Having cut its sales team down in size, PowerPlace must be looking for more efficient ways to boost growth. Can it follow parent Towergate’s ambitions to expand overseas?
It emerges today that software company PowerPlace is to trim its sales force by one-quarter and attempt to roll staff into other parts of the business. PowerPlace is remaining tight-lipped, but perhaps what its decision shows is the difficulty in prising brokers away from their current software systems in a very competitive marketplace. Is it really cost-effective to have numerous sales people on the road in a crowded market?
Maybe the real money-earner for software houses is expanding the number of products and size of the premiums they handle, while persuading brokers to use their platforms through good service and telephone support. After all, e-trading is naturally set to expand its marketshare, according to consultants BCG (see chart below).
PowerPlace is not a massive business: its nine-month turnover to end of September 2011 was £1.5m, which equates to around 1% of Towergate’s group turnover. If PowerPlace is really to become a major part of the Towergate flotation, then expanding abroad must surely be the answer. Last year, Towergate founder Peter Cullum talked about breaking into the USA and Chinese markets. Surely there can be no better growth story than that.
Cameron goals may face challenges
If there’s one thing about prime minister David Cameron you can be certain of, it’s that he talks a good game. Yesterday, he waxed lyrical about stamping down on the UK’s over-the-top health and safety culture and, more importantly for insurers, battering down lawyers’ fees.
The show is already on the road with the Ministry of Justice consultation on capping lawyers’ fees. That’s the good news. The bad news for insurers - not legal expenses firms - is that the Jackson Review could face intense scrutiny in the House of Lords, resulting in delays or amendments.
Secondly, curtailing healthy and safety legislation is more contentious, as the EU has a remit over health and safety. Also, you’re talking about workplace protection. Cameron’s uneasy bedfellows, the Liberal Democrats, may reject the notion of stripping away protection from workers.
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