This post is part of a series sponsored by AgentSync.
Digital transformation is taking the insurance industry by storm as many agencies, carriers, and MGAs/MGUs are revising their manual processes in favor of modern, automated solutions. When it comes to the development of technology, the insurance organization cooperates with the news. The last thing business leaders want is to spend a lot of time, money, and resources implementing a solution only to fail to deliver value.
The right technology partner will support you and contribute to your success in all phases of your business. The wrong partner will cost you more than it should and leave you feeling more accomplished than a true partner. Fixing legacy technology (or replacing your current imperfect solution) can have a positive impact on all aspects of your business, but the process isn't easy. To find a partner that will truly power your growth, start by nailing your RFP process.
Conducting an insurance compliance broker RFP
An RFP, or request for proposal, is a method often used by businesses to compare vendors before deciding which partner to work with. The process involves sending inquiries to a short list of vendors who may find more insight into their solution and whether or not it can address the organization's pain points. Not all compliance solutions are the same, so a proactive RFP can help you decide which vendor is right for you.
Although conducting an RFP can be difficult, there are things you can do to set yourself up for success and make sure you get the information you need to make the right decision.
To make the process as smooth as possible and avoid repeating it again in the near future, know these five common obstacles to successful RFPs and how to overcome them:
1. Doing inadequate market research
Typically, companies will begin their procurement process by creating a shortlist of vendors to whom they will send an RFP. This short list should include the top three to five vendors most closely aligned with your compliance management needs.
Determining who makes the shortlist is an important first step in finding a long-term compliance partner. Businesses may enter the RFP process already knowing one or two vendors they want to consider, but neglecting to do any further research can reduce your chances of finding the best partner for your business. The people in charge of choosing who makes the shortlist may have a bias towards a particular solution, but that doesn't mean they should neglect to look at any other options.
On the flipside, it's inviting all of them A potential vendor in the market to participate in your RFP is never a good idea, either. The more RFPs you send, the less time we have to thoroughly evaluate each response. It would be a huge waste of everyone's time to send an RFP to every single vendor in the market.
Doing enough market research can help you find three to five vendors who are most likely to meet your unique business needs. Researching who you would like to invite to the program reduces the effort required downstream and increases the chances of getting quality responses.
2. Asking the wrong questions
Uncovering the true value of a solution is impossible if you don't ask the right questions. Technical salespeople are not thinking students. If you are looking for specific information, you need to make sure that the questions you ask are detailed enough to uncover the information you are looking for.
For example, when it comes to pricing questions, you don't want to just ask how much the solution costs. Instead, ask about the total cost of ownership of the solution. That way, vendors won't be able to leave out any extra fees they charge for things like data pulls or custom reports and you won't be surprised when you get your first invoice. For more specific examples of questions to ask your insurance compliance vendor RFP, check out our free industry resource: 10 Questions NOT to Ask Your Insurance Compliance Vendor RFP (And What You Should Ask Instead).
Using the information you gathered from your internal interviews and market research, divide your RFP into different sections, each with its own subset of questions. Categories may include:
- The price
- Common business questions
- Product performance
- Security
- Competitive data
- Customer support
At each stage, ask a mix of closed and open questions to allow the salesperson to provide a significant amount of information without diagnosing you with information. Including a few simple yes/no questions in each section helps you find answers easily.
3. Asking too many questions
Just as you don't want to spend time vetting too many vendors, you also don't want to ask too many questions in your RFP. Remember, the more questions you ask, the more answers you will need. While it may be tempting to ask as many questions as possible right off the bat, your RFP should be reserved for more high-value questions.
You will always have the opportunity to dig into the details later in the vendor selection process. For example, the test demo phase may be a better time to ask more detailed and specific questions about the solution's features and functionality.
4. Relying only on information provided by the seller
Whether it's intentional or not, seller responses contain some level of bias. It's easy to get caught up in all the promises a salesperson makes, but how do you know they'll actually deliver on those promises once you sign the contract?
You can supplement the information you receive from the seller with information from third-party sources. This may include reaching out to people in your network who have experience working with the vendor, reading reviews on popular software review websites like G2, reading customer studies, and asking the vendor for customer references.
Neglecting to do any external research and relying only on what the salesperson tells you about their product and service may leave you with a distorted view of the true value of the solution.
5. You have already selected it and continue the process
We've mentioned before that some businesses go into an RFP with two to three vendors already, but sometimes it goes further. Organizations that go into the RFP process with their minds already made up about who they will choose are doing it themselves and the vendors that are screening for ineligibility.
Not taking the RFP process seriously wastes vendors' time, money, and resources, as well as yours. Yes, that's right think you know who you want to partner with, but that doesn't mean you shouldn't go into the RFP process with an open mind. You may find that the solution you're sure is the best fit can't provide the level of reporting you want, or that its manufacturer's data is only accurate about half the time.
Compliance is an important goal for insurance carriers and agencies
Compliance is an important part of any insurance company's operations and choosing who to work with is a decision that should not be taken lightly. Whether you're ready to begin the selection process for the first time, or you're unhappy with your current vendor and ready to explore potential replacements, conducting an RFP is in your future, so set yourself up for success by avoiding these common pitfalls. .
For specific help and sample questions, download our guide today.
And if you haven't already, consider adding AgentSync to your list of potential compliance technology vendors. We equip insurance organizations across the country with seamless, automated solutions for their unique compliance needs. Also, our team of experts is dedicated to providing excellent customer service from testing to implementation and beyond. To learn more, watch our demo today.
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