By Mark Malis of QQSolutions
When a tech company chooses to enter a market, it’s usually because it sees an opportunity to do things differently. Rather than view this as a competitive threat, small businesses can embrace the entry as a motivator to reinvent and revitalize existing operations. By strategically investing in technology instead of fighting the behemoths, smaller players can retain their corner of the market and thrive against a larger competitor. In essence, fight fire with fire.
(Photo courtesy of Mark Malis)
One industry this technological disruption has been increasingly apparent in is insurance. According to the recent survey released last year by analyst firm Aite Group, “How Independent P&C Insurance Agencies Are Thriving in Today’s Competitive Marketplace,” these new market threats have decreased industry optimism by 53 percent since 2014. However, as a direct response, according to the same survey 33 percent of small agencies have increased their IT budgets in the past year. Here’s where they are spending their IT dollars and why:
- Mobile. According to Boston Consulting Group, 14.6 percent of all U.S. Internet traffic now comes from smartphone users. Simply having a website is not enough anymore – if you don’t optimize for mobile audiences, it is possible that you are missing out on a new customer every 53 days.
- Self-Service. Today’s customers want and expect personalized experiences. The only way to do that at scale is through technology. As proof, nearly half of all agencies that report fast growth (47 percent) have deployed advanced customer self-service capabilities such as chat and video conferencing on their websites.
- Social Media. This is where small businesses can really shine. A key value-add for any small business is providing the personal service and attention that big companies simply cannot. Today, relationship building comes in the form of social media. According to a 2015 Shareaholic report, social media has surpassed organic search as the No. 1 source of website referral traffic. Create a Facebook page or start a blog on your website to encourage conversation and connect with the customers in your community.
There’s no doubting that IT will continue to drive business change in 2016, and large businesses will use their expansive resources to increase their market share. What’s the key lessons other small business owners can learn from insurance agents currently facing disruption?
- Improve Customer Service. According to global research company Echo, 58 percent of customers are willing to spend more on companies that provide excellent customer service. Use technology to improve client service and become known as the business that invests in its customers. The investment will pay for itself.
- Make Your Mark. If a large competitor is taking over one aspect of small business, excel in another. For smaller agents, becoming a leader in at least one line of business, i.e. being known as the “mobile home insurance guy,” is an important way to differentiate. What can you do to make your mark in the industry?
- Listen to the competition. Make note of what worked and what didn’t from larger competitors and apply those lessons. What customers don’t reveal, the market will, through competitive activity. You can bet that Android and Google track every iPhone user complaint and then use that information to guide their software updates. Use social media to listen to what customers are saying about a rival and capitalize on that sentiment.
Large tech companies have already proven they have the resources to enter a diverse range of industries. When it happens — whether it be retail, publishing, insurance, or any other trade, remember to fight the fire with fire. Technology evens the playing field, and it is anyone’s game to win.
Mark Malis is the president of QQSolutions, a division of Vertafore. He has more than 25 years of experience in the insurance and software industries, including working as an agent for an insurance agency.
The views, opinions and positions expressed within this guest post are those of the author alone and do not represent those of Small Business Pulse. The accuracy, completeness and validity of any statements made within this article are verified solely by the author.