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Carl O'Shea

New Zealand's changing SME business landscape

Crombie Lockwood works with over 100,000 clients across the country, with a large number being small and medium-sized businesses (SMEs).

Having direct contact with such a large number of SMEs from a wide range of industries allows Crombie Lockwood CEO, Carl O’Shea to remain close to the pulse of the SME landscape.

We asked Carl about his views on the changing nature of the New Zealand SME business landscape.

From your perspective, what is the current state of the market for NZ SMEs?

New Zealand is a nation of small businesses, operating in a landscape that is that is constantly evolving. Our SME clients play such an important role in our economy, with total NZ SMEs accounting for over 97% of all New Zealand businesses. They employ 29% of all New Zealand employees and generate 28% of our GDP.

Crombie Lockwood SME research illustrates that SMEs are much less likely than larger businesses to have a clear focus on growth, supported by objectives and plans to get there. In fact 37% say they are happy with the size of their business and have no intentions to grow. This supports other insights we have found which highlight a work-life balance and improving profitability as being the most important objectives to achieve (not necessarily growth).  

What are some of the common challenges facing SMEs in today’s market?

Some of the key themes arising from our recent SME research include maintaining a work-life balance, managing cash flow, finding skilled employees, keeping up with the pace of technology and regulatory and legislative changes.

The Sept 19 ANZ Business Micro Scope survey also echoes this view, citing regulatory requirements and finding skilled employees as the top two issues facing small firms.

How can Crombie Lockwood help with some of these challenges?

Today an SME business owner has to wear so many hats. Getting their heads around a movable feast of new regulations can be quite a challenge! Prosecutions from statutory obligations are hugely disruptive and damaging to any business, yet in most cases costs associated with unintentional non-compliance can be covered by insurance.

An area where we are seeing big challenges for our clients is in the health and safety at work space. Knowing what compliance means to a business can be difficult, particularly for an SME with limited resources to deploy. This is something where we are able to assist business owners in creating a plan to understand the measures they are obliged to have in place.

We also offer all our clients access to a range of regular thought leadership content that is based on research and insight on the most pressing topics facing NZ SMEs. We receive great feedback on this as we recognise small and medium business owners don’t necessarily have access to these sort of educational and thought provoking resources.  

What is it about today’s market that makes a broker’s service valuable to SMEs?

According to our NPS research the three most important things our clients expect from us as their broker are; expert advice, good communication and ease of service.

Starting out as a small business ourselves in 1978, we understand how challenging it can be to juggle all the responsibilities involved in running a successful business. Fortunately, insurance is one critical piece of the puzzle that we can help with, allowing our clients to focus on other aspects of growing their business. We pride ourselves on getting to know our client’s business as the first priority, only then are we able to position them to financially survive any insurable event. 

Understanding what our clients want and need from us is a huge focus for Crombie Lockwood. Over the last year we’ve surveyed more than 13,000 of our clients on their level of satisfaction with our service and our overall NPS score during this period has been +35 (against an industry average for insurance brokers of +7).

Another critical piece of the puzzle of course is claims. This is really where the rubber hits the road and we deliver on our promise. We go in to bat for our clients when it really counts. Our clients received over $200m in claims settlements in 2018.

What trends and challenges do you predict for NZ SMEs in the next few years?

I believe that the pace of change will only continue to accelerate, meaning business owners increasingly need to work on the business rather than in the business to keep up. Consumer expectations are rising, and with a much more connected world, customers are increasingly comparing the service they receive with other global companies regardless of the industry or business type. This means competition has never been fiercer.

Disruptive technology and growing automation are also key emerging themes that simply cannot be ignored if a business wants to remain competitive. And client experience is also becoming the most dominant factor over price when it comes to purchase decisions, so focusing on customer experience has never been more important.

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