How To Have An Effective Benefits Conversation With The C-Suite | Jan 27 2022

Here's the goal, guys. You know, whether you sell, you know, we've got advisors on the call. We've got, you know, Laurie, you're in the stop loss space. Bob, you've been in the pharmacy space. We've got people who come from all different angles of health insurance. But the key is, when we get that chance to talk to a CEO or a cfo.

We can't talk benefit speak. We actually have to talk their world. We have to talk in their language. And so the question becomes, how do we do that? How do we actually have a financial conversation using terms and statistics and numbers that they actually look at every day versus what we want to talk about all the time? Because if there is one thing I can guarantee everybody on this webinar today is there is not a CFO who goes to work every day saying, I want to fix my health insurance.

They've got a lot of other things on their plate. And so we have got to be able to speak in their terms. So I'm going to go over a lot of stuff here in this half hour from how to have a financial conversation, how to show them what benefits is having on, what kind of impact benefits is having on their P and L, which also means you need to understand what a profit and loss statement looks like. I'm going to show you how we can get CFOs to have a little more financial empathy for their employees because. Because that's something they often lack as well. But then I'm also going to take this. Anybody here ever worked with a public company.

Who actually has a stock price? You want to see how you would you like to show a public company how you can actually impact their earnings per share?

You want to get a CFO if you ever get the chance. Some of us won't ever do that in our lifetime. You ever want us talk to a CFO of a publicly traded company and you show them her or him what earnings per share could look like because of what you're doing now? You got their attention.

So here is where we're going to start. And this, this all comes back from. Often I put these webinars on because of problems I have solved and frustrations I have had in my own career. And with a show of hands, how many have had the same frustration I have had where you get the chance to meet with a CFO or CEO and unfortunately, you, like I used to do, puke out insurance language. And then they go, oh, you're here to talk about the health insurance. Yeah, I'm going to bring you down the hallway to our HR team. You're going to go talk to them.

Who'S been there.

Been there, done that, burnt the T shirt. And even if you get the HR team all excited, are they making the final decision?

Not often. And so you spent all this time getting the wrong people amped up, Even if they get amped up, because often they don't. And now you're like, great, I spent all this time and I got booted out of the C suite, per se, and I'm talking to the wrong people. So today I want to show you how. Okay? How when we get that chance, do we stay in the room, have a business conversation with them so we look more like their peer than some another health insurance broker that they know? And so if anybody was on last week's webinar, I drew this. Here's something I want everybody to remember. Every webinar I do from here on out is going to start with this premise. If there is one thing you need to do in your business, whether you're an advisor, you are an industry partner, or who else would be in our industry? Those two, an advisor or an industry partner. You need to have these four things in stone. Number one.

You need to create a community for your prospects. What does that mean? What that means is you need to stop looking at your list of prospects as a list to sell. And you need to figure out how you can bring a ton of value to them like a community. Because if you bring a ton of value to them like a community, what is going to happen is over time, the right prospects are going to start raising their hand.

The second thing you absolutely have to have in stone is a sales process on this, this guy's webinar.

What I mean by a sales process, guys, is if I said, what are the three or four steps? Can everybody hit mute, please, for a sec? What are the three or four steps you walk a prospect through that takes them from an unhappy prospect to a happy client. You gotta have that in stone. By the way, that process should also include.

Some kind of assessment. You need to figure out. You need to have a way to qualify or disqualify people really quickly. Now, I've said this in past webinars. You can qualify companies real quickly, demographically. Wrong location, not big enough. HR only, whatever you can. But what you can't qualify them before you meet them is with psychographics. How do they think? Do they believe what you believe? We're going to talk about that. And then the last piece you must have.

Is what I refer to as the playbook. What's your strategy? What do you do that helps your clients win? So if you think of your sales, your prospecting in these formats, I'm going to build a community that my prospects want to be a part of.

Bring them into my defined sales process that I rinse and repeat, which includes an assessment that I can qualify them or disqualify them. So if they are qualified, they get access to my playbook. If you think like that, I promise sales go up, opportunities with the right people go up, which means your sales go up with less effort, with less opportunities, because you are talking to the right people.

So today I'm gonna get hyper focused right here on the sales process, which is how do you have a conversation, a financial conversation with the C suite? And that often occurs in the first meeting, right? You get a chance to sit down with that CFO or that COO CEO, and you have gotta find a way to make it about a 5 financial conversation, not just a benefit. So how do you do that?

Well, if I get a chance to sit down with a CFO and I do my fact finding, like I hope everybody is doing.

What I want to learn about their business is not carriers deductibles out of pockets. We're actually going to gather some of that and you'll see why I actually want to know information like this.

What is their total sales right now?

What is.

Their total.

Health insurance budget?

Now, guys, a point of advice here.

We're starting to call this the health care budget more and more. But I want us to remember the C suite doesn't think of it as healthcare. They think of it as insurance. So just be careful when you talk healthcare and health insurance. We all know those are two very different things. When you ask them, what is your healthcare budget, you might get some looks like, well, what are you talking about? Keep it simple. What's your health insurance budget?

I also want to know.

What their profit margin is.

Now, again, if you were on this webinar in December, some companies may not want to give you the profit margin. They might want to keep that private. But the good news is, before the meeting, you can actually look that up. You could go to Google and say, hey, okay, I'm meeting with a manufacturing firm today. What is the average profit margin in the manufacturing industry in Georgia? And you're going to get a reasonable good estimate. So at least you can have a number in mind if they're not willing to give it to you.

I also want to Know.

What is the total.

Out of pocket limit on your current health plan? So that I am going to go specific on the health plan. You'll see why.

And then here's the last thing I want to gather in my conversation.

What is the average salary of an employee at your company?

And my handwriting is terrible. What is the average.

Contribution, health insurance contribution from your employees monthly basis? What do they pay?

And what this is doing is setting up ammo for you to tell one hell of a story. Remember that? So when I talked about the assessment just a few minutes ago, these are questions I actually put on my assessment.

Because if they'll, if they give me this information, it allows me to now go to the whiteboard. If there's anybody here meeting live with prospects. Two things, guys. If you are, if you're meeting with prospects live and there's access to a whiteboard, leverage the heck out of the whiteboard. If you're still doing virtual meetings, grab one of these. Because whiteboards are magical, because you are going to draw out the picture they need to see. So if you have this information in your fact finding.

Here'S what it allows you to do. Now let me, let me pause for a second. You might be like, why are we asking this stuff down here? This is benefit related stuff. Let me tell you why.

There's a lot of CFOs, CEOs, and we'll even throw COOs in there who lack a little financial empathy.

What I mean by that is, does anybody know the statistically what the average, how much more the average CFO makes than the average employees? Anybody know what number, what, what multiple that is?

Average CFO makes eight times, somebody said 10x8 times the typical employee at their company. So if this number here, average salary is 50,000, that means on average the CFO is making about 400k.

Is that health plan having as much impact on the CFO as it is that average employee?

And the challenge you often see, and I know, I saw it, was how often does a CFO make a decision about a benefit plan for hundreds of employees based off of their own opinion.

Their own checkbook? Well, I want to see, I want an hsa. Yeah, because you can afford to completely fund it to the max.

But John Smith, your average employee making 50k can't do that.

And so one of the things you have to do a good job and you have to do this well, you can't be a jerk about it, is you have to get that CEO or CFO to understand what kind of impact their decisions are really having on their employees.

So when I am presenting to a C suite team, what I want to show them is let's imagine the average salary is $50,000. Let's imagine the current out of pocket limit for a single employee.

Is $7,000. Plus if I'm on that health insurance plan, I've got to pay $100 a month. So my annual contribution in premium is $1,200.

What I'm going to do next, and I'm going to erase this up here for a second, what I'm going to do next when I am presenting to a team of CEOs and CFOs is I'm going to establish a little empathy which is I want you to see the impact the plan right now, your benefits are having on your average employee. Because if I am one of your average employees, right Now I'm making 50k.

My out of pocket is 7k plus I pay another $1200. So if I max out the plan plan this year.

I'm going to make 80, I'm going to spend $8200 deducted out of pocket plus my premium.

I make 50k a year.

That means.

8200.

Somebody does the math for me. 50k, my health insurance.

Makes up 16% of my gross, take home gross. That's even before taxes.

Sometimes that number gain can be 20, 25%.

But again, the CFO may not be clicking yet because for him or her checkbooks a little different. So what I often did is said listen to show you what that impact looks like.

Mr. CFO, Ms. CFO, you're making 400k a year.

If your health plan was impacting you at that same 16% that it does the average employee.

That's like you having.

A $64,000 out of pocket limit.

How would it feel if your health insurance plan had a $64,000 out of pocket?

It would suck. Exactly. That's what it feels like for your typical employee.

Because they're playing with a much smaller checkbook. So the current health plan may not impact you a whole lot. It is crushing them.

And so that's establishing that financial empathy is so important because again, you got to remember the C suites, making decisions for this entire group of employees, whether they have 50 or 500, but they're often thinking with their checkbook, not the employees.

So now the second thing I want to do, so we've got that established, everybody follow that.

The second thing I want to do.

Is I want to show them what their, what impact their benefits are Having on their profit and loss, their company, the impact it's having on them financially.

Now, I'm going to make this very rudimentary, guys. But if I could encourage you guys to do one thing, if you haven't, is go study a profit and loss statement.

Just like you got to put in the reps when you're an athlete and you've got to do the drills and the practice to get better. Go study profit and loss statements and then literally go in your conference room at your office and practice doing this. This is how you get better. But if you look at the typical profit and loss statement, here's what you're going to see.

You're going to see gross revenue.

Minus. I'll abbreviate cost.

Of goods sold.

And when I subtract cost of goods sold from revenue, I get my gross profit margin.

Then.

I've got to take out what is referred to as SG&A sales general and administration.

And when I subtract that from gross profit, I get operating.

Profit.

Now here's the key.

Inside this bucket right here of SGA is where the health insurance budget lies. Payroll, health insurance budget, everything. And then under operating profit, we take out the interest, the taxes, the depreciation, and before you know it, you get all the way down here and you get to net.

Profit.

This is the world the CFO CEO lives in, not benefits.

So if I want to get their attention.

And I meet with a CFO and I ask them the questions about the annual health insurance budget, the profit margin, the total sales, let's play this out. I want everybody to follow along here. Let's say that CFO told me their current revenue.

Is $50 million.

They told me that their annual health insurance budget, we'll put it right here.

Is 5 million.

And even if they weren't willing to give me their profit margin.

Let'S say they told me.

Oh, can everybody see my board? Somebody said, zoom in on the board, I'll move it closer.

Say, even though they weren't willing to give me my profit, their profit margin, I learned that the net profit margin, the average net profit margin in that industry.

Is 5%.

So we've got $50 million in revenue.

We'Ve got a health insurance budget of $5 million.

And we've got a profit margin of 5%.

And I'm sitting in front of a CFO at renewal time and he or she is looking at a 10% increase to their health insurance budget.

Well, it's a $5 million budget.

That means.

Their health insurance is about to go up.

$500,000.

Did I do that right?

My math is off today. Yes, 500,000.

Who can tell me, all other things being equal, if the health insurance budget goes up 500k, what does? What happens to the bottom line to net profit.

Goes down 500,000.

So if they're watching their net profit now, all things being equal, go down $500,000 because they accepted a $500,000 increase to their insurance.

And they have a net profit margin of 5%. Now, for those who may not be familiar with the calculation, net profit margin is just simply net profit.

Divided by gross total revenue.

So if they're about to watch their net profit go down a half a million dollars.

And they have a 5% profit margin.

Next year.

They have to sell.

An additional $10 million in revenue just to make up for the loss of the health insurance budget.

So what I did there is I took the half million dollar loss to the net profit, divided it by the 5% profit margin.

So next year this company has to sell $10 million more of their widget just to make up for the increase in the health insurance budget.

How fun is that?

Now here's the flip side. This is where you can become the ninja. Lori, I told you, you're going to be a stop loss ninja.

Let's imagine you come back now with a proposal, with a financial analysis. However you come, however you propose to win business and you have some cost containment strategies. You have some things you can do that you believe are going to show them how to save 10%. Maybe it's a pharmacy solution, I don't know. But let's say you go back and you say, listen, we have some strategies. After doing an analysis, looking at your claims, your cost, we think we can actually save you a half million dollars for another 15 minutes.

If I now instead, if I save them a half a million versus them watching their budget go up a half million.

All of a sudden, now.

Their net profit is increasing a half a million dollars, not reducing.

And we don't have to do the math. Again, if I help them improve.

Their budget, their bottom line, by a half million bucks, what happens next year? They're starting the year ahead $10 million with revenue.

So guys, the part, the reason I'm showing you this is with three numbers, total revenue, health insurance budget and net profit margin.

You can draw out their P and L and the impact the health insurance plan is having on their finances within their company. And if there's one thing I can guarantee everybody on this call.

And it's this if you are at the whiteboard, you're in front of these folks and you show them that when their budget goes up.

That you show them the impact it's having on next year's sales, there is not a competitor in your market that is having that conversation.

Now you sound like a business consultant. Now you sound like one of their peers because one, you're making it all about them with their numbers.

But you're having a financial conversation, the kind of conversation they have every single day.

Now, even if you sell stop loss like Lori does, Lori, if you can show savings or you show them how a stop loss increase.

Impacts their bottom line, impacts their sales, you will be having a very different conversation.

Then your stop loss competition is happening. So the point is this. Whether you are a benefit advisor, you sell a solution to the industry, it some way, shape or form involves money, you're either helping reduce cost or you're dealing with people who are dealing with huge increases to cost. And instead of siloing it into the bucket of benefits, if you can show them how that increase or decrease can have a massive impact on their overall profit and loss of the organization.

You will be viewed extremely different than anybody else who's trying to walk in that door.

So that's my advice to you guys today, is with this webinar. One, help your C Suite prospects establish some financial empathy by showing them the impact the current plan is having on the average employee. But to show them how their budget is currently impacting either negatively or positively their profit and loss of the organization.

If you can do that, you're going to get more eyes, more ears open from the C Suite. You're not going to get kicked down the hallway.

And when you come back with your proposal, whatever that proposal is, and again, you show them the opportunities, the savings opportunities, and what that means to their P and L, you're going to have a heck of a lot more C Suite executives saying yes to you.

Hey Andy, quick question. Yes, sir.

Do you send your six questions to CEO CFO in advance of your meeting so they might be prepared? Okay. Nope. That's a great question. I get that a lot. If you've been on past webinars, guys, you've heard me talk about the four questions always ask, what's your goal? What would it mean to achieve it? What's challenging you? And how is that impacting you? These are financial questions that are information you gather when you send it ahead of time. Either they may not answer it correctly, they may not answer it at all. I Always, always urge you to ask these in person.

Because the value in asking these in person is it can lead to follow up questions, it can lead to a conversation. Tom Schweitzel yes, you can actually finally use your accounting degree in benefits. Because guys, if there is two things we do in this industry, it is not puke product, it is math and storytelling. Math and storytelling. If you do those two things, guys, you will write a crop of business crap load of business.

Now does anybody want the advanced degree version of this and how you can show a public company you can actually impact their stock price? Andy? I would also say self serving CFOs are bonus on EBITDA, which boom, you know. Okay Phil, thank you for bringing that up. Guys. If you were to really get deep with a CFO or a CEO and ask them what their number one goal is, what weight, what makes them come to work every day, to Phil's point, selfishly, if they were willing to admit it, it's the performance of the company determines the performance of their bonus. And those things can be large.

So if you're able to show a CFO to your point, Phil, hey, what if we could reduce your bottom line or excuse me, improve your bottom line, get you ahead in sales next year, improve your P and L, you know what that means for the cfo.

And so this is how you have the conversation at a completely different level.

When you think about public companies. This is where the graduate level stuff comes in, guys. When they talk about a stock price of a comp of a company like Tesla, I just looked at $861 a share. Insane.

Every company has an earnings per share. Earnings per share is determined based on profits and the number of outstanding shares. Imagine if you could walk into a public company that's making millions of dollars in revenue, if not a billion plus and you actually could show them how to save 50 million 100 million 250 million on their health care budget.

What does that do? That increases their earnings. That increases their earnings per share, which means their stock price actually goes up. You can literally cause a company's stock price, a public company stock price, to increase with your health insurance strategies.

And again Phil, to your point, if stock price goes up, who's happy shareholders? Who gets a bonus? Cfo? CEO. Guys, remember, it's the game of what is in it for me.

CFOs want to get bonus, CEOs want to get bonus. And if you can show them how your strategies can actually help them accomplish that.

They're locked in. They're listening. You're going to win a lot of business and you're going to stay in front of the decision makers.

What final questions.

Do we have? Wade, great question came up. How do you modify this for nonprofits.

Guys? I think with nonprofits it becomes even more important.

Nonprofits entire revenue model is based on external things that are completely out of their control. They can't just go, this company here, if they wanted to, they could go make more widgets. Right. A nonprofit can't.

A nonprofit is based on grants, donations.

And with a switch of a regulation, we see this in assisted living facilities. The government could say, we're not going to give you any more money or we're going to give you a heck of a lot less money than we used to. So the way the tone of the conversation has got to change a little bit. But guess what? Their need to reduce the bottom line is ultra important because they can't just go make more product. Their product is based on donations and grants.

And if the grants and donations just decide they're not going to give money, they're in a world of trouble.

So this was, I know this is one. Guys, I'm going to do this webinar multiple times over the course of.

This quarter. And next, because this is one you're going to want to hear with repetition. Guys, put the reps in. Like I said, literally go to your whiteboard in your conference room and practice this. Because when you get this kind of presentation down.

This is how you win bigger business than you ever have before. I have one business and I don't mean this to brag. I have one business in one presentation with this.

Because no one's having this conversation with them.

They're no longer saying, oh, you're a health insurance broker. They're saying, what? I've never heard this before. So do yourself a favor, put the reps in. Put the work. If you guys have any questions, I just put my email address in the chat box. If you want to go deeper into this, guys, this is the name of the game. And like I said, I'm going to go back to how I started the webinar. Build the community for your prospects. Have a rock solid rinse and repeat sales process that includes an assessment to qualify or disqualify, which includes these questions. And then come up with a playbook, which is your secret sauce to what you do to turn unhappy prospects into raving fans. You get those four things, you will change the game for your business and your agency. Phil. Last thing there is a balance sheet value prop. Also within Stop Loss. Absolutely.

And that's why, guys, even if you sell Stop Loss, you have pharmacy solutions. You can turn all of this into a financial conversation.

You could literally show how we save money on one drug like Humira and what that impact is going to have on your entire P and L.

This is massive stuff. So you got any questions, email me. Otherwise, guys, I hope this was helpful. This one I'm going to put out as a recording. I recorded it because this is a game changing one. So if you got any questions, hit me up. Otherwise, I'll be back next week with another webinar. But use this to your advantage, guys. No one's doing this.

Good stuff. Thanks, Andy. Awesome, guys. Have a good afternoon. Thank you. Thank you. Stay warm. Yeah.