Schemes pitfall #2: Launching before you’re ready
In the ever-evolving insurance market it is essential that when launching a new scheme, you stand out from the crowd. Nick Rawlings our strategy and innovation director comments on how to avoid common mistakes when getting ready to soar!
In today’s highly competitive general insurance environment, speed to market can be the difference between a roaring scheme success and a disappointing ‘also ran’.
In a race for consumers already tied into an alternative provider, product lifecycles are getting shorter as is the window of opportunity to benefit from a gap in the market.
In such an environment brokers are encouraged to take shortcuts to realise a faster return on their investment. But launching too early can cause significant issues. Here are three we see most often:
- Insufficient demand – This could be for a number of reasons. It may be that there isn’t a consumer need at the heart of the product or it may be because the market doesn’t understand the benefits of the product and therefore has no rationale to buy.
The solution: Make sure the scheme is designed around a consumer need (see schemes pitfall #1) and communicate the product benefits in a simple and straightforward way. Consult a small sample of your target audience to test your sales pitch and check you have your key messages right.
- Insufficient or ineffective marketing – Consumers are not aware that the product exists. The scheme can be the best consumer proposition on the market but if it’s a well-kept secret sales will be slow.
The solution: Don’t follow the ‘build it and they will come’ mantra. Invest in a well-targeted launch and marketing campaign to get your messages across and continue to attract new customers. Campaigns don’t have to be expensive but they do need to be well planned so seek advice if you lack marketing capabilities in your business.
- Inadequate staff training and buy-in – Staff aren’t up to speed on the product and/or lack the knowledge and incentive to promote it to consumers. Clearly, staff must understand what it is they’re selling. If they don’t or the product is hard to sell, they’ll soon stop trying.
The solution: Involve your staff in the development of your scheme to gain their buy-in. Spend time on training so customer-facing staff are fully-informed and have the tools to answer consumer queries. If staff are selling a number of products, let them know where each fits into their priorities.
If you can get your scheme right and still be first then you maybe onto a winner. But don’t panic if you’re beaten to the market by a competitor. It’s a common myth that first movers have an advantage and are more likely to succeed. Shane Snow - author of Smartcuts: How Hackers, Innovators, and Icons Accelerate Success - found that first movers had a 47% failure rate and that “companies that took control of a market after the first movers pioneered them” had only an 8% failure rate.
So called ‘fast followers’ are less often discussed but there are lots of advantages. For example, fast followers can enter a consumer market that is ready to purchase having been warmed up by the first mover (at the first mover’s expense). One well-known example is Amazon. The US firm ‘Book Stacks’ beat Amazon to become the world’s first online book store by two years. Amazon learnt from Books Stacks and perfected the online formula. While Amazon has gone on to dominate the western digital marketplace, how many people have heard of Book Stacks? The moral of the tale is that it’s better to be late to market and right than premature.