Dont Sell Unicorns: The Top Ten Mistake Insurance Software Vendors Make and How to Avoid Them
Don't Sell Unicorns: The Top Ten Mistakes that Insurance Software Vendors Make and How to Avoid Them
Poor communications and sales practices cost insurers and technology vendors millions of dollars per year in wasted staff hours and lost sales.
As Celent's research has shown, insurance software sales continue to grow, and insurance CIOs generally see leveraging software vendor packages and components as an integral part of their strategies. However, Celent experience and research has also shown that too often there is, in the words of the captain in the Paul Newman movie Cool Hand Luke, "a failure to communicate." This was demonstrated most clearly in the Celent report What's Wrong With Insurance IT Sales Practice and How to Fix It, March 2005, which presented survey results from insurance IT buyers on the gap between their needs from software vendors during the sales and evaluation process and what they actually get.
A new Celent report, Don't Sell Unicorns, presents a set of key principles drawn from Celent's insurer clients' experience as well as our own analysts' experience working with and even on behalf of insurers during vendor selection and evaluation.
"Our hope is that by simplifying some of these key issues into the ten most common mistakes, we can help vendors avoid them and thus streamline the identification, evaluation, and selection process for insurer IT groups," comment report authors Matthew Josefowicz, Managing Director of Celent's insurance group, and senior analyst Chad Hersh.
The top ten mistakes outlined in the report are:
- Selling unicorns when they want to by horses, e.g. insisting on a unique product classification that confuses the market rather than positioning the offering as a solution to a common need.
- Not understanding marketing, and the importance of clear communication to the marketplace.
- Confusing the market with meaningless branding.
- Annoying the top and ignoring the bottom. CIOs have specifically designated other staff to do the first cut through the available vendor solutions. Trying to do an end-run around these people loses vendors respect from both quarters.
- Sending the wrong guys to the meeting. Sales representatives that don't know the industry, the target company's issues, or (infinitely worse) the product inside and out are a huge liability.
- Ignoring the needs of business users in the demo. Business users need to understand how they will use the solution.
- Not (immediately) answering the questions asked. Just because insurance technology buyers may move at a snail's pace is no excuse for vendors to do the same.
- Being a slave to the pricing model. Inflexibility costs sales.
- Not offering a free or at-cost pilot or proof of concept. Everyone wants to try before they buy.
- Not absorbing part (or all) of the costs for a charter client. New vendors must make their first client a true partner, and focus their client development efforts on finding that special partner first.
Josefowicz and Hersh will draw on this and other research on insurance software sales in a full-day training seminar to be held on Friday, April 13 in New York. This seminar will feature insights from Celent research and analysts, as well as an interactive discussion panel featuring two recently retired CIOs of top 20 insurers. For more information about this seminar, contact Chuck Smith at firstname.lastname@example.org.
A table of contents for the report is available online.Members of Celent's Life/Health Insurance and Property/Casualty Insurance research services can download the report electronically by clicking on the icon to the left. Non-members should contact email@example.com for more information.