Topic: SALES & MARKETING

In the early days of the PEO industry, a PEO salesperson only had to submit a census of employee and payroll data, workers’ compensation codes and health plan participation to get a proposal/pricing. There was no underwriting or scrutiny of the prospect’s information, no credit check, no comparisons. Consequently, due to a failure to manage risk, some PEOs went out of business or lost their workers’ compensation insurance or health insurance plans. The PEO industry’s reputation took a hit in some markets.

Looking at this month’s PEO Index, it appears at first glance that gross domestic product (GDP) is taking off and the PEO Index is lagging. However, the unique employment environment of today belies first impressions. 

The prospecting your team does today often doesn’t result in closed business for several weeks or months. How do you keep a prospect engaged for an extended sales cycle? How do you keep your qualified leads from going into a “black hole?”    Longer sales cycles and shortened attention spans are often deal-breakers, but lead nurturing gives you an advantage when it comes to converting prospects and building trust. 

I mentioned in a previous writing that NAPEO’s Board of Directors adopted the largest budget in terms of legislative affairs and marketing/communications in the history of the organization for 2022. With that budget, the association made clear that establishing effective, influential relationships on Capitol Hill and spreading the news about the value of PEO services are our primary objectives this year.

The PEO sale is a complex sale. To be successful at selling PEO, salespeople should have a real-world understanding of human resources practices, from hiring to retiring and all the drama in between. They should be knowledgeable about: • Employment regulations; • Workers’ compensation and regulations; • Risk management; • Employee benefits, administration, and regulations; • Payroll, payroll forms, payroll taxes, and regulations; • Time and attendance systems; and  • HR technology. 

Many regional PEOs are strategically modeled to be local providers, offering high-touch service to clients they can visit in person and really get to know. Depending on location, sometimes that might include a couple of surrounding states, but most clients have traditionally been in the same home state as the PEO. 

What is a PEO’s value proposition to its clients? One may be tempted to answer this question by listing a PEO’s service and product offering. However, the service and product offering are not the value proposition of a PEO. The value proposition of a PEO is the material impact the PEO has on its clients. The PEO’s product and service suite serve as the framework to drive the value proposition. The execution of the product and service suite through the PEO’s staff is the delivery method of said value.

The pandemic forced a lot of changes. Gone are the days of opening night for blockbuster movies at the theater, frequent in-person meetings, and late-night, large-party dining. Nearly every restaurant now has an app and offers curbside. Zoom fatigue is real, and people are looking for alternatives such as Volley. Movie releases can now be seen at home on apps such as Disney+ and HBO. Safe to say our industry has also seen its fair share of shake-ups and changes.

Traditionally, many PEOs have relied on their sales teams to generate leads and build sales pipelines to support company revenue growth objectives. Many organizations are finding that this model isn’t sustainable in this challenging post-COVID business environment. The sales team’s prospecting efforts are yielding fewer and fewer meetings with new prospects. This results in fewer proposals being presented, fewer deals closed, and ultimately, anemic (or even flat) revenue growth.