Strong value proposition + clear client match = competitive broker
Jacques Coetzer, General Manager of Sanlam Broker Distribution.
The better the match between a broker’s value proposition and client selection or segmentation, the more competitive he or she will be.
Yet, says Jacques Coetzer, General Manager of Sanlam Broker Distribution, client segmentation is often presented with far more complexity than necessary and simply boils down to selecting with which part of the market you want to do business.
Coetzer says while a well-defined value proposition is a critical success factor in an RDR world, it should be influenced by client segmentation. “A solid value proposition will be one where the core value offering matches that in which 80% of clients in a chosen market are interested.”
To achieve this level of success an independent broker will have to ensure a clear understanding of the category of clients who CAN, in the future, do business with him and the category of client with whom the broker, in future, truly WANTS TO do business.”
Coetzer says a key issue concerns the number of clients whom a broker can realistically service within the framework of a value proposition. This, he argues, will depend on a number of factors including the broker’s resource pool and the complexity of his offer.
“A critical consideration is to ensure that you are able to deliver on expectations, and so a realistic projection is important.”
“When it comes to deciding on who you want to do business with, Coetzer says a key consideration pertains to which category of clients will offer you the best long-term value – not necessarily in a context of profit-making, but also on a more personal level.
“In other words, you will need to balance the value of doing business (based on the profit potential from certain categories of clients) with the effort that will be required.”
Coetzer believes brokers who have clearly established this picture for themselves are likely to have a solid understanding of the critical client segments on which they truly want to focus.
After establishing an understanding of your preferred client base, the next step is to view your value proposition from the perspective of your clients.
Coetzer believes this is different from the process of having developed a value proposition at the outset. The process, here, involves an understanding of the value which your clients see and believe they will receive.
“The value which your clients will receive from you becomes the basis for what they will be prepared to pay for your service. In this context, your value proposition is always the core of your marketing angle and the basis of your branding.”
In an ideal world, he says, an independent broker’s client segmentation will require small tweaks over time.
“For instance, as your client base age, you may have to adapt your proposition to remain relevant to them. Or, if there are fundamental shifts in the competition, you may want to evaluate how optimal and accurate your value proposition is. In other words, this speaks to the extent to which your positioning is able to attract the attention of your clients.”
