I learned an important lesson during my years working for payroll companies, which is that B2B firms can really benefit from partnering together to offer a greater range of solutions to their shared clients. When I made the move a few years ago to the retirement industry, it was natural for me to want to help retirement and Human Capital Management (HCM) companies form partnerships.
I’ll discuss three big reasons these partnerships are so valuable to HCM businesses.
Reason 1: It helps them compete.
In my experience, HCM companies want to be a complete solution for their clients, and offer them a full range of the services they need. Bundling various products together and selling them under one brand creates value that is enticing to potential clients. Businesses, especially small ones, usually prefer to deal with just one company, and these partnerships make that possible.
This is especially useful for smaller payroll providers, since it can be tough to compete with the big boys like Paychex and ADP. It’s even more valuable if the retirement provider can integrate with the payroll software, because it creates a seamless experience for the client. This extended product offering can be presented during the sales process. It gives the client all the same benefits they would get with a bigger provider, often with better service and pricing.
Reason 2: It increases revenue.
One big advantage these partnerships provide HCM companies is the ability to offer their clients cost savings without discounting their own services. When you look at the total cost of payroll and 401(k) combined, an affordable retirement partner can offer them a lower total cost without the need for also lowering the payroll pricing.
Factor in tax credits for starting new retirement plans and the savings increase even more. SECURE Act 2.0 gives business owners that start a new 401(k) plan thousands of dollars in credits, essentially covering the full cost of their plan for three years. Mention these credits on a proposal to add context for the prospect.
Many retirement partners offer revenue sharing, spiffs and bonuses for salespeople, and other incentives that help bring additional revenue to an HCM team. Retirement partners want sales teams to be happy, and to create a beneficial environment for everyone involved.
This provides HCM salespeople the flexibility to find cost savings in several different ways, so that reducing the price of their own product isn’t the only option. I’ve found that when I’m able to connect with the prospect myself, I can serve as an unbiased third party, helping them determine their true needs, and uncovering pertinent details that help us tailor their proposal to their circumstances.
Reason 3: It keeps them in their lane.
You don’t have to be a retirement expert to offer your client a really great retirement plan. When HCM companies partner with a 401(k) provider like 401GO, they can stick to what they do best, and let the retirement partner be the expert in that area. The client still gets great products and service without needing to add a new arm to your company.
Ready to partner?
If a partnership with 401GO makes sense for you, our team is happy to help. A short conversation may be all you need to form a relationship that brings a lot of added benefit to your clients and prospects.
