Insurance Agency Growth Organic vs. Acquisition Strategies - photo by pexels-mikael-blomkvist-6476589

Running a business requires a lot of blood, sweat, and even tears. It requires money for practical things like furniture, electronics, and staff. It needs a proper recruitment process and marketing strategy. And most importantly, running a business depends on efficient customer retention.

It is no different in the insurance industry. If you run an insurance agency, you know how hard it is to keep up with the competition. You know what a challenge it is to keep your audience interested in your products. You also know your hard work will go to waste without business growth.

You need organic growth to ensure your agency is successful in the long term. This means investing in several strategies to keep attracting new audiences. But you could also benefit from acquisition-based growth. Acquisitions will help you make your business visible to new markets. It may also allow you to adopt new technologies and gain highly qualified staff.

Which strategy is best for growth, organic vs. acquisition? Keep reading to discover which one will work best in your agency.

The Organic Approach Requires Strategic Thinking

Organic growth means encouraging people to choose your agency over your competition. Find ways to show potential customers that your agency can offer them something other agencies cannot. Show them, inform them, and educate them about insurance and why your agency has the best and most accessible products.

For instance, if you offer life insurance for people with a specific medical condition like heart failure or diabetes, you already provide a product that many other agencies do not. If you’re able to offer competitive rates on non-standard home and auto insurance policies, you have added value where other agencies haven’t.

Use content marketing to let potential customers know how you can protect them and their families. Show them how you can secure their futures and how your agency can help take some of the fear out of emergency or tragic situations. Content marketing includes blog posts about insurance products, professional articles, social media posts, and educational videos.

Moreover, you can attract a larger audience with your content marketing by including SEO tactics. Optimizing your website and social media content with SEO keywords will help your agency rank higher in search engine results pages. This means your business becomes more visible, and more people will read and inquire about your services.

Use a CRM or insurance agency management system to track and store customer interactions and information. These systems help agencies manage and build customer relationships. And they can help you stay on top of cross-selling and upselling opportunities. You can also use them to automate time-consuming tasks like lead generation and email marketing, which allows you to grow your customer base faster.

Acquisition Offers Faster Results

Though you need organic growth strategies to sustain your agency’s success, these strategies can take a long time to produce results. Acquisitions, on the other hand, give you instant access to a whole new customer base. When you buy another agency, you get new distribution channels. And you get an additional team of qualified agents.

However, buying an agency to integrate with yours is an expensive way to grow. Not only that, but you also need to plan and do extensive homework before you sign that acquisition document.

For instance, you should choose an agency that is like yours. Going too far off the beaten path may lead to challenges ahead. Look for an agency that is roughly the same size and offers the same type of products.

Also, ensure that the agency is financially sound. Many acquisitions have gone sour because one party was not forthcoming with information about financial difficulties. If you buy an agency already struggling to stay afloat, you may suffer a financial loss instead of expanding your business.

Furthermore, merging any two organizations often results in some tension. You must prepare yourself and your staff for potential conflict, new systems, and possibly an entirely new operational process.

Buying another agency will provide you with a new customer base instantly. But, if the merged agency does not continue to provide the customer service that existing customers are used to, you will have a tough time retaining them.

Which Is the Right Strategy for Your Business?

The right strategy for your agency depends entirely on you. It is up to you to decide whether you have a budget suited to organic growth or acquisition. Or, whether you have enough time and money to do both. Establish whether your agency can withstand the risk of merging with another.

If your agency is small with niche products, you may fare better with organic growth strategies. However, if you have extensive coverage options and want to expand your business fast, you could consider an acquisition.

Plan for Sustained Success

Do not dive head-first into any strategy. First, determine whether your market position warrants acquisition. If you continuously beat your competition, organic growth may be enough to keep your agency successful. But, if you struggle to compete with other agencies, you could use an acquisition to gain valuable market share.

Lastly, your team is your most valuable asset. If your agents have the skills to run a successful organic growth strategy, let them do it. If your agency is a startup and you do not have agents with the necessary skills, buying another agency may get you the essential resources you need.

Plan for success and do not let short-term gains take your focus away from growing your agency over the long term. This is the only way to make a decision that will help grow your business.