Whether it's general products or market-specific forms, ingenuity is the best policy.
Even in a conservative marketplace, setting yourself apart from the crowd is critical for success.
Case in point: More than a dozen years ago Hart Information Services in Austin, Texas, wanted to penetrate the insurance market on a national level. "We were latecomers to the national marketplace," said Sherrell Kidd, vice president, "and our chances of penetrating it weren't great. In most cases, the insurance industry is very conservative, and if these companies are being provided services through a reliable and dependable vendor, they're slow to change."
Adding to the problem was a large national competitor already providing print services of the same variety that Hart had been doing in Texas.
The solution? Hart charged full-bore into the e-form template business. "It made us different from those suppliers who couldn't see the benefit of converting a $30,000 a year print customer into a $5,000 a year electronic forms customer," said Kidd, "but we had nothing to lose, and it has proved to be the backbone of our insurance market venture outside of the state of Texas."
Fast forward to today, where Kidd notes that the insurance industry is two to three years behind other financial organizations in respect to its e-commerce offerings.
Hart, however, isn't resting on its laurels. Instead the company has spent the past year producing HartFormsOnLine, an Internet service that facilitates the transfer of data. "It's the same principle as what we did with e-forms—we are exploring opportunities to stay with this market. We want to make sure that we have a viable offering when the needs of this marketplace follow along those lines."
This kind of thinking—the ability to stay one step ahead of change—is another key ingredient to success in this marketplace.
At PFI in Blair, Neb., insurance companies are responsible for 10 percent to 15 percent of its $6 million in annual sales, according to President Mark Davidson.
"This industry is constantly changing," noted Davidson. "You have to keep on it." For example, as in-house printing cuts into traditional forms business, PFI is responding by focusing on more service-intensive items such as commercial printing and promotional products.
"As customers begin to do some of their own in-house printing, which has cut into our business a little, we've begun leveraging those relationships and attempting to provide the same high level of service in ad specialties and commercial printing that we do in business forms," said Davidson.
Atlanta-based F.I.A.'s two largest accounts are insurance companies, noted President and CEO Brad Dorsen. Together, the companies provide about $1.6 million of F.I.A.'s nearly $3.9 million in annual sales.
But getting and retaining large insurance company business isn't always easy, said Dorsen
"Big companies often feel that they have to do business with big companies," said Dorsen. "It can be a challenge to convince them that a mid-size distributor can fulfill their needs."
He described a job for which his company competed against Reynolds & Reynolds. "The client decided to go with them. Six months later, the customer came back to us." Why? "Service," said Dorsen. "Our service distinguishes us more than anything else. We have literally had calls from customers at 9 p.m. on Christmas night and we've opened up our warehouse and taken the forms to them. You're not going to find the big guys doing that."
While distributors agree that, in many ways, selling to the insurance market differs little from selling to any other market, it does have some unique characteristics.
"Insurance companies require a great deal of history on their forms," said Dorsen. "Many of the forms are numbered, any drafts that we do are numbered, they want to know exactly who got what and when, who signed for it—everything."
Dorsen also noted that "we never get rid of the last printed samples of any forms we produce for insurance companies. We had a company that, during a lawsuit, needed a copy of a 1979 Texas auto policy—and we were able to give it to them. It's the only group of files that we have that we never purge."
For Hart, said Kidd, the insurance industry is unique in that compliance changes don't lend themselves to regular or routine service.
"When it rains, it pours. We could have a significantly large number of changes occurring all at once, or experience a long spell where no changes are needed at all," said Kidd. "It makes for a little bit of a challenge to keep your workforce on its toes."
However, he added that it's not unlike other markets, where the key is to hold yourself out to be not just a provider of services, but also a helpmate to customers in finding solutions to their needs.
"While the insurance market is different from other industries, there are certain factors that re-main the same. We build relationships with people, take darn good care of them, provide a high-quality product and get it to them in the time frame they need it," Davidson added.
Because this market is marked by a large number of state and regional companies, lucrative opportunities abound for distributors in the sale of "more commercial, generic-type products that anyone can sell without any special beefing up of staff or specific knowledge of the marketplace," said Kidd. These include marketing brochures, letterhead, envelopes, etc.—items that can be secured and provided using skills generally-acquired in the forms industry.
This is the primary approach taken by PFI, which deals mainly with large insurance companies, said Davidson.
"We do a little work with local agencies, but the important and lucrative part of our business is in the companies. The volumes are larger and they fit better into our own company philosophy as far as the size of the companies we like to deal with." In addition to commercial printing, the company does much of its insurance industry business in large quantity flat- and cut-sheet work, multi-part forms and envelopes.
F.I.A. sells its two large insurance customers "90 percent of all of the printing that they buy—from business cards and stationery to continuous to electronic forms," said Dorsen.
And while he agreed that a distributor doesn't have to know how to write a policy from scratch to succeed in the insurance market, being familiar with some of the technical information is important—especialy state-by-state format requirements.
According to Dorsen, "You have to know what they are trying to accomplish and how their systems work in order to be able to provide them with a product that is on time, that gets approved [by the state] and that they are able to sell."
Taking this one step further, Hart has chosen to concentrate on providing more compliant-type knowledge.
By aligning with national organizations that produce standard language for insurance policies and forms, Kidd said that his company is able to stand out as a provider of compliant services to the insurance industry.
"There are a handful of organizations that yield standard language for insurance companies to follow, if they choose to do so," said Kidd. "We have sought and received licensed status with some of them to reproduce and manufacture their copywrited forms, and we hold ourselves out to the marketplace as having those credentials."
Under the licensing agreements, said Kidd, royalties are paid to the bureaus when the forms are sold. "So there is a financial commitment involved," he noted.
"It allows us to show that we can be an asset to this marketplace—we know as much as our customers know and thereby remove the burden of keeping track of changes from them. If as a supplier, you can provide that, it's worth a premium," said Kidd.
While some of distributors' traditional insurance market business has fallen off due to increased print-on-demand capabilities, continuous forms and envelopes continue to be a lucrative venture.
By Misty Byers
- Places:
- Austin, Texas