We’ve all been there before: you get a notice from a software platform that you love, saying it’s under new ownership. You might not think much of it at the time, but soon you start to see the effects. A workflow you use everyday changes or disappears altogether. You call the support team and can’t get a hold of a real person. You get a notice that the price is increasing. Eventually, most of the factors that persuaded you to choose that platform in the first place are no longer relevant.
It’s tempting to keep trudging along with a platform simply because it’s familiar. Moving to a new system is a big decision that will require research and staff training. But there are many hidden costs to weathering a technology platform acquisition, and in the end, it may actually save money and effort for your agency to move to a different platform.
Here are six questions to ask to determine whether it’s worth it to stay with a platform after an acquisition, or move on to greener pastures.
1. Is the product changing or being discontinued?
An acquisition usually means change. And not all changes are bad—maybe it’s simply a name change, or some differences in branding. But other times, it could mean the product you know and love is being significantly overhauled—or worse, discontinued altogether.
If the changes make for a better, easier-to-use system for your agency, it might be worth the cost of re-training your staff on new features or processes, and enduring the bumps while the transition smooths over. But if not, it can wreak havoc on your agency processes and result in hours of training and lost time to understand how things are changing and the impact it has on your existing workflows.
2. Is the level of support for the product changing?
Another common pain point during technology acquisitions can be changes to the support offered for the product. The acquiring company’s support reps may not be as knowledgeable about the product, or support may even be outsourced to a third party. This can cause major frustration for agency staff and seriously impact their productivity.
3. Is the price or pricing structure of the product changing?
One of the most obvious changes that often follows an acquisition is a change in price. The acquiring company may not have the same commitment to grandfathered pricing that the previous one did, or may be looking to quickly recoup acquisition costs by raising the price of the product.
A small price increase may seem insignificant, but pay attention to whether it’s accompanied by a change in pricing structure. For example, maybe you paid a flat rate before but it’s now based on the number of users, which could increase your cost. Or perhaps the platform is moving to tiered or a la carte pricing, so features that were included before may now cost extra.
Make sure you understand exactly how the changes will affect the overall cost of the platform. A price change might be worth it if it results in more value for your agency (more features, etc.), but if the acquiring company is asking for more than an incremental price increase for the exact same features, be wary.
4. Are the terms and conditions changing?
When systems change ownership, customers are often asked to agree to an updated set of terms and conditions. Don’t check the box without reading what you’re agreeing to! There could be major changes to the services being provided, the length or conditions of your contract, and much more. Take the time to read through the new terms, and ask questions to get clarification before signing if anything is confusing or unclear.
5. Do you have trust and confidence in the new owner?
You had a certain amount of trust in the platform you chose—you likely talked to someone or several people at the company before making your decision. Do you have the same level of trust and confidence in the new owner? Do your research on the acquiring company and make sure they’re worthy of your business—not just now, but into the future.
One important thing to note is who owns or has a stake in the company, and what their motivations are. If the company has outside investors or has changed ownership recently or many times in the past, it’s possible the scope of the product may change in the future as well. Is the owner focused on turning a quick profit so they can sell again in a few years, subjecting you to another arduous acquisition process?
“It’s important for your agency to feel comfortable that you can place your trust in a vendor not only at the moment you sign the agreement, but well into the future,” says HawkSoft’s Chief Marketing Officer, Rushang Shah. “Vendors that are committed to remaining privately owned, like HawkSoft for example, wield the advantage of having fewer stakeholders to answer to besides the agent, so they can focus purely on what’s best for the agent rather than making a quick return on investment.”
6. What is the cost (hard and soft) to change platforms?
Once you’ve answered the previous questions about the acquiring company, you should have a clear picture of both the material and hidden costs associated with remaining a customer of the acquired platform. Now the only remaining question is, are these costs greater than what you’d pay by moving to a different platform?
An acquisition is a good time to consider your other options. If you’re going to end up paying more and re-training your staff, you might be able to put that time and money to better use with another product. Take a look at your options again; maybe your agency’s needs have changed or evolved since you first chose the platform, and now they’re better suited for another system. Consider both the hard costs, which are monetary, and soft costs, which are harder to put a price tag on (like ease of use and staff satisfaction). In the end, which platform will bring the most efficiency, ease, and sanity to your staff’s daily workload?
Changing platforms can feel daunting, especially if your client data has to be converted between systems. But the truth is, a good platform will make the transition quick and seamless for your agency. Don’t let the fear of the unknown stop you from making a beneficial change for your agency. Take a look at our blog on switching management systems for information about why and how to make a change in technology for your agency.
In addition, don’t forget to ask the earlier questions about support, terms and conditions, and trust in the owner for the new platform to ensure you’re picking a worthy partner.
Choosing the right technology
Having the right software tools is crucial to the efficiency and success of your agency. If a platform is no longer serving your agency’s needs, don’t keep limping along for the sake of maintaining the status quo. Today’s Insurtech landscape is rich and competitive, meaning companies must provide better and better service to stay relevant. If one of your agency systems has been acquired, take the time to evaluate whether the change will help or harm your agency.
Tips for making a change in agency management systems
Get tips on overcoming common fears and embracing transformational change when moving your agency to a new management system.
Since 1995, HawkSoft is a leader in management systems for independent insurance agencies that want effective workflows and a delightful experience for staff and policyholders. HawkSoft offers the following promise to insurance agents: your investment in HawkSoft will pay for itself in the first year. Learn more about HawkSoft’s unique father-and-son story here, or request a demo to learn more about our agency management system.
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