When we brokers and advisers take on new cases, the meter starts running as soon as we pick up the phone or reply to an email. That is when we start spending money. Our own time is, of course, immensely valuable. Then start adding to that the cost of all the support personnel we employ. On top of that, consider all the housing costs – rent, utilities, insurance, etc. Then, you have the business services such as marketing, advertising, etc. I don’t have to tell you that it all adds up. If you run a serious, top-quality operation, the numbers can be large.
Every time I take on a new case, I know my total cost per hour for working on the case. Not only that – I know on average how many hours each case will take. This data is vital because it helps me make smart business decisions. It empowers me to determine which cases would really be worth my while. Those cases in which I can make some good money, I’m quite happy to work on. However, those cases that look like loss leaders present a dilemma. How do I satisfy the client without taking a hit financially? I am, after all, in this business to make a profit. If I make a habit out of chasing unprofitable cases, then I won’t be around to cash in on the really profitable ones.
This is one of the key areas of value a strategic partnership with a specialist broker can bring you. Assuming they have the business organization in place to still profit from taking on smaller, complicated, or otherwise time-consuming cases, they are an ideal solution to the problem of satisfying customers on cases that are not worth handling on your own. Simply hand the ball off to them, let them take care of the entire sale from the initial client interview to policy delivery, and get paid half the commission.
With this format, everybody wins. The client gets the product they need from a qualified professional. The specialist broker gets a sale and becomes more integral to your team. And you make a profit on a case that otherwise would’ve cost you money – and kept you away from all the cases that would be more worth your time.
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