TCOR Requires Real Data

Somewhere along the line, brokers got the idea that Total Cost of Risk is a sales concept.  ‘We want to help you reduce your Total Cost of Risk,’ they crow. ‘We strongly believe in the TCOR methodology and the TCOR approach,’ they all say. Yet, when you ask these same champions of TCOR what it actually means, how they prove it and what the results are for clients… you hear crickets. When the chirping stops and the trained words are spouted, the answer is very clear: They just don’t know what it actually means, they can’t prove it, and they can’t translate it to clients. They don’t understand TCOR Requires Real Data. ‘Now listen,’ some will say, ‘we have spent a lot of money working on our specialized presentations that show a buyer their TCOR. We really do understand Total Cost of Risk.’ Of course you do. Many have spent a great deal of money branding their limited understanding of Total Cost of Risk, but it is mostly fluff that has no quantifiable result. So, when they run into a broker who not only understands TCOR but can actually quantify it, their world turns upside down. Years of branding and sales training goes right down the drain. Imagine two brokers competing for the same account, both espousing the virtues of Total Cost of Risk. Broker A simply has the language, with no way of proving anything. Broker B can actually demonstrate how they have or will reduce the buyer’s cost structure using real data. Can you hear the crickets when the buyer asks Broker A about their quantifiable impact? Who do you think is actually going to win the account?

How to Compete and Win with TCOR

So, if you or your firm is holding up the TCOR banner as your committed way of doing business, you better think twice before uttering an acronym that you can’t actually deliver on. Here is what you need to do:

• Provide a prospect or client with a TCOR report that not only shows their complete TCOR, but also shows what your quantifiable impact will be (or has been.) If you can’t do that, it’s just a sales trick.
• Demonstrate to your client how you have improved their TCOR without referring to the price of the insurance or risk financing. That is just one small part.
• Know the real impact of your services and resource deliverables. They are not VALUE added, they are the value.  What is it that value?
• Translate your TCOR impact to the buyer in improved EBITDA, margins, or shareholder valuations.

Unfortunately, there will always be brokers and firms who claim to understand TCOR and how to impact a buyer’s TCOR. That is great for them. But when an astute buyer actually tests them on their results, they have it rough. When the buyer asks them the tough questions, the silence is deafening. Except for the crickets!