Finding insurance just seems like fighting your way through a jungle of policies and prices. Fight over and you still may only be left with an ok price for a bog-standard option. The insurance industry hasn’t been the most innovative when it comes to customer choice.
An industry ripe for disruptive innovation. Bought By Many are bringing collaborative consumption to this space benefiting both consumers and insurance companies, in a forward-thinking way. The result: good group insurance deals for their users.
This article is part of Your Allies’s entrepreneurship series. We profile entrepreneurs and their business concepts and give our view on their marketing approach. There’s always something to learn from real startup and business growth experience!
What was your motivation to set up Bought By Many and what mission have you set yourself?
“Leaving corporate life I had to get a new health insurance. I was quoted four times the cost of the previous corporate deal, obviously a massive price difference.
This experience made me realise just how much individuals can be taken advantage of by corporates. There were a few months between this aha moment and forming the idea for the company. My business partner and co-founder Guy Farley was doing work on grouping people via social media at the time so we linked that approach to the idea of negotiating group deals for individuals.
We aim to use people power to give everyone a better deal. Individuals get a better price and/or more tailored insurance policy. Insurers get back closer to consumer needs the way they used to be. We facilitate this interaction.”
Your Allies says… We know personal experience is the catalyst which drives many entrepreneurs to start their own business. Spotting a clear gap in the market based on his own personal dealings with insurance companies,
Steven then called on his experience of setting up and growing businesses. Combining this with his knowledge of the sector and teaming up with a co-founder with the right set of complementary skills he made it happen. Within the insurance industry they’ve carved out a niche for themselves as a facilitator of product innovation for the insurance industry and deal negotiator for users, a fantastic proposition making for a strong market position.
What makes Bought By Many unique, unlike any direct and indirect competitors?
“We have no direct competition in the UK and I find it amazing. Here’s why: the insurers haven’t changed for a long time, it’s a complicated industry. Affecting change in such an environment is obviously not easy.
Therefore investors have a bigger appetite for other financial services areas. Whenever I’m at conferences where financial services innovation is being discussed, it’s about payments, processing, retail banking and so on.
Also insurance aggregators have absorbed a lot of the margin, diminishing the motivation to innovate further, plus creating a homogenous policy offering rather than focusing on consumer needs.”
Your Allies says… No competition is a dream position to be in but entrepreneurs know to be prepared for competition to enter. Being a first mover isn’t itself a barrier to entry for new competitors but it gives a head start building such hurdles. Establishing strong relationships with business partners, in Bought By Many’s case insurance companies, is one such step, as is raising brand awareness, to name just a few. Having a competitive strategy in your business plan and implementing it is a must even when you start out without competition.
What is your business strategy to accomplish your mission?
“Having successfully proved our concept, our growth plan is to roll out more and more groups, focusing on the UK market. Insurance companies find innovation hard as it would cannibalise their back books. However, we want to use our knowledge about consumer needs to address big issues.
We don’t have a back book restraining us. There are tangible problems that we can help address by introducing groups such as ones for young drivers or flood insurance.
Currently there are about 200,000 houses in flood zones that are uninsurable. Most people living there would love to insure themselves, even if it was expensive to do so. We’ve put a group for them live, and the related insurance product is in the making. It’s going to be a 3 tiered offering, ranging from a regular home insurance with flood exclusion to a flood insurance with excess insurance.”
Your Allies says… It’s always good to see a for-profit company doing good business. Bought By Many’s growth strategy helps address unmet consumer needs in crucial areas, and the industry to provide new products for previously unserved groups of people. According to ABI theUK insurance market is the largest in Europe, and third largest in the world so there should be plenty of growth opportunity for Bought By Many before they’d have to consider additional geographical markets.
What marketing strategy have you put in place to reach your business objectives?
“Our primary marketing objective is to get access to individuals who have a particular insurance need. We’re working hard to get them to join a relevant group. Once they’re in the group we make it easy for them to invite others who have the same need.
We also encourage users to tell us about insurance they might want. New groups mean new products for us if they come to fruition. We typically go into product development from about 100 members, though that might vary by insurance offer.
Being an online platform we focus primarily on social media marketing and PR, and on facilitating word of mouth through our groups. We might choose to partner up with consumer groups who like the concept of collaborative consumption.”
Your Allies says… Bought By Many are applying the classic startup marketing combo of social media and PR to facilitate word of mouth. However, due to the nature of their group deals they have a distinct advantage: it’s in their users’ very own interest to invite more people to join the group their in to get a good deal. They’re smart to stay on top of researching unmet insurance demands, keeping the customer and their needs where they should be – at the core of their proposition. Using the feedback channels in place to keep improving all business and consumer touch points they have will further help refine and strengthen their value proposition.
Constant testing of what type of content their users like and like to share surely is high on their marketing agenda, as will be balancing the followers to following ratio on Twitter. We’re big advocates of smart partner marketing and can only recommend adding this clever way of getting the most out of precious marketing budget and combining reach.
What was your biggest challenge in developing Bought By Many and how did you overcome it?
“I found all the necessary legal, accounting & regulatory compliance to be a complete pain. We’ve spent lots of money and time on these requirements none of which added anything much to the process of building the business. There’s nowhere to turn to find out easily about the best suited accounting firm, law firm, about how to register and so on.
And then how much tax we’re paying in a variety of places is ridiculous I think.
I do fear for new companies that want to set up. It’s hard to know what to do, and it just shouldn’t be.”
What’s the next one?
“I think it’s growing at the right pace – not too fast, not too slow -, finding that pace and sticking to it. We want to stay nimble but keep up our ability to support the consumer groups we create, and to work with insurers while we’re growing.”
Your Allies says… Having gone through the process of setting up a business ourselves we relate to what Steven is pointing out: it should be as easy as pie to set up shop and at least in the early stages there should be significant tax advantages. Especially seeing how much the UK economy could do with growth and how much SMEs are contributing to the economy: they provide nearly 60% of jobs and 50% of GDP. About that next challenge of growing at the right pace, though it seems like a good problem to have it still is a difficult and important one to get right, the more because nimbleness is one prime competitive advantage of startups over established companies.
Anything you would do differently that might have saved time, energy, money?
“If I’d known a year ago what I know now, I’d have jumped in at the deep end quicker and might be a few months ahead now.”
Your Allies says… An encouraging call to go for it for you budding entrepreneurs out there! We’re looking forward to following Bought By Many’s growth path and wish them lots of success for it!
Ready for even more inspiration from real-life business experience? Check out the complete entrepreneurship series!
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