Using Tech to Compete with Larger Firms

Agency mergers & acquisitions are at an all-time high: In 2015, OPTIS Partners reports 451 transactions in the U.S. and Canada.

This high-consolidation atmosphere puts an enormous amount of pressure on small to midsize independent insurance agencies to join a cluster or sell to larger firms. Granted, joining forces is appealing to many agency owners for good reason—there are plenty of circumstances in which taking this route has its advantages.

But from an agency operational perspective, larger firms have been slow to make progress with innovation and system processes—and therein lies the opportunity for small independent agencies to succeed on their own terms.

It’s important for agency owners to analyze and focus on their strengths. For most small independent agencies, that means speed and adaptability. Today’s technology gives smaller firms the ability to scale quickly with minimal resources, which has greatly leveled the playing field between small and large agencies.

The new agency owner can now carve out market share from larger firms by efficiently using technology to target their ideal client. After acquiring a prospect, the agency owner already has the operational systems in place to properly service their growing book of business.

Here are a few ways small agencies can use the latest tech to compete with large firms:

1) Head to the cloud. With the popular cloud-based subscription model most technology vendors now use, the upfront capital investment for an agency is minimal. What used to require a $10,000 in-house computer server may now cost as little as $150 per user from the start. Implementing a cloud-based agency management system and customer relationship management solution, such as sales automation, is foundational to your success.

2) Get social. It’s important to reverse engineer the attention of your ideal client. Prospects need to see your agency when they’re walking around looking at their phones. The capabilities of Facebook target marketing are impressive and still underpriced. Take advantage of this while you can to carve out your market share.

3) Outsource. Always look to partner with capable vendors that can add value to your clients. This is vital when competing with larger firms that can afford to maintain these services in house. If you don’t have the resources to hire, contract it.

Corbin T. Jackson is founder & CEO of Corefira Group in Oklahoma City and founding chair of the Young Risk Professionals of Oklahoma, a group of young professionals in risk management and insurance focused on networking, mentoring and education efforts.