Set Yourself Apart

Congratulations! You have formulated and executed your company’s vision plan. You have achieved your top three stated goals.

First, you have established yourself as a trusted adviser for your clients. Second, you have launched products and programs for these clients that align with their future growth and financial goals. Finally, you are watching these relationships generate consistent revenue for both you and your client partner.

What now? Have you reached a threshold reminiscent of the adage, “When you are green you are growing, and when you are ripe you are rotting”?

Many successful manufacturers, dealers, agents and third-party administrators evade this question. In some cases, it is a blind spot. Some fear the consequences of change. Others just do not seem to care.

Change for the sake of change is rarely a great idea.What if your client is performing well and content with its current products? Are you changing programs based on your own desire for change and not the client’s? You need to ensure your refreshed program is well-planned, properly executed and viable for you, your client and the end user.

Choosing Your Refresh Path

There are several options you might choose to reinvigorate your product platform. Ideally, you are striving to increase portfolio longevity, stability and performance.

One option might be to add a new cutting-edge product to your client’s menu. This may seem exciting to both you and your client. Unfortunately, untested products often come with significant risks. What if the underwriting results are unvetted? Or even worse, losses are a known problem? This could prove to be a regrettable decision for you and your client.

Another option would be to revamp some or all the components of your existing product.

The criteria might be based on improving, uniqueness to market, price, quality of underwriting, quality of claims management, marketing materials and more. Changing product construct might positively or negatively impact your desired result. If you do not present a solid rationale for these changes to your client, you might have opened the door for an unintended “request for proposal” scenario.

A Proven Path

Creating a private label for a few or all your products is a powerful way to jumpstart stagnant programs. What are the key ingredients to consider for a private label? Are you a proven trusted partner? Do you possess a tenured working relationship with the client? Finally, could the portfolio generate meaningful volume?

If you answered yes to all the above, then private labeling might be the right solution for you. Rather than reinventing the wheel, consider rebranding your key core programs using your own private label. This might sound difficult, but it is not.

There are many advantages. However, brand control tops the list. These products provide immediate, unique market differentiation for your company. They feature your own narrative and competitive advantages. Every aspect of the program contains specific choices you make to enhance your product marketing, quality and margin objectives.

One automotive dealer group in Texas essentially private-labeled its “easy, best-of-class” purchasing experience, then moved to a marketing campaign that excluded all manufacturer brand awareness to focus solely on its group identity and customer service philosophy.

Another positive aspect of private-label creation is margin protection. In a room full of providers offering the same badged products, you may find yourself facing profit erosion. Most companies would be better suited defending pricing on their “one of one” product versus a generic program. This protects your longevity and margins from competitive shopping by an existing client. Comparing apples to oranges makes program switching more difficult for the wayward client.

Lastly, if you are currently a price leader in your market, a private-label transition might allow for the possibility of margin increase or penetration growth.

The Track Record

Over more than 20 years, many manufacturers, large and midtier dealer groups, administrators, auctions and agents have found success through private-label partnerships.

The addition of product development, pricing, marketing, packaging, compliance, underwriting and claims management has delivered a wide range of successful private-label solutions that continue to exceed client expectations.

These programs range from stand-alone benefit products like exterior and interior coating protection products, vehicle service contracts, tire-and-wheel, key replacement and windshield coverage. Multiple private-label ancillary bundles that contain many of these benefits, among others, have resulted in clients’ diversification for the better and a re-envisioning of their roles in the marketplace that kickstarted further brand transformation.

However, at least some service additions or expansions will need consideration, such as appearance protection chemicals, marketing support, claims handling representatives and customer fulfillment specialists for repairs. These can each be built from the ground up internally or provided by a turnkey management partner, depending on your investment strategy and scalability expectations.

Costco created Kirkland. Walmart created Great Value. Why not consider creating your own brand of private-label products? Private-label clients, large and small have seen success.

The market is constantly evolving. Client product needs often change over time. You always have the choice to negate change. However, private-label programs can result in reinvigorating new partnerships, journeys and success for your business.

Stan Starnes is president of Nobilis Group, where he drives company growth across product administration, outsourced claims management, and chemical manufacturing and distribution.He is a veteran of the automotive industry since 1988.

EDITOR’S NOTE: This article was authored and edited according to Providers & Administrators editorial standards and style. Opinions expressed may not reflect that of the publication.