Can independent agents compete in the nonstandard auto market? The big boys are better organized, financed and dominating the byways. They also are not creating a level playing field.
More often than not, large insurers are able to sell products directly to customers at discounted rates. They understand how profitable the nonstandard and standard automobile market can be, especially in California, despite its regulatory uncertainties and challenges.
Competition, however, does not mean your business will be driven out of the market. There are a lot of marbles at stake. And competition can bring out the genius in real players.
Following are tips on how to get your commercial business moving.
Winning California
California is notorious for perils and pitfalls, with its politically correct environment that seems to favor a retreat from constitutional democracy, good, old, hard work, and capitalism at its finest. There are many pluses and minuses for small business owners in California.
Despite regulations of every kind and description on every possible subject relating to small business, it is possible to compete and live the American dream in nonstandard auto.
Why?
The demand in California is big.
When people pick up a phone book, or go on the Internet for that matter, insurance is in the top 10 to 12 of all searches. Seventy percent of the time, those people are looking for auto insurance.
Automobile insurance is mandated by law and intrinsic to every finance and lease transaction. The need for automobile insurance is simply overwhelming, and demand grows every day.
Big players, like big tractor trailers, cannot get in and cover the territories that smaller, independent insurance agents can in their little mini coupes. Larger companies are slower to react, and cannot turn quickly to avert a disaster. Make quick, personalized service your selling point.
Your advantage
Target marketing, “personal touch” service and real care for the client — all of which you as a smaller player can provide — are keys to successfully competing against the big boys. Being smart about who you get in the driver seat with also is a good idea.
There are a lot of people selling commercial policies. That’s nothing to worry about. Make them your bird dog. Brokers need to learn how to charge fees to their clients. And, agents should learn to cover their bases.
Especially for independent agents, there is no one to cover for you if something goes wrong. Nevertheless, half of the time, the client cannot distinguish between the broker, agent or carrier. All they see and know is you. So your relationship with the customer can make or break your business.
When something goes wrong, take responsibility and remedy the problem quickly. Ensure your clients re happy with your service at every step along the way. You must nurture that relationship.
Cover your bases
You may have heard “protect the little guy” slogans. As a little guy, it would be wise to get smart and protect yourself. There are all kinds of opportunities, but money has no soul, and many that pursue money and power have no souls as well.
Some people will do anything to make a buck. Those people have no personal integrity. If they have never built anything or broken a sweat, what respect will they have for the hard work of others?
When something does go wrong, as inevitably it will, you should have a good attorney within your grasp to help fight off ambulance chasers who make their living off the misfortune of others. Such people are akin to those who short the market. It is better to follow the law — not the truth, what is right, justice or any of that.
Simultaneously, be wary of those that prey on the successful, because they will line up to take what little your successful business has. If your business is to survive, do not rely on promises from others. People who say they will help your business in exchange for something else are not ethical individuals. Misguided freebies are not an answer.
You can compete
The power to compete in nonstsandard auto relies on being vigilant, getting educated and not taking any client or business for granted.
Remember to market your business. Successful methods of creating your slice of the market need to be first and foremost in your thoughts. Then, once your marketing has helped to successfully attract business, “protect what you’ve got.”
If budgets are tight, focus on your background or special skills, and tap into the places the big carriers cannot get into. Broadcast your communications into the community. Align yourself with others that have the most in common or to gain from an association or strategic relationship.
For example, you can use your social connections and associations to help deliver a superior product and service at all times. Personalize your service — the public is starved for good service.
Making yourself or your business a household word doesn’t happen simply by chance. As an independent carrier, you must develop relationships with customers to your advantage. Work smarter and harder — there’s nothing wrong with that.
Richard Acunto is the founder and CEO of Survival Insurance Brokerage, Guardian General Insurance Services, as well as a number of other insurance-related entities.
Topics California Agencies Personal Auto
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