A Technology Checklist for Benefit Brokers

The need for benefit brokers to leverage their high-touch value with technology has never been more important. Customers are pulling and competitors like Zenefits are pushing brokers in this direction. Resistance is futile.

This was the message of yesterday’s post, which, like this one, is based on my talk at the California Association of Health Underwriters’ TechSummit in late-September. This second post describes why choosing the right technology is critical and offers a checklist to help benefit brokers find that right technology.

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Shopping for technology can be confusing and frustrating. Having a plan to help you assess your options, however, can minimize the pain.The first step to stress-free (or at least stress-reduced) tech shopping is to know what you’re looking at: a mere device or a whole product? When buying the technology upon which you’ll build and maintain your business, you want a product, not just a device.

Devices versus Whole Products

The problem is it’s sometimes hard to tell one from the other unless you know what to look for.

Geoffrey A. Moore discusses the difference between devices and products in his book Crossing the Chasm (although what I call devices he labels “generic products”). A device is the core hardware or software being sold—and only that core. A product is that device and, in Mr. Moore’s words, “whatever else the customers need in order to achieve their compelling reason to buy.” (Here’s a graphic from my CAHU talk on the difference between devices and products).

Looking at a smartphone? What you hold in your hand is the device. The product is that equipment plus the data plan plus the warranty plus the operating system (e.g., Apple, Android or Windows) plus the apps available plus the cool-looking case and so on. The phone itself is a device; the other elements make it a product.

Most of us lack the expertise to make devices productive. We need products. To make sure the technology you’re contemplating is the complete package ask the vendor questions about their training, service, peripherals, compatibility and so on. And keep asking until you’re satisfied you know what you’re getting.

The Checklist

Once you’ve established you’re buying a product, a checklist can help you sort through important issues. The checklist that follows concentrates on four considerations: choice; cost; confidence; and comfort. With some issues, the “wrong” answer is a deal-breaker. Others simply raise factors you should consider. If, for example, the technology vendor is liable to use your data to steal your clients, I’m thinking “deal-breaker.” Whether it’s critical that the software makes it easy to port your data over to an alternative depends on how difficult and important it is to recreate your database.

Also, remember: no technology is perfect. That’s why manufacturers are constantly issuing updates and new versions. The key is to look for a solid solution, not an unattainable ideal. Remember, the worst technology is the one you need, but don’t use.

Choice:

Technology is just a tool, a means to an end. And it may not always be the means you need. When evaluating tech, ask “Do I need this technology to achieve my goals?” or “Do I need this technology to achieve my goals more quickly and efficiently?” (This assumes you know your goals and what it takes to achieve them. The importance of having a business plan is something I address in detail in Trailblazed: Proven Paths to Sales Success).”  If you can’t articulate how the technology is going to help you take your business where you want to go, then you can probably pass on it.

Probably, but not until you ask “Do my clients need this technology to achieve their goals or to achieve them more quickly and efficiently?” If the product benefits your clients, then it’s invariably worth considering.

Cost:

Technology can be expensive and it always costs much more than the sticker price. There’s also the time it takes to learn to use the product or to teach your clients to use it. Resources may be required to set up and maintain the tools. New hires need to learn how it works. Then there’s the lost productivity as everyone adapts to upgraded versions (just ask anyone transitioning to Windows 10). All of this time, energy and resources add to the true price of the product.

So ask, “Can my clients and I afford the technology?” and “Can we afford to use it?” For example, when buying a printer you need to know how much the machine costs. However, you’ll also want to know the cost of replacement ink. A cheap printer needing costly ink may be a worse deal than a more costly printer using less expensive ink.

Confidence:

More than cash is on the line when adopting technology. You’re also risking your business and reputation. (Of course, not adopting technology poses a risk as well). If that great new software doesn’t perform as promised it’s you and your team who will be distracted, inefficient and, to use the technical term, pissed—none of which will grow your business.

Then there’s security. Your client will blame you if the technology you brought to them releases their personal and financial data into the wild. Any technology you buy must be HIPAA compliant. More, the product needs to keep your and your clients’ data encrypted, safe and secure.

When teaming up with a vendor you need to be confident they won’t use the data you provide them against you. Some HR admin companies started out competing with benefit brokers before deciding to work with them. What’s to stop these companies from reversing course again, but this time armed with your client data? Still other companies offer their products to brokers and compete with them for clients. Really? Is that where you want to entrust your data?

Which means you should ask: “Will the technology perform as promised?” “Will my and my clients’ data be protected?” and “Will they compete with me?”

Comfort

Technology should fit your business, not require you to change what you do in order to use the product. Too many vendors, especially those whose leadership have only technology or investing backgrounds, don’t get this concept.They believe they know what’s best for their customers. They design their product to dominant (they’d say “instruct”), not serve, their customers. Avoid this hubris. It rarely turns out well.

There are risks involved with any technology. No product works perfectly all the time; some just work perfectly more often than others. You need to assess where you are on the adoption curve, which graphs how much risk a user is willing to accept in order to get access to a product. Geoffrey Moore’s book, Crossing the Chasm, explores in detail who is ready to adopt technology and when. (As summarized in this slide describing his adoption curve from my CAHU TechSummit presentation).

For example, Early Adopters embrace the promise of technology and accept the risk inherent in something new. What Mr. Moore labels the “Late Majority” are reluctant to embrace technology until it’s established and proven. Neither position is “right.” And you may be on a different part of the adoption curve for different technologies. What matters is knowing where you are on the curve for the technology you’re looking at. Asking others already using the product about its dependability and usefulness is a good way to assess if you’re ready to embrace it.

Sometimes you don’t realize a product is a bad fit until you’ve used it for a while. Some vendors purposefully make it hard to leave them. This is being “sticky” and Silicon Valley loves sticky. Unless you’re an investor, however, remember that it’s your content, not theirs. If you can’t fire the vendor, be careful about hiring them.

So ask: “Where am I on the adoption curve for this technology?” “What have others experienced?” and “What’s my escape plan?”

A little credit for selflessness here: As disclosed, below, I’m helping bring NextAgency to market. As a new technology we lack a track record. If that’s too risky for you, well, that’s my loss. But I still encourage you to ask these comfort questions.

Checklist:

As noted earlier, not every question is do-or-die nor will any single vendor have perfect answers to each question. However, this checklist will help you narrow the field so you can zero in on the best technology for your business.

Here’s a downloadable version of the Technology Checklist.for Benefit Brokers. I hope you find it useful. And please, leave a comment with any questions you think should be added to the list.

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Full Disclosure: I’m a co-founder of Take 44, Inc. In early 2016 we plan to launch NextAgency, a platform helping benefit brokers leverage technology to deliver their high-touch value. NextAgency also helps brokers level the playing field in competition with Zenefits, Namely and other high-tech disruptors because we believe, on a level field, community-based brokers will win