protection with minimal-to-no out-of-pocket obligations, is going to come at a higher premium. The same is often found true with TPA services. The more the services rendered, the greater the customer touch, the more the services will cost.
There is another expression that says the team is only as strong as its weakest link. To the same extent a product or service bundle is only as strong as it’s least performing part. If an auto manufacturer is designing a luxury sedan, it is going to use high grade components to keep the car smooth, quiet, and performing…whereas that same manufacturer may put lower quality parts into a sedan they are selling to attract those mostly concerned about price-point.
Expanding on that, when insurance brokers are putting together an insurance bundle/package, they are going to want to ensure every component of that offering meets the differentiator they are striving for as they are putting that bundle together. If that is the least expensive, or the highest quality, or somewhere in between; they will want to be mindful that each part of that offering will perform appropriately.
Balance is key to keeping long term clients
When choosing a TPA, Insurance Carriers, Insurance products, etc to be part of an employer/organization benefits offering; it is important that all components of this offering are equal or better than one another to help ensure the service commitments exceed the commitments and goals of the broker and their direct client.
If your agency or brokerage is not pitching solutions based exclusively on price, but moreover on experience or quality, it is important to choose the right partners that will give that level of performance to keep the clients happy; simply going to price may end up pushing the client away to a competing broker. With this in mind we encourage all brokers to consider their goal, purpose, and differentiator of their agency, brand, and package and choose the contributing TPAs, Carriers, and Products that supports the same objective of keeping long term clients well served.