Engaging with SMEs

A sound SME client base is fundamental to any regional broker. Edward Murray advises on how to win this much sought after business in a period when many smaller enterprises are having to make cost saving

First Published in Insurance Age July 2009

Competition for small to medium-sized enterprise (SME) business is incredibly tough with direct writers and niche players muscling their way into what has traditionally been the territory of regional brokers.

Many SMEs are also under massive financial pressure as they fight their way through the recession and this has made them more sensitive to exactly what cover they need and how much it will cost them.

When a strong book of SME clients is the bread and butter of any successful regional broker, winning the battle for their business is a concern being discussed in boardrooms up and down the country.

Views differ on the best way to engage SME clients, but the general consensus is that a grapeshot or scattergun approach is a waste of time; simply firing out varied and non-specific messages to all and sundry is inefficient, costly and ineffective.

Firms may believe they are busy building their brand and growing a platform for future sales but, in truth, they are simply emptying their coffers and scuttling their own ship through activity that will never deliver the results they want or make a return on their investment.

So where should brokers focus their sales and marketing attention and how can they best get in front of the SME clients they so badly want to bring on board?

First of all they need to understand their own business and get a handle on what they are really good at.

As Adrian Stewart, communications director at broker Buckland Harvester, explains: "Brokers have to conduct a rigorous analysis of their business and determine which are the most profitable activities currently being undertaken. Once it has been decided how money is being made, the next step is, quite simply, to acquire more of that type of business."

The point is echoed by Lyndon Wood, chairman of broker Moorhouse Group: "Firms should micro-segment their business, look at what they are good at and then look at what they are really good at. There should also be a bit of analytical work looking at new clients, what has been converted and at what level."

Once brokers know what their strengths are, then it becomes a lot easier to actually play to them and target the potential clients for whom they know they can do a great job.

Cross-platform promotion

It is here that sales-led marketing, local press and PR all become important. Mark Huxley, a director of Lamb Creative Marketing and Consultancy, believes firms should be thinking about using everything at their disposal including an online presence, mailshots, personal visits, editorial opportunities and advertising to create an overall strategy.

However, he is equally emphatic that a targeted approach is essential. "Firms need to be very clear about the message they want to get out." He adds: "It has to be part of the business agenda and it has to be very focused and measured to ensure there is an appropriate return on investment coming out of the activity."

While Mr Huxley accepts that it is sometimes difficult to create a direct correlation between marketing activity and immediate sales, he says that any successful campaign will make it easier to make sales going forward and this is something that all firms should be striving to achieve.

As part of the local community, sponsorship can prove very effective and firms may want to work with the local radio and print media to get editorial coverage or pay to have a regular presence.

However before undertaking such activity, brokers should have a good idea of what they want to say and to whom they are trying to say it. If their potential customers are not going to read or listen to their message, then what is the point? When there are so many ways to interact with potential clients, wasting time on ineffective methods makes little business sense.

It is also worth remembering that not all marketing activity has to be costly. Online networking tools such as LinkedIn, Twitter and Facebook deserve an article all of their own while more traditional avenues like local Chambers of Commerce can be "goldmines of contacts and leads" according to Mr Huxley. They also offer a platform from which brokers can hold themselves up as thought leaders in the local community.

By taking a proactive approach and looking to give presentations on possible issues affecting local businesses, changes in legislation or basic risk management procedures, brokers can establish themselves as leaders in their field, set themselves apart from peers and show they have valuable insight and information to offer clients.

Getting the tone for such presentations right is also important and Mr Huxley is quick to emphasise that brokers should avoid being patronising at all costs.

The size of SMEs that brokers are trying to attract will also factor into how they go about marketing their wares and the amount of money they want to invest in doing so.

Mr Wood points out that at the micro SME level price is a very important factor and working profitably is all about volume. As such he says getting a return on marketing activity in this area can be difficult and believes some firms are "losing millions" through their high profile activity.

Mr Wood says that much of the marketing activity Moorhouse Group does in the micro SME sector is based on building its brand through its people and the firm tends to rely on hammering the phones and getting in touch with as many of the one million firms it has on its SME database as possible.

The most important part of any marketing campaign is the thought that goes into it. As Mr Stewart says: "Before you embark on expensive advertising projects, sit back and think about what you do, how well you do it and who else can benefit from those particular specialisms."

When the SME market is so hotly contested, taking the time to create the best approach to winning new business should help brokers hold on to their fair share of the sector amid mounting competition.

Tips to win SME business

• Inwardly assess the brokerage and evaluate what it does best and where its strengths lie
• Play to these strengths
• Have a clear idea of the message to be broadcast through any marketing activity
• Effective marketing does not have to be costly, but it does have to be well thought out and focused on the correct target audience
• Visiting the sales and marketing section at www.businesslink.gov.uk will help firms with all of the practical tools they need to get started