6. Noel Parsons: Turning RFPs Into Opportunity

All right, welcome back to the Broker's Voice. I am excited today. I have got Noel Parsons joining me. Noel is with Strategic Services Group in Grand Rapids, Michigan. Noel, welcome to the Broker's Voice.

Thanks, Andy. Thanks for having me on. I'm excited.

You. Yeah. Hey, we're going to talk a fun topic today. R F. Peace. And so if you are a benefit advisor, listening into this one today, this is going to be one you want to take a lot of notes because you might get your. You might find yourself stuck having to do an rfp. So, number one, we're going to talk about why they're not the best thing, especially for independent insurance agencies. Right. RFPs are typically designed for the big national houses. But two, if you have to find yourself in an RFP, how can you at least be effective. Effective with it? So. But before we get there, Noel, I love asking this question because most of us did not get into the insurance world by design. How did you find yourself in this beautiful world we call health insurance?

Okay, so kind of a long story. I'll keep it short and sweet. I. I'm actually turning 42 on Monday. And I got into this business when I was about 26 years old. And at the time I was actually, you know, I was young and I was just still trying to figure out, you know, what my first big kid job was going to be. And I had a friend that worked at an agency selling property and casualty, and they had just had a producer or something that left and went to a different firm. And she said, you know, I think, you know, you're in kind of doing sales now. And she said, I think you'd be a good fit for this. So I interviewed and my first job in this industry, they actually hired me just to be a telemarketer in the back of the building for the producers. So I started out way back in like 2006 with a ruler and just pages of, you know, companies phone numbers to dial. And I would just sit there day in and day out, just going down the list and making notes and trying to set as many appointments as I could for the producers at our agency. And, you know, I did fairly well at that. And after probably, you know, nine months a year, they started training me to be an actual property and casualty producer. So I was on the other side of the business and I did that for a few years, then got into marketing. And then from marketing I moved into the employee benefit side and kind of with my marketing background and telemarketing and sales.

You know, back then the term business development was sort of a new term for a lot of agencies. And it was a cross between, you know, a marketing person and a sales rep. And, you know, it could mean a lot of different things at a lot of different agencies, but for us, it meant, you know, my job was to go out and market our company and build relationships and meet with organizations that were a good fit for us. And then I would bring in the broker alongside of me. And from there, I still do that to this day. I love that part of my job. But from there I kind of transitioned into, you know, director of business development. So now at Strategic Services Group, I manage our sales force, our sales direction, and I still get out and work with young producers, recruit, train them. And I, again, I still get out and do traditional business development myself, which, you know, many of my peers know in the industry. So I love the spot I'm in. You know, I, I have fun coaching and teaching young producers and leading our sales team. But, yeah, that's my job. Work all over Michigan. We're actually, you said Grand Rapids. We're actually based out of metro Detroit and we do have in. In Grand Rapids as well. Andy.

Yeah. Well, you're up. You're out in Grand Rapids. I'm actually going to be in Kalamazoo in January doing a workshop. So we'll have to. I'll have to make sure I hit you up to grab a beer or a cup of coffee. You know, dare I say, because your background, Noel, you actually love cold calling.

I'm one of the few that just don't have a problem with it. I, you know, I wouldn't say that I love it, but it doesn't bother me. I've trained so many producers over the years that that was such a challenging thing for them to overcome the fear of that dial, you know, and I always told them, hey, nothing is going to happen. Nothing's going to go wrong on that call. Other than the worst thing is, hey, don't call me again or something like that.

Well, and you got to be such an asset to SSG because you're now that you, not only do you have a good understanding of cold calling and what it takes to be successful there, but you also have the marketing background. So as you and I both know, you can't just cold call alone anymore these days. You got to back it up with a good marketing plan. And so being able to do both, I think, has got to be such an asset for ssg. Let me ask you something, because your background's similar to mine, I started in property casualty. What do you see as a big difference in going out and selling property casualty versus selling employee benefits or is there no difference at all?

That's a great question. I, I really think the biggest factor is managing long term cost is more important on the employee benefit side. You know, I haven't been in the PNC industry in a while. Not sure what the cost trends are. I'm assuming like a lot of things, they're, they're going up as well. But it's, it's, it's, it's the most important thing with your employee benefits plan if you're going to keep it manageable for the employees and for your organization, is to have a strategy to manage that long term cost.

Yeah, I, when I work with insurance agencies that offer both PNC and benefits, I tell them if you guys can find a way to create a message around, you know, on the benefits. We often focus on the size of a claim. Right?

Right.

Whereas in pnc the area that you can probably impact the most with cost is workers comp, which often deals with the frequency of the claim. So if one, one side of the house is focused on the size, the other is focused on the frequency. You can be a very powerful agency. Now guys, listening in. If you're watching the video, you'll notice Noel has his Santa hat on today. I completely forgot wear mine. So, so that's on me. But he's gonna deliver some gifts today. That's why Noel's got his Santa hat. So no, we're going to get into the topic of discussion. RFPs. The, the document I think that most independent advisors hate. I think it stands for really freaking pointless. Let's talk about RFPs. Why are RFPs. Why is it so hard to win a piece of new business if you have to play the RFP game?

So you know, an RFP is a sales process that you're entering into and you're really going in on the organization's terms. And there's all kinds of different RFPs, right? Some of them like the ones that, you know, we'll get into later, the ones that we do work on. But you know, some of them do allow you to keep building the relationship throughout the process. Other ones are what I call like the ice cold ones where it's, it's a, they put it on their website, it's public for anyone that wants to reply and they do things like, you know, we're setting, have all the questions in by X date and then by X date we're going to answer those questions and you know, all the brokers, it's public for everybody. And you know, those are the scary ones to me because you know, with an RFP you miss out on so many nuances within your healthcare plan that are important to talk through with an agent. You know, going back to that long term cost. You know, I don't see healthcare as like a one year cost saving game. You know, it's, it's a three, it's a chess, it's not checkers and it's a strategy and it's a journey and you've got to have the right tour guide to go on that journey. And I just think an RFP process a lot of the times removes the ability for the organization to really figure out whether the broker that they're selecting is the one that's really going to have their back long term and really going to go to bat for them, come up with creative ideas, most importantly, do the things that they say they were going to do during the rfp. And I think it's hard to flush that all out when in this industry is so full of software now. And you know, when, when back in the 2006, 2007 when I got in this industry, you didn't have to be a telemedicine expert and an HRES Ben admin expert and a wellness expert in a, you know, benchmarking expert and all these different things that are important today. And when you, when you do one of those RFPs, everybody submits all that stuff, you know, and you're going through that as you know, the HR director, the C suite, you're going through all the submissions and it all really starts to blend together because everybody has got the glitzy marketing material, everybody's got all the software solutions for you. But what you're missing out on is did you build a bridge with the right tour guide to take you on your benefits journey? You know, did you build that trust? Did you build that rapport with that person and go ahead.

No, I was gonna say I, I can remember the, it was literally the last RFP I participated in and I vowed never to do it again. It was a school district in Colorado. They were spending 30 some million dollars a year on health insurance. And I had a pretty direct close relationship to the woman who was running the benefits program. So I decided to participate. And I just remember the work we had to put in with it, the number of questions that were asked. And for those who are unfamiliar with an rfp, you get this document it's filled with a list of questions from various different topics. Each one, each list is, is categorized by topics, right? Scope of services, technology capabilities, you name it. And we had to put it into, to this nice huge binder that looked all pretty and then it was time to turn it in and I had to turn it into the school district's purchasing department. And what I realized was wait to even get out of the first round of the RFP process. There was a board, a committee that was looking at these RFPs and the committee was made up of people who had nothing to do with running that school district's benefits.

Right. That's. Yeah. I mean really not to pick on municipalities, but usually their process is the most rigid and like that. And again, submitting the big binders, selecting the top three, you know, and then, and everybody can come in and do the PowerPoint dance when you've been selected as, you know, one of the top three. And again, you're just, you're missing out on those, those important nuances. Go ahead.

No, no, no, no, no, keep going.

I was just going to tell a quick story. I, this was several years ago. I, I luckily already had a relationship going with the organization and.

They pulled that pivot on me towards the end where they're like, well, we're going to go out to RFP though. And I thought oh shoot, you know, we already had all the conversations. We've got your, your, your benefits program kind of blueprinted. We know where the KPIs where you're struggling, the things we can improve. But you still want to go out to rfp. Okay. And I remember in the RFP and self funding had come up and this group had grown quite a bit in size and they had a, one of those questions in there of like how would you would manage the funding of their policy and what strategies and healthcare ideas would you bring to help them manage costs? And, and then it had below it in like bold writing. You know, we, we are not interested in self funding and luckily I had a relationship with them so I actually was able to like, you know, unpack that question. And it, and it, it was just because years passed before you had all the software and data analytics and things you have nowadays that can help you make it a better informed decision on whether your population is a good fit for self funding or not. And they had a bad, a bad deal and they had a bunch of high claims and they said we'll never do that again. And that was years ago. But I convinced them to run the data, and the data actually, you know, pointed directly at you're a good fit for self funding. Their population, their demographics had changed. They had young, a younger workforce and you know, ended up winning the business. They've saved hundreds of thousands of dollars. And my point of all that, my point of that story is if they would have just went with that process and not really had any conversations, most brokers just would have saw that and just, you know, wrote it off as not a strategy they're interested in and moved on.

You know, take a, an agency like ssg. You guys are independent. I know you're part of uba. It's where you and I first met was at a UBA conference. Talk about, because there might be some advisors listening in who maybe haven't participated in RFP before, but they, they will in the future. Knowing you guys are an independent agency, what makes it so tough when it, when you think about the questions or the topics or the focus of many RFPs, what makes it so hard for an independent agency to win an rfp, in your opinion?

Well, a lot of times I actually think the outcome is predetermined. And I, I really think that a lot of organizations still believe bigger is better. You know, and I always say, you know, McDonald's makes more hamburgers than anybody else. Right. But I can tell you what, I can get my grill going in the summer and I can make you a lot better. One, I just think they tend to focus on the big box names, brokers that they submit tons of RFPs, I mean they just, they just pop them out and sometimes the smaller privately owned brokers, that will actually take, I think more careful with your group and pay closer attention to little details because we're not beholden to, you know, shareholders and boards and things like that. It allows us to get more creative. We also don't have products that we're pushing that were, you know, agreements were made in the ivory tower somewhere. You know, we kind of can move and shuffle a little quicker with our clients needs. But to answer your question, I just think a lot of groups think bigger is better and a lot of times.

The outcome of the RFP is already predetermined.

No, it's a good point because for the people listening in, again, if you haven't seen one, often the questions are tied to how big are you, how many of us the prospect do you have? Scope of work, resources, capabilities? And I think a lot of the RFPs from the past were probably written by big national consulting houses because it's to their favor. And I do see a lot of companies, you know, this is probably great advice for an organization who's thinking about doing an rfp. Don't just go to the Internet and copy and paste. And I think you see that often too. And the final point to what you were saying is being predetermined. Here's the punchline. I forget what the statistic is, but I thought it was like well over 70% of RFPs end up with the employer staying with the same broker.

Yeah, that's another great point. I mean, man, if you're walking into, if you're getting an RFP invite and it's a long relationship and you just. They're not willing to spend time with you to really unpack their issues.

Man, you, you got to be careful because you're well and.

And again, point of piece of advice for independent agencies, the ones that aren't huge, but do some great things, be careful. I know. I found out public sector was not a good fit for me because whether you're doing a good job or not, they actually have to do an RFP every two to three years. And so if you're going to have them as clients, you're going to constantly play be playing this RFP game.

Yep.

So let's flip it, Noel. Okay, great. We've been bashing, talking about RFPs being really freaking pointless and stay away from them. But sometimes, honestly, there's a reason to participate. Sometimes you are still going to find yourself in within an rfp. Let's talk about how that independent advisor can at least try to put himself or herself in the best position to win with an rfp. If I were that advisor, where should I start? If I'm faced with the fact I have an rfp, what can I do to at least heighten my chances of winning?

Man, I really think the best thing to do is be creative. Outthink your competitors, make your submissions stand out. I talked to an HR director one time. I went in after the RFP process had completed and she showed me a submission from one of the big houses and it was 200 pages in this binder. And she actually just made a joke and she said, I just that one. Boom. I don't have that kind of time. So the point there is keep your RFPS short. Actually keep them short and sweet. Try to stick, tell your story.

The most efficient way possible. You know, show you that, you know, show your differentiators in an easy to read fashion. Like use lots of charts and graphs and colors and things like that. Pictures, case studies. I still do that. I still actually, if I'm working with the group, I provide them with a template to start to try to make their lives easier, give them a template. We've had one crafted for years, pulled from all kinds of different RFPs, the most common questions that they ask. So I like to try to help that organization out by taking that off their plate.

Go there for a second. What if you are a broker who has a client who has to do an RFP where you actually might have a little control of what that RFP looks like because often the client will come to you for help? What kind of questions? Again, knowing that you may not be able to compete on resources and size with some of your competitors, what kind of questions can the broker get the client to really focus on in the RFP that they think is go? The questions that are going to matter.

I really think that pertains to the journey. You know, what kind of support are you giving? What kind of service? What kind of team do you have behind you? You'll see all those questions. Those are very important. You know, how many people are you going to be working with? I see a lot of times, you know, there's a, there's a different person for every little nuance of your plan that you have to consult with. And a lot of organizations still just like that one account manager, they take care of things, come back to you with the answers.

So I, I think those kind of things are important. What is your cost strategy over time look like and how do you implement that? How do you routinely check up on it? You know, do you do a quarterly, bi, monthly, you know, biannually, you know, whatever that looks like. You know, how often are you measuring those KPIs and those, you know, kind of checkpoints that you've created throughout those three years to, you know, keep, keep the organization on the right path? How are you going to curb that cost? Upward cost trend? I think, I think those are really important questions.

And that's also good advice for an employer. If you are going to run an rfp.

Make, focus your questions about results. Don't, don't use an RFP to check the box that, oh, we did an rfp. Look, actually ask the questions that I say, hey, how are you going to drive results for our organization?

Yeah.

And I think honestly, Noel, RFPs, if done right, shouldn't have to be any longer than a page or two. And you get these RFPs that are 20, 30 pages deep of questions. It's like it's Overkill. It is just ask the most effective questions that are going to create the results your organization wants.

Yeah.

And those are the questions you must focus on.

Yep. And the more questions you ask, you know, the bigger the RFP is going to be. The return the. And it's gonna, it's a lot of work. You know, if you could imagine yourself as an HR director, you know, that has decided to accept 6 to 8 RFPs and you know, you're busy enough trying to manage your employees and all the other problem piles that end up on your desk, but to, to take a time out and then have to sift through, you know, 6 to 850 to 100 to 150 page RFP submissions and, and then come up with, you know, whether it, it's a good idea to change brokers based on that. You know, it's, it's very challenging.

Well, and it's, I think it's, you know, a good philosophy I think about as an advisor. When you work with a client and they want to offer a bunch of different medical plans. Right. There comes a point of returns. If you offer too many health plan options, you're creating confusion for your employees. Therefore they're not going to be able to pick any or they're just going to stay right where they're at.

Yep.

And I, you know, when I used to, you know, I was advising him, clients, I said, do not have three, four different plan options. That's too much confusion. So what employees are going to do is just pick the one they've always had. It's the same with RFPs. If you find yourself involved in an RFP and you know, there might be five, six, seven other brokers involved, the larger the number of brokers involved, the larger the chance that group, that group is going to stay with the same broker.

Absolutely. You know, I was thinking another really important thing that's a hot topic right now with the labor shortage going on around the country. I think, you know, 2020 was a rough year with COVID and we're still all dealing with that, but moving into 2021, it's Covid plus this labor shortage. And one thing I think is very important that you address on an RFP is how your benefits are addressing a multi generational workforce. You know, a benefit to a 40 year old that has a family and a spouse is different than something that is, you know, a benefit plan for a 25 year old that is still young and healthy and hasn't been to the doctor in a couple of years and doesn't really, you know, I hate to say they don't really care, but they don't see it as much as a benefit to their employment there as an older employee. So what things are you doing with your benefits to attract a younger workforce and keep them from, you know, jumping around and you know, staying on board as a long term employee? And you can use employee benefits to do that. There's, there's a lot of new programs out there that are pretty cool that pertains like lifestyle benefits, for example.

Well, and your message is loud and clear about, you know, this is why as an employer you can't go to the Internet and copy and paste an old rfp. So much has changed, especially last two years. And like you said, trying to build a benefits plan now when we have four different generations in the workforce is so difficult. So last question about RFPS before we move into a little bit about ssg. I'm going to put you on the spot. You ready?

Okay.

So if I'm an employer who is putting together an RFP or I'm a broker who may be in the position to help my client put an RFP together, what is one question? If you could ask one question and you're that independent advisor, what would be the one question you would put on rfp?

I, I really would go back to some of the things I've already said. You know, I, I, I, I would ask them to lay out a three like how what does a three year strategy look like for you? Like I said, it's, this is not checkers, it's chess. Your healthcare plan cost. You can't address, you know, chronic disease issues and things like that in one year. You have to have a multi year strategy. So what is your, as a broker, what is your multi year strategy? To curb my cost trend. And what do you, and what does that look like for my employees and what does that look like for my organization as my leadership?

That's well said. That's kind of where I was going. You know, I, whenever I saw that question on rfp I got excited because I'm like, cool, at least this could, this is my chance to, to, to show my differentiator what am. I'll lay out that two, that three year strategy for you to show you exactly what result we're going to create for you. The other thing I want to wrap up by saying something you said earlier is get creative. I know some advisors now who are starting to take to video to do their RFPs.

Absolutely.

So instead of turning it in as A Now some RFPs, as stupid as this sounds, require you to turn in a piece of paper, a bounded presentation. But right, you got some flexibility. Get your butt on video and do the RFP that way, talk about what you're going to do for them, answer the questions via video. I think it's super effective. Super effective.

Yeah. And if not even video, just a voiceover type product, you know, go ahead and do the submission, get them what they need. But they also off almost all always. Now they ask for electronic submission too. So maybe just put on your cover head, say hey, this is my submission that you needed the hard copies. But I've also included in my electronic version, you know, a voiceover or a video translation of this RFP walkthrough review of it. And maybe that's a little easier for you these days to, you know.

Awesome.

Yeah.

With a couple minutes we have left, Noel, let's take a. I want to give you a chance to tell us a little bit about Strategic Services Group. I know you guys are headquartered in Detroit, you're in Grand Rapids, but just for the audience out there who may have never heard of the agency before, give us a little background.

Yeah. So you know, one of the nice things about us that we've already mentioned, we're one of the last, I mean there's been so much M and A in our industry that Strategic Services Group is one of the last larger privately owned employee benefits brokers in the state of Michigan. And you know, again, that allows us to be more creative with our clients and their needs and not push products on them that maybe corporate would like us to sell. Our groups, we're also huge on, you know, you'll hear all brokers say this, everybody hates quoting, going to market. Right. But we, and everybody says that because everybody, that's the science behind what we do. It's like an automatic, you know, we're all going to do that. But what we really do is meet with you, blueprint out your employee benefits program, talk to you about, you know, what are the challenges, what's keeping you up at night about your benefits, how do we address those and then how do we take all that discussion and create a three year strategy for your organization to, you know, improve your employee culture, to curb your cost trend, to really get your team on board. You know, I've always said, you know, if your employees don't understand your benefits, it can't be really perceived as a value. Right. If we don't understand something, it's not very valuable. So we do a lot of employee education. We're hands on, we're still boots on the ground and enrollment time and quarterly meetings monthly, whatever you need. We've got a ton of technology.

You know, we've done a lot of work over the last couple years talking with groups that are starting to get into the 100, 200-3- hundreds that are still fully insured and using some of our data analytics and technology to see if actually you're a good fit for self funding now. And we've had a lot of success there. Even if they've had that boogeyman past about self funding, things may have changed and they probably have so.

Well, hey, I, I agree with you there. There is a huge opportunity right now in that 100 to 500 space to do a lot of great things and we just, we need more agencies to. That's why my business exists, Noel, is to help these independent agencies stay independent because M and A activity in this industry is off the charts and we, we need, we need just, we need agencies to stay strong. So I want to thank you for jumping on the broker's voice. I think this information today was super helpful, especially for somebody who hasn't done an RFP before or has done them, but found them to be really frustrating. I think you've given them some golden nuggets to help them at least make it more effective. So just again, want to thank you for your time today.

Thanks for having me on. Ho ho ho. Happy holidays.

Santa delivered today. Santa delivered the gift. So if you're listening in, hey, you remember when clarity and confidence collide, massive action happens. Go make it happen today.