Many business owners do not realize that their Experience Modification Rate (EMR) safety rating can be a powerful marketing tool. In industries where the competition is stiff, business owners are always looking for the upper hand to increase their bid: award ratio. It is not uncommon to have a business owner try and undercut a competitor’s offer. That is not always the best plan, as it will eventually cut too much into the business’s profit. The better option is to find a place where your business has more success and market that to the prospective client.
As a small business owner or marketing manager, you are always looking for that differentiator that separates you from the competition. Whether it is an award for being one of the companies to be listed three times on the INC 5000 fastest growing companies or a certification from a safety company like U/L, it is essential to share your company’s wins. By your company having those awards and credentials, it provides you with small differentiators that can influence a client when they are comparing you to a competitor. A safe company has another internal certification that can be just as important as the external certifications, and that is the companies EMR.
What is an EMR?
Insurance companies and OSHA use a measurement called EMR or Experience Modification Rating to rate their clients based on the number and severity of an injury to an employee. These ratings are number-based, with 1.0 being the average for a company in an industry.
Ok, our company has an EMR Rating, how can that differentiate our company from our competitors.
The EMR tells the insurance company how your company is doing compared to all the other companies in your industry. If you are rated:
- a 0.8 EMR rating means that your company is performing its duties in a very safe environment in your industry, and you should be paying lower rates.
- A 1.0 EMR rating means that your company is performing average in safety in your industry.
- A 1.2 EMR rating means you can pay an additional 20% over a standard premium and that your workplace is a less safe work environment.
The rating is part of a system that your insurance company uses to charge you for insurance coverage for on the job accidents by your employees.
The other major part of your insurance charge is the type of industry. A steel mill worker will have a different higher incident rating over a receptionist. These combine with other environmental factors determine what you pay for insurance.
So you have an excellent rating, everyone gets up and cheers, the safety manager continues to go out and change the number of days without a lost-time accident by plus one along with the company historical record of consecutive days 1,863. Then everyone gets back to work and figure out how to be better next year.
We are back to that great marketing manager and how he can include this information on the company’s brochures and train the salespeople on the EMR talking points when in conversation with the client’s buyer or senior management.
Here are some idea starters for your company’s marketing package each focusing on the strength of your companies safety record;
- When you are in an industry that has few accidents and even fewer differentiators use the record of consecutive days without a lost-time accident and or your current record. Add the rating to your document with your U/L and industry credentials as a differentiator from the competition.
- IF your EMR is a high number, put it on your sales literature and have your salesperson educated on what it means. A well-aware buyer will consider this, similar to a U/L listing or an award.
- List your EMR position. If there are 100 companies in your industry and you and ten others have no incidents, you can list that you are in the top 10% in the industry or that your company has the highest rating awarded by Osha and the insurance industry.
Generally, a buyer or an accountant is aware of the EMR rating, as they have to shop around for the insurance and pay for it.
If they are not aware, tell them about it and tell them how they can help to improve their rating by working with their insurer. The insurers, generally, use some of their proceeds to help improve overall industry rating, which also helps their clients improve, they do this by making services and trainers available to the client, mostly at no charge. These speakers and demonstrators will come and help your company to raise their employee’s awareness and assist them in improving their safety rating.
Your company will become more profitable when both the safety and marketing teams work together. Your marketing team will be able to help your salespeople relay the information that you have the accreditation needed once the safety team helps your company earn a lower score. By marketing your rating, you will likely help your company win more of the jobs you are bidding for, increasing revenue, while also decreasing an insurance expense
In closing, safety is a great tool to communicate to the world, mainly your clients, on how well your company is performing. It is a confidence builder, that you are not passing on the cost of poor safety to them and gives the impression your product may have fewer problems because your employees are aware and care.
And if your company’s story is not great yet, tell your safety director about the insurer’s program. You will both be doing a service to your company!
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:
