Part 1, Building a Consultative Benefits Practice

Since starting my career in health and welfare benefits sales in 1976, the cornerstone of the industry has been the "Product Driven Sale" with "Service" as the great differentiator. In today's volatile market, at its best, the traditional spreadsheet/service driven approach to benefits is not a differentiator! In fact it is almost certain to subject you to "competitive bidding" on an annual basis. This "rut" is not beneficial for the employer or you.




If you want to become consultative, you will need to understand that products and services are only a solution to problems. Promoting the solution without truly understanding the problems is, in essence, "getting the cart before the horse.



 The value of spreadsheets to analyze and compare products and the value of service to keep clients will always be there. And, for some time to come there will be many situations where the good old product-driven service approach will be an acceptable and perhaps even preferable plan of attack.

This article is the first in a twelve part series of articles which will lay out the step-by-step process of what is critical to developing a truly consultative practice. The process is simple in concept but fraught with many pit-falls and impediments to success. It is much like moving from the American System of Weights and Measures to the Metric System. Both do the same thing but one is vastly superior in simplicity and accuracy. The major problem in use of the Metric System for those used to working with the American system is trying to use both to solve the same problem. Constant conversion is futile and counterproductive. That is why a well-designed consultative strategy needs to have "fall-back" points where if the prospect is unreceptive to this approach, the broker can seamlessly fall-back into the spreadsheet/service strategy without missing a beat and in most cases be in a stronger position than if they had started there at the beginning.

A note on timing is important to remember, you need significantly more "lead-time" to utilize a consultative approach, normally 90 to 180 days prior to the employer plan year.

"Fact Finding" – The Foundation

"PROBLEM IDENTIFICATION" is the heart of consultative planning. Accurate and complete Fact Finding is the foundation for problem identification. Fact finding is not just getting a census, current plan information and budgetary considerations. There are two distinct steps in the fact finding process;

  • The preliminary or "general physical" fact finding step, the Discovery Fact Finder (available on our website)
  • Detailed fact finding ("specific diagnostic testing") based on the results of the Discovery Fact Finder.

There are several reasons for splitting the fact finding process into two distinct steps, even if you "have the ear" of the "Decision-Maker". First, it saves time and improves efficiency; detailed fact finding is only necessary where problems or opportunities exist. Second it dramatically improves the degree of support that you will garner in acquiring the information. Third, it offers the best opportunity to work upstream if your point of entry happens to with HR or payroll. This is critical because to succeed with the consultative sale the final presentation must be made to the senior management of the company (CEO, CFO, COO, Owner, etc.), all the HR Manager can do is to say NO to a consultative presentation. And, they certainly don't have the technical background to make the presentation to the senior management. This is one of the fall back points, if you are working with HR and are not allowed free access to the senior management, it is easy to go back to the more traditional spreadsheet strategy where HR may actually be able to make a yes decision.

The single biggest pit-fall in fact finding is getting de-railed by product questions and going into product presentations before problems have been clearly identified. To be consultative, it is critical that you follow the two step fact-finding process religiously. If you get drawn back into the product arena, you may make the sale but it will be much smaller and more exposed to future competition.

DISCOVERY – The First Step

Discovery fact finding is difficult to do well. It takes practice. Practice you can do with associates or even a spouse. Key points include:

  • Keep the initial fact finder short, preferably one to one and a half pages. Once the initial presentation is made you will be given the permission to get all the detailed information you need to do a complete analysis of the benefits, including census and payroll information. Remember when a Doctor does a routine physical they only get "vital" information and base any additional testing on those findings
  • Don't go into lengthy explanations (for years, this was my biggest problem, yup, the "product presentation" trap). Ask the questions, listen to the answers and take good notes. If product or technical questions arise defer them or respond with short to-the-point answers and get back to the fact finder. You may even want to hand a copy of the form to the decision maker while you ask the questions. You should be able to complete a well-crafted fact finder in about 10 to 15 minutes. That is if you don't get into too much detailed explanation. Remember, at this point the purpose is to get information, not diagnose problems or present solutions (products).
  • Always complete the form in person or on the phone, proper completion requires your personal assistance. It is imperative that the decision maker or whomever is giving you the information understands its importance. If you e-mail or drop off the form it will usually get shuffled to HR and it may take weeks to get it completed. If that happens you have lost much of your opportunity.
  • Set the appointment for presentation of your findings (I call this the "Benefit Strategies Proposal"). A startling statement is an excellent way to set your next appointment. This one is very effective and has worked well for me: "Mr. CFO, from this information, I am sure there are a number of strategies we can present that will help you achieve your benefits objectives more effectively. When would be a good time for us to get back together to review our findings? I will only need 30 minutes of your time for the presentation". Give yourself five working days in most cases. You don't want them to think that it is too easy (it isn't).

What Questions need to be asked?

First and foremost, keep it short. You will lose the decision maker if you subject him/her to more than 15 to 20 minutes of questions. The fact-finder should not be more than 2 pages long, preferably just 1 to 1½ pages. Critical information should include;

  • sufficient data to identify any problems with compliance issues such as COBRA, ERISA, HIPAA, Section 125, group contract compliance, etc.
  • Current plan structure; benefits offered, employer contribution strategy, participation levels, current broker relationship, TPAs, etc.
  • By far the most important information is the evaluation and ranking of employer objectives. This the key to the sale, you are asking the employer what is most important or most lacking in current plan design.
  • A "work upstream question", this very simple "How does your decision making process here at [company name] work? Ask the question, then, SHUT UP!

 You may also want to leave room for notes and comments unique to the prospect or client.


Once you have evaluated the "Discovery" information and prepared a preliminary "Benefit Strategies Proposal", you will have sufficient knowledge about the current plan to request the necessary information to complete to complete a comprehensive three year "Strategic Plan Design".

The "Benefit Strategies Proposal" will normally be sufficient to excite the decision maker or HR manager to willingly release all the necessary information for preparation of any insurance proposals (as well as analysis and solution to any of compliance risks identified by the Discovery).

What Questions need to be asked?

Details and the amount of information that is necessary will vary based on the information obtained in the Discovery Fact Finder. Information that will almost always be necessary:


  • Census information necessary for completion of any employer sponsored group insurance benefits.
  • Payroll information.
  • Copy of the company's Employee Handbook (if not obtained with Discovery)
  • Detailed information on any voluntary benefits currently offered (if not obtained with Discovery).
  • Employer budgetary objectives (What is their financial picture?).
  • Additionally, you will need to get sufficient information to evaluate any potential compliance risks:

1.  A copy of the current Section 125 Summary Plan Description. You will almost always want this one. Common compliance issues here are:

a. No plan document

b. No provisions for HSAs if the company is offering one

c. Different Section 125 and medical plan years.

2. 5 year company ownership and executive management history.

a. Who have been the owners of the company in the last 5 years?

b. What are the percentages of current owners?

c. Who are the corporate officers (by duty) and what are their incomes?

3. Information on COBRA administrative practices if no TPA

4. Sufficient information to evaluate any ERISA problems. This one is usually satisfied from the Employee Handbook. Questions can be obtained from any small group ERISA TPA.

5. HIPAA compliance questions.

6. Employee surveys to elicit and promote employee engagement in their benefits.

7. Anything else that came up during the initial Discover process.

As you can see the nature and detail of the necessary information will vary substantially from case to case. If you are zealous about sticking to the process and not getting drawn back into the product spreadsheet trap, the consultative approach can achieve significant results. Just as an example, when I was selling small group between 1976 and 1989 (commissions were considerably higher then), I generated 60% of my benefits revenue from ancillary benefits. YOU CAN TOO!

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