Preventing Insurtech Buyer's Remorse: A Vendor Vetting Guide

How to Avoid Making the Wrong Software Decision for Your Health Insurance Organization

Have you ever experienced that sinking feeling after investing in new technology, only to realize it doesn't meet your agency's needs? You're not alone.

Many software buyers grapple with buyer's remorse in the rapidly evolving technology landscape. This costly mistake can hinder your agency’s growth and efficiency. However, with a strategic approach to vendor vetting, you can avoid this pitfall and find the perfect solution for your business.

Understanding Software Buyer’s Remorse

Buyer’s remorse is a feeling of regret, guilt, or anxiety after making a purchase. It’s a common feeling many of us have probably experienced in our personal lives after buying that item of clothing, the latest smart device, or a new appliance. But this feeling can also apply in the world of technology and software.

According to a Gartner study, 60% of buyers regret purchasing software in the last 18 months, and 54% regret multiple software purchases. This remorse can stem from factors such as overspending, implementation issues, or the software failing to meet expectations/needs.

Let’s dive into the importance of vendor vetting, and how it can help alleviate the feelings of remorse when buying software.

Why Avoiding Software Buyer’s Remorse Is Important

Choosing the right health insurance agency technology (AMS, CRM, or other system) is crucial for success. However, many agencies experience buyer’s remorse for a variety of reasons.

In fact, making the wrong technology decision can be very costly and detrimental to businesses. In Capterra’s 2024 Tech Trends Survey, they found that 41% of companies felt that making a software purchase they ultimately regretted made them less competitive, and 38% felt that it made them less productive.

As mentioned above, three in five buyers regret making a software purchase for their business — which means you’re more likely than not to make the wrong tech decision. A mistake like this can have costly consequences that affect your agency’s productivity and competitiveness. So, how can you avoid it?

The short answer: doing your due diligence and thoroughly vetting your potential software vendors.

How To Avoid Insurtech Buyer’s Remorse

When selecting a health insurance agency software vendor, assessing whether the solution aligns with your agency's specific needs and objectives is crucial. There are many ways you can do this, but one of the best and most effective ways is by getting straight to the point and asking the right questions.

By outlining your needs and goals ahead of time and asking targeted questions during sales demos, you can ensure the system aligns with your agency’s future. This approach helps prevent insurtech buyer’s remorse by confirming that the chosen solution can effectively support your operations.

To do this well, focus on these four main categories:

• Company details
• Reviews & online presence
• Onboarding, data migration, & support
• Security & reliability

By asking the right questions, health and benefits agencies can make informed decisions and select a tech partner that aligns with their needs and goals, ultimately reducing the likelihood of experiencing insurtech buyer’s remorse.

Company Details

First and foremost, it’s crucial to know the basic details about any company you’re working with — their history, their target audience, and who the people are that make up the organization. This information can be valuable to know to make the best decision for your organization and avoid buyer's remorse.

Some questions you can ask about the company could include:

• Who is the software for? Is it generic or industry-specific?
• What’s the history of the company?
• Who is the team behind the organization?

Reviews & Online Presence

Testimonials, reviews, case studies, and other forms of social proof can be a good benchmark for how a company is perceived by its clients. A lack of these types of comparison content can be a red flag. On the contrary, a company with many clients that have provided positive reviews can be a good sign that the vendor you're researching is viewed favorably by real product users.

Comparison sites, like Capterra, G2, and more, can also be valuable resources when it comes to vendor vetting. In fact, software buyers are 10% more likely to experience buyer’s remorse when they don’t use product comparison sites.

In addition to social proof, social media activity can also indicate whether a vendor might be a good fit for you and your team. Review the type of content they post regularly. Is it relevant to your industry or your agency? Is it helpful and educational? This can be an attribute that you might consider looking for when doing your research.

Here’s what to ask in regards to company reviews and their online presence:

• Can you provide comparison content (testimonials, reviews, case studies, etc.)?
• Do they regularly post on social media?
• Do they share content that is relevant to you?

Onboarding, Data Migration, & Support

Knowing what the process will look like if you decide to adopt their software and what ongoing support you can expect after the fact is crucial information to know before choosing a tech partner.

The last thing you want is to adopt software only to be left high and dry during the implementation process — remember, that is one of the top reasons why software buyers have felt buyer's remorse. Make sure that the company has experience with client onboarding and data migration.

Knowing if the software company has resources and support for you to access if you decide to buy is also important. Look for a company with a dedicated client success team (client success managers, support team, data specialists, etc.) and resources like a Knowledge Base and/or Academy.

Here’s what you can ask about onboarding, data migration, and support:

• What does onboarding and ongoing support look like?
• How do I get my data into the system?
• Does the company offer any educational tools or resources?

Data Security

In the health insurance industry, data security is paramount. You are constantly handling sensitive client information, and your system must take the security of your data seriously.

One thing you might look for is whether or not the vendor has any accreditations, like a SOC 2 Type II report or HITRUST report, or if they are HIPAA or HITECH-compliant.

Last, but maybe most importantly, you’ll want to know who owns your data. Not knowing the answer to this question can have disastrous consequences. After all, your book of business is your most valuable asset. If you make the decision to move to a new system, only for your data to be tied up in your old one with no way of getting it out, you’re stuck with starting over at square one. Don’t let this happen to you! Be sure to know what an exit plan with any potential vendor looks like.

Some questions you can ask include:

• How many revisions/updates does the vendor release annually?
• Who owns my data?
• Does the company have any accredited reports (like SOC 2 Type II or HITRUST) and/or are they HIPAA or HITECH-compliant?

Overall, be wary of vendors who:

• Struggle to articulate how their solution addresses your specific needs
• Lack industry expertise or a clear understanding of health insurance agency software needs
• Offer vague or evasive answers about implementation timelines and support
• Can’t identify their security standards or sign a Business Associate Agreement (BAA)

You can significantly reduce the risk of selecting an ill-fitting technology partner by asking these questions. Remember, the right health insurance agency software vendor should meet your current needs and support your agency's future growth and success.

The AgencyBloc Advantage

At AgencyBloc, we offer industry-specific solutions designed for individual health, senior, and group benefits agencies. Unlike generic CRMs, our platform is built from the ground up to address the unique needs of health insurance professionals.

One of the primary causes of software buyer’s remorse is poor implementation and lack of support. We tackle this head-on by providing a robust onboarding and data migration process that includes personalized training and ongoing assistance. Plus, we have resources like the Knowledge Base and the Academy that provide our clients with on-demand help and learning opportunities. This ensures that agencies can fully leverage our software's capabilities, maximizing their return on investment.

To stay ahead in the fast-moving insurance landscape, we also consistently update our platform to: 

• Keep up with industry changes
• Improve the user experience
• Fix vulnerabilities
• Increase security

AgencyBloc users can view monthly release notes in our Knowledge Base to get a full scope of the latest features and enhancements. This commitment to innovation helps our clients adapt to new market trends and regulatory changes, reducing the risk of outdated or unprotected technology — a common concern for insurtech software buyers.

As you navigate the complex landscape of insurtech solutions, remember that thorough vendor vetting is crucial to prevent buyer's remorse. Following these guidelines and leveraging a comprehensive vetting process, your agency can make informed decisions that align with your current and future needs and goals. Take the time to vet your options carefully, and you'll be well-positioned to thrive in the ever-evolving insurance industry.

Posted by Sarah Rosonke on Friday, December 27, 2024 in Insurance Agency Management System

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