Four steps to create a successful GTM strategy
How do you know when to bring your new ancillary insurance product to the market?
If you’ve 1. done your homework, and you’re confident there’s a need your organization can either fill or enhance, and 2. built, bought, partnered—or a combination of all three—to solve for this need, then it’s go time!
This piece, which complements our recent webinar, How to Create a Winning Go-to Market Strategy for Ancillary Products, outlines our four-step go-to-market, or GTM, strategy in detail:
- Identifying your prospects
- Reaching and engaging them with your value proposition
- Converting them to your customer
- Evaluating your results
Go-to-Market Strategy Framework
Source: Complete Go-To-Market (GTM) Strategy Framework with Examples (July 12, 2024)
Step 1. Identifying your prospects
The go-to-market process starts with understanding your organization’s current (and future) business makeup: penetration, finances, close ratios, retention rates, and your and your competitors’ strengths and weaknesses are all things that will help you to figure out which prospects to focus on. Drilling down deeper, here are five specific groups you’ll want to explore when building your prospect list:
- New and Existing Business: Even though this is a new business play, your existing block of business is where you’ll be getting most of your activity. Just keep in mind that the team that controls this business may not currently have the skill set or motivation to implement your strategy.
- Small-to-Mid-Sized Employers: While we all want to sell to the large, brand-name accounts, they have longer time frames and a lot more competition. Small-to-mid-sized employers will likely be the ones to purchase your product. Since they tend to be more transactional and quicker to leave, adding more products to this segment will increase your retention rates.
- “Friendly” and Underserved Brokers: If you work with brokers and consultants, you’ll want to start with those who have been good business partners in the past, along with those who may not be as well known and may appreciate the opportunity.
- Repeat Purchasers: It goes without saying that if someone’s bought other things from you, like medical and dental, they’re more likely to buy new things from you in the future.
- Customers with a Problem: Think about the customers who’ve expressed a concern, and make your product the solution. For example, if you’ve heard from employers that high deductibles are really becoming a problem for their employees, your voluntary or worksite product could be just what they need.
Step 2. Reaching and Engaging Them with Your Value Proposition
Beyond needing a fundamental understanding of your accounts, you also need to understand how your organization’s marketing and sales process works. Take a look at:
- New sales
- Renewals
- Underwriting
- Broker and consultant involvement
- What’s in it for your sales teams
- How forecast and quota development takes place
- Compensation strategy
Give some thought to timing, too. Do you want to start with your January business? While everyone has the most business in January, customers often don’t have a lot of time for something brand new. They’re looking for something more proven.
Here are a few more things to keep in mind:
- Marketing is important, but it’s your sales teams that will ultimately determine your success. Most people don’t know the name of their life or disability carrier–they just want to get their benefits when they need them—so sales will really be driving your go-to-market strategy. Plus, not all ancillary products require significant marketing efforts. For example, products that don’t necessarily involve a great deal of consumer interaction, like life and disability, should be last on your list for marketing resources.
- Cross-selling is going to be a new concept to a number of your sales and account team members. You’re going to lean heavily on those teams to cross-sell new products and services into their accounts–that may be a new skill for some, so it’s going to take time to make them comfortable.
- Including the right motivations for everyone in the distribution process is a necessity. There may be things that you’re going to have to require of your sales teams in order to make this happen, so think through what you’ll need to offer, such as compensation or licensing. Also, remember that sales people do what’s measured. So if you’re not serious about measures and metrics, they won’t be.
- A clear and compelling “what’s in it for me” needs to be front and center for the customer. Don’t leave it up to your broker and consultant partners to explain–there are millions of other things individuals would rather buy other than insurance, and it’s up to us to show them the value.
Step 3. Converting Them to Your Customer
Now it’s time to onboard these new customers, or members. Understanding your and your partner’s current operational processes–such as those around paper vs. electronic enrollment and billing–needs to be a priority, even if they’re already a partner. There’s a difference between a core medical onboarding process and certain ancillary products’ processes.
Being able to adapt to your customers’ preferred approach for both onboarding and ongoing interactions will validate their choice to move to you–while getting it wrong could set you up for a rocky relationship. So you’re going to want to spend some time on:
- Clearly defining roles and responsibilities: Who does what and how it’s done is something you’ll need to sort out.
- Accommodating multiple on-boarding (group and member) options: Each partner will have different needs based on their business, workforce and other considerations–don’t assume it’s the same as medical.
- Reconciling the first bill and delivering policy documents: While this may seem trivial, it’s your new customer’s first real interaction with you–it’s a good indication if they made the right decision or not.
- On-going account and member interactions: A clear delineation and explanation of how future interactions are going to work is an absolute must for you and your partner, in order to avoid unnecessary account and member friction points.
Step 4: Evaluating Your Results
Don’t skip this part of the go-to-market strategy process–if everything doesn’t happen the way I just described it to happen, you’ve got to figure out how to make on- the-fly changes.
If your organization is new to cross-selling ancillary insurance products, you’ll need to educate everyone on what to expect. Setting expectations around profitability, time to break even, ROI, sales and retention impacts, among other indicators, should have been part of the decision to roll out an ancillary strategy. For example, ancillary product premiums are small in comparison to medical, so you likely won’t break even the first year.
Here are a few considerations in determining your success:
- ROI requires an investment. Applying resources to the areas that are going to generate the best results should be a priority. And if your organization expects a return with no investment, you need to remind them what ROI means.
- Your investment dollars should be focused on value-added items and activities. Resources are always tight, so you need to spend your dollars on your “need to haves”–like dedicated partner resources–and not on your “nice to haves”–like a dedicated FTE.
- Your close ratio will vary depending on these items and activities. Your close ratio could be more or less than the industry standard, depending on how you spend your dollars on your roll-out strategy.
- Your results need to be positively linked to your partner(s) results. If you’re working with a partner, it has to be a “win-win.” A strategy that disadvantages either you or your partner will limit your success and eventually lead to a break up.
If you’d like to learn more about creating a successful go-to-market strategy and, in particular, how to evaluate results and make the appropriate adjustments watch our free webinar: Creating a Successful Go to Market Strategy.
If you need specific help with your ancillary strategy, please reach out to me directly at: rich@sevenhillsconsulting.us.
