A client of ours own a successful chain of insurance brokers. It’s a traditional old family business with a good reputation for integrity and fairness, and has grown slowly but steadily over the years. For several years they’ve fought against the trend of doing business on the internet. They believe their excellent service and reputation will see them through.
In a recent conversation about the long-term sustainability of his business, especially when so much insurance is bought online, we asked him if he felt confident that his model will continue to be successful over the next five years.
In response, he rather proudly told us that the type of business he does relies on four basic qualities:
- Excellent reputation
- High quality advice
- Good products
- Easy accessibility
Business basic qualities are enough?
We pointed out that there were many businesses, now closed, whose owners had failed to appreciate the massive power of online trading. They felt that, somehow, because their companies had built up solid reputations and had good products, they could survive on the strengths of their values alone.
We mentioned too that, of the four qualities they cherish, none is exclusively theirs. There are any number of broking firms with knowledgeable advisers, good products and well-earned reputations.
In fact, when you consider the fourth dimension, accessibility, our client is at a distinct disadvantage by not having an online buying platform.
In a final attempt to convince him, we said that if anyone decided to compete with his firm directly, they could simply poach a few of his staff, set up an on-line facility and do business 24/7. His reputation and standing in the community would do nothing more than delay the destruction of his business by a few months.
We’re pleased to say that, after a quick chat with his son and business partner, he saw the light.
Sometimes it takes an outsider to understand the threats that face a business. The lack of an online facility is an obvious weakness but there are many other obvious mistakes businesses make.