Lessons from a lizard? Inside info from a CFO
As a benefits advisor, when you start talking with an employer and say the same thing that everyone else is saying, they aren’t going to believe you.
I have nothing against GEICO or what they are doing. But the honest truth is that their commercial didn’t work on me. I have never called them nor do I plan on calling them in the future. I can just hear the GEICO reps out there scratching their heads. We can give them the same product at a much cheaper price; why won’t they call us? For me, it’s has to do with the questions that go through my head as I think about it. Questions like, what will the service be like? Will they be there when I need them? And many more. Not to mention the fact that personally, I’m not trying to save 15 percent on my car insurance. It’s not even on my radar.
So what can you learn from the GEICO lizard? As a CFO, I get pitched all the time by various benefit brokers, payroll providers, leasing companies, etc. most of whom promise that they’ll save me 10 percent to 15 percent. I don’t know what is magical about that number; I guess they think that 5 percent is too low to get people to budget and 20 percent or higher isn’t believable. But in the end, when you start talking with an employer and say the same thing that everyone else is saying, they aren’t going to believe you.
The second lesson is that while everyone thinks that saving 10 percent or 15 percent is the only thing on the CFO’s mind, it’s just not true. All of us want a few extra bucks in our pockets, but there are other things that we have to consider before cutting everything. One of my biggest worries as a CFO is making sure that I’m mitigating the risks that the company might face so that we can continue to grow. Saving 15 percent is never worth the risk of bankrupting the company in the future. We all want to save money, but the truth is that we worry about what happens when we use the insurance. Most of us are willing to pay a little extra in premium to have comfort in our crisis situations. Interesting to note what some of the other taglines are for car companies:
State Farm: “For all the nevers in life, State Farm is there.”
Allstate: “You’re in good hands.”
Those companies are tapping into the insecurities that insurance is trying to solve and they are not leading with price.
Now, I know what all of you are thinking. “I can provide better benefits to employees and at a lower cost.” I believe you. I’ve been shocked to learn that it is possible, but it’s taken me a few years to actually come to understand that principle.
So what can you do now? Here is an inside tip from a CFO on how you can get out of all of the noise and really start getting a CFOs attention. You have to uncover the top two or three priorities that the CFO and the company are facing. Usually those priorities can be grouped into increasing revenue and productivity, recruiting and retention, increasing margin without increasing risk, and decreasing administrative burdens. As a benefit advisor, you now need to show the CFO how you can help them solve those problems by implementing your solution. For example, if you know the CFO is understaffed, you could lead with talking to them about that and how it makes them feel and then ask them what it would be like to have the extra staff member. Then if you can really help them save money on benefits, you could propose something like, “What if I help save $100,000 to $200,000 on your benefits plan and you used half of that money to hire a new staff? Does that seem like something you could propose to the CEO?”
Related: The Darwin Awards of the insurance industry
Another example would be companies that want to invest in equipment to increase revenue, or maybe they want to hire a new sales rep or buy a new building. All of these are problems that the CFO and other C-suite executives are struggling to solve and that you could help out with by saving them money on their benefits plan.
Don’t be the GEICO lizard. If you just say you’re going to save them 15 percent, you’ll never be more than just another flyby commercial. But if you are willing to adjust your approach and find out what problem the employer needs to solve, then that same cost savings will be your ticket in the door.
Steve Watson, CPA, is Chief Financial Officer at Child & Family Support Services, where he has been able to demonstrate how creative financial decision-making can help support children and families to successfully reach their dreams. Steve lives in Queen Creek, AZ with his wife and children.