Advisers can add value for their clients and benefit themselves from added value services, as Steve Haynes explains
With the growth in non-advised sales, a rise in the use of price comparison sites, and increased price competition in the group risk market, advisers continue to look for ways to differentiate and enhance their proposition to their clients.
One of the most obvious tools at their disposal is the added-value service. The list of value-adds available is as long as your arm, including employee assistance programmes (EAPs), occupational health services, screening services, medical advisory services, and so on. Bright Grey's Helping Hand service for example, provides a wide range of services including legal helpline and career counselling.
Historically, it was only the insurers that offered value-adds, but more recently, advisers have begun to realise the value they can bring to their own businesses, either as part of a protection product they recommend, or offered independently for the benefit of their own clients.
Paul White, head of risk benefit consulting at AON says: "Our key priorities are in growing the business and maximising client retention, which in part is about evidencing to our clients the breadth and range of our consulting capabilities, of which effective communication of added-value services can be key."
So how can advisers use added-value services effectively and to their advantage? Put simply, by telling their clients about them, or by asking the provider to support them in doing so.
Jamie Kelly, group risk adviser at Barnett Waddingham says: "We look at the overall benefits and services provided to each of our clients and treat the relevant added-value services they have as an integral part of their overall benefit package. We also recognise that the awareness of some added-value services is so high amongst employers today that advisers can no longer afford not to be discussing them with their clients."
Positioning is all important
It is important to get the positioning right: where does the ‘added value' service fit in the end product? How does the message need to be positioned in order to get through to the end member and ultimately deliver the highest impact for the adviser?
If it is linked to a retail protection product, then it may be an interesting discussion point, potentially playing a key role at point of sale, or perhaps further justifying a recommendation to a client. If it is linked to a group protection product, it may be that the value-add should be communicated in a different way to the main product. For example, group income protection is not typically communicated as an employee benefit, but as part of an employee's terms and conditions of employment. Therefore, it is important to position the added-value benefit in a way that is familiar both to the employer and employee.
Jon Campbell, group risk director at LEBC Corporate Healthcare Solutions says: "Added-value providers can work to our advantage, helping to support us in the communication of their services to our clients. With Best Doctors for example, its client managers will help to ensure the benefit is communicated as part of all our Canada Life and Generali Group Income Protection client's benefit packages. Our clients tell us that they really value the add-ons and support we make available to them. This ultimately helps strengthen our end relationship with our clients."
Today, the real measure of success with added-value is in the impact the services can have in contributing to the sales and retention of the core product. A few years ago there was probably too much focus on using utilisation as a benchmark by which to judge the value and impact of a value-add. This is something of a red herring, for a number of reasons.
First, utilisation statistics are used to gauge impact because they are often the only measure available. That does not make it the best measure. Secondly, a value-add service could have good utilisation but sales and retention may not improve for the adviser or provider. Does that make it a good or poor service? Third, lack of utilisation may simply be because intermediaries are not communicating the added-value benefit effectively to both their advantage as well as their clients.
Lack of awareness
The net result is there will be some eligible members that may not be aware of services they have access to. These are valuable services that can not only improve lives (stress counselling, early detection of serious illness, expert medical opinions that help avoid unnecessary and costly treatment and surgery) but also the provider's and/or employer's bottom line.
Ultimately, the adviser and provider should determine how and when the added benefit is deployed to maximise the impact. For example, if the principal objective of the added benefit is to maximise sales, then high visibility of the additional benefit at point of sale is paramount. If strengthening the adviser-client and/or provider-adviser is the primary driver, then demonstrating the value that the additional benefit brings will be important. Case studies and testimonials are invaluable in demonstrating that the benefit that the adviser is delivering is tangible.
About 99% of the benefit that a protection product brings to the customer, whether it is the core product or the added-value service, is the peace of mind it gives in having access to it and knowing that it is there ‘just in case'. Lack of communication of a benefit should not be confused with a lack of intrinsic value in the service.
Competitive landscape
Intermediaries are increasingly recognising that in such a competitive landscape they must differentiate and maximise the end value they bring to their clients. One of the first intermediaries in the protection market to independently build additional benefits into its own proposition was Oval Healthcare.
Dieter Clausnitzer, head of corporate healthcare says: "Added-value services for us are all about strengthening our overall proposition. They help us maximise sales and assist in the retention of our healthcare clients. We looked for a proposition that not only matched the needs of our clients but one that actually enhanced the PMI experience at the same time. The fact that we are able to give members a tangible benefit and provide a possible cost containment tool in the process ensures that both the employer and the employee benefit from the added-value service."
Clive Jaques, managing director of Estate Financial Planning further comments: "In most cases, added value services are not available directly to the public. The services provided by some of the insurers we work with give us a certain degree of exclusivity and it is rewarding to communicate these features to our clients. Added value benefits have always been looked at as a benefit to the customer or employer. They are also a way that an adviser can differentiate their client offering to ensure that they are meeting their individual clients' needs."
As a feature of the protection market, added-value services have an important role to play, particularly as mainstream products become more commoditised. Where there is price pressure on providers this is even more important, and can form a vital weapon in a provider's sales and retention armoury.
Furthermore, both employers and employees are now increasingly aware of the benefits that additional and ‘free' services can bring both to their business and their staff. Intermediaries themselves realise the importance of the impact added-value services can have on their business, strengthening their relationship with clients and demonstrating that they are essential to their clients, through being aware of what services are available and helping to communicate them effectively.
Perhaps the final word should go to Andrew Ward, a director at intermediary Your Sure, says: "In my opinion, true value for money for individuals can only be through advice-based companies, but in an era where non-advice is more prevalent, this is not always clear to the client. As an advice-based company ourselves, we cannot be complacent and rely purely on consulting capabilities to secure and retain business, so let's not stagnate, let's add value and show the client why advice is the best route."
Steve Haynes is UK business manager for Best Doctors
