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10 Steps To Fight The Encroaching Zenefits Business Threat

Zenefits, the technology behemoth from San Francisco, has developed a business strategy that is casting a dark shadow over the insurance broker business throughout the United States.

In a nut shell, it is providing administration software in return for the rights to become the Agent or Broker of Record. If you do not have a strategy to keep your clients, then your revenue – especially from small to mid-sized companies -- may be gone within the next two to three years.

It is getting darker, but the light is not gone yet. Here are some ways to fight Zenefits:

1. Get Your Company Removed from the Zenefits Website

Zenefits has listed your company and dozens of other brokers from around the country on its website. This is not free advertising for you; it is a calculated move to augment its own website traffic with Search Engine Optimization. In other words, the hard-won reputation behind your company’s name is being used to drive traffic to your competition.

Contact Zenefits and ask them to remove your listing from the Broker Directory.

2. Fight Fire with Fire

You can use the same strategy: Add a comparison page to your website and present your company in the best light with everything that your offer. Use a catchy headline. Throw in some graphics. Pull out all of the stops. Then give Zenefits a less-than-inspiring listing. That will give you access to some of that SEO.

3. Call Zenefits’ Bluff

If you are confident about your own product and services, take Zenefits up on its offer: fill the space it has provided on its website with your own information, and trust that it will be respected. Take advantage of Zenefits traffic, but be aware that the route to your information will not be easy for potential clients to find.

4. Customer Service Is the Foundation

More generally, focus on customer service. Zenefits is a technology giant trying to become a broker for thousands of companies. Using an economy of scale strategy attracts numbers, but it hurts the humanity of customer service. That is a weakness to exploit. They may know obscure programming languages and have a comfortable desk chair, but that is very different from the traditional broker’s skill of keeping tabs on client businesses, creating tailor-made solutions, and maintaining personal connections.

5. Provide a Better Technology Solution – HR Studio

Technology is expensive. Every company wants to inexpensively streamline their operations. There are other available options.

HR Studio, for example, is a company that provides a free cloud-based platform that brokers can provide and keep their clients, too. HR Studio is an automated Human Resources administration tool designed for small and mid-sized businesses to eliminate the inefficiencies of manual processes, save time for HR administrators, and deliver better service to employees.

Frankly, HR Studio is a stronger product, with many user-friendly features like automated health insurance information, payroll, PTO, time & attendance, ACA, COBRA, and much more. It may even be the carrot to attract Zenefits clients to your own business.

6. Blanket Solutions Don’t Work

Every client is different. Every company has different demands. Every state has different laws. The government is constantly changing and updating and modifying regulations. There is never a one-size-fits-all solution. Eliminating brokers would cut off the first-hand, localized knowledge that is in tune with the real-time changes that affect everything in the insurance system. That is a strong checkmark in the broker column.

7. Keep Your Clients in the Loop

Inform your clients about this new reality in the insurance business. An informed client is a happy client. Plus, it could be a good excuse for some face time to reinvigorate your relationship.

Clients want to improve their business; they want to save money; and they may be inclined to lean toward a glitzy startup tech company from San Francisco. They need to know that losing the personal connection to a broker often leads to poor customer service, an inexact understanding of a company and its needs, and wasted time. And startups often fail.

8. Strength in Numbers – Use Professional Organizations

Band together. When the threat comes, it is safer to be in a group. Use professional organizations to pool resources and create a coordinated front. Do some research and educate yourself on what other brokers are doing. Some already have implemented plans to deal with this new reality. For example, some brokers are focusing on a retention of just 2-3%. Others have found organic growth through payroll, or with compliance or worker’s compensation angles. Your fellow brokers are competition, but they are also happy to share their success stories.

9. Go (Extremely) Local

Speaking of professional groups . . . What about the local Chambers of Commerce? Who will have a better relationship with a small business: a far-away tech company or the longtime local broker who has been a leader in the local community? There are many local events throughout the year that keep the personal touch on the traditional broker side.

10. Insurance Is for the Worst of Times

Remember the reason that insurance exists. Nobody wants to use it, but, when disaster strikes or the medical reports are dire, everyone is happy to have it. And, hopefully, they are relieved that their policy was correctly personalized to their particular situation.

Is it really a great idea to have a technology company in charge of matching living and breathing people with health insurance?

Click here for more information about HR Studio or to request a demo.

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