Is Experience Marketing the Face of the Future?

Rolling the Dice: Business Insurance Gambles to Avoid
You can afford to take risks on some things. But business insurance isn’t one of them. Too many small business owners make mistakes when setting up their business insurance. Here are three of the most common mistakes you don’t want to gamble on taking. Losing may cost too much.

“Let it ride”: Check with your agent to determine the proper coverage for your company. For example, a home-based business is not covered under homeowners insurance, and a client’s policy doesn’t offer coverage for your contracting business. If you are basing your security on false hopes of coverage, you could lose it all on one bet.

“All in”: It’s true that all businesses need certain basic policies. These include property insurance, liability insurance, business vehicle insurance and workers’ compensation insurance. But don’t view insurance as one-size-fits-all; each business has its own industry-specific risks that may require specialized policies.

“Winning streak”: You have avoided disaster so far. Don’t let this winning streak convince you that you’re invincible. Without proper coverage, your entire business is at risk. Many small businesses don’t recover after a disaster. Ensure you have proper policies in place, and consider business interruption insurance to provide income if your business closes temporarily.

Rather than gamble with your business, seek sound counsel from your insurance provider. Your agent will lead you safely away from gambling with your company, and walk you through the appropriate steps to provide adequate coverage for your business. With extensive insurance knowledge and your best interests in mind, your agent is a sure bet.


The Face of the Future: Experience Marketing

A new approach to shopping is coming our way in 2018, and it’s one that every business, no matter the industry, should be aware of.

It’s all about the “experience.” And while the charge is led by branded clothing and accessory retailers, it paints a picture of significant change to every company’s interface with customers.

As the department store and the mall die off, corporations are experimenting with branded environments that function as marketing tools as well as retail outlets.

For decades, shopping – in malls, big-box showrooms, and tiny specialty boutiques – has been a cultural pastime. But the way people shop has changed dramatically as consumers become more digitally engrossed.

Interestingly, as noted in a recent article in CityLab, this may not be a good thing: “The current conventional wisdom on retail holds that digital sales cannot reach far enough on their own to build sustainable customer bases, so digital-first brands have migrated toward physical stores, pop-up shops, and other experiential marketing strategies.”

Now, it’s not just about buying a product, it’s about experiencing it. From malls that once engaged customers just by presenting a cornucopia of brands, the experiential environments now engage shoppers in ways designed to promote a brand’s online presence. Now, brick-and-mortar spaces serve as flexible settings or backdrops for retail “experiences” and incorporate advertising, design, events, multisensory input, social media, and more to woo and wow customers.

Clothing and accessory brands such as Warby Parker, Bonobos, and Everlane – known as digital-first retailers – have been out front in designing “experiential spaces” to connect offline with customers.

But others will follow. The experiential approach is resonating with the customer – who, as we know, is always right.

Do You Need a Supply Chain Interruption Policy?
Is your business completely self-sufficient? If your operations are like most in today’s marketplace, you rely on the delivery of goods from others. While you may find these sources reliable, it’s possible their supply could one day fail. Are you prepared if the chain should break?

If materials or finished products are delayed, your business suffers. A significant delay or cancellation can cause a complete shutdown of operations. And lacking the resources it needs, your business could come to a temporary standstill or even close.

Many business owners underestimate the effect this supply chain failure can have. It’s important to note that it can take more than two years to recover, as this type of failure affects distribution, costs, service, and ultimately your bottom line. From small businesses to global corporations, companies need proper protection against broken links in the supply chain. The right insurance can’t stop the chain from breaking, but it can stop your business from doing the same. For proper coverage, business owners have two main options.

Option 1: Contingent Business Interruption Insurance

Contingent business interruption (CBI) insurance reimburses lost profits and extra expenses caused by the interruption of someone else’s business. Your company does not have to suffer shared damage for coverage to apply. The point of the policy is to provide for your business when your supplier can’t. This coverage is appropriate when:

  • You rely on a single supplier for materials.
  • You depend on one manufacturer for most of your merchandise.
  • You purchase the bulk of your products from one business.
  • You rely on a leader property (a neighboring business) to help attract customers.

While CBI offers helpful protection, it is limited. The policy only provides coverage if your supply chain is interrupted due to physical property damage at a “partner’s” business. If it has a fire, for example, you’re covered. However, if its employees can’t get to work due to road closures, you aren’t. In short, CBI doesn’t cover all perils or circumstances that could negatively impact your supply chain.

Option 2: Supply Chain Insurance

Supply chain insurance offers broader coverage than CBI. Like CBI, it covers disruptions to your supply chain caused by property damage to your supplier’s business. However, it also covers losses due to other events. Remember that fire that wasn’t covered by CBI? Did the thought of road closures scare you? Supply chain insurance offers a broader umbrella that includes these threats. This type of policy can cover:

Public health emergencies, natural disasters, industrial accidents, riots, labor issues, road closures, political upheaval, regulatory action, financial issues.

Make Your Chain Stronger

Obtaining the proper insurance coverage is essential to protect your business from supply chain risk. To determine which option is best for your operations, talk to your insurance agent and take the following steps to avoid making a claim:

  • Evaluate your supply chain. What risks and weaknesses exist? Do you need to make changes?
  • Identify backups. What other suppliers and vendors could you use in a crisis?
  • Create a contingency plan. This includes securing appropriate insurance coverage for your business.
February 26th, 2018 by Lightship Insurance