At the Young Brokers Conference: All Hail the New Economic Order

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At the Young Brokers Conference: All Hail the New Economic Order

Gore’s Jackson urges brokers to deal with a growing new customer base

Sarah Cunningham-Scharf on June 10, 2016

“The market is changing significantly—technology, consumer expectations—and brokers can’t do the same thing as the past 100 years.”

So says Paul Jackson, the vice president of sales and marketing at Gore Mutual. He’s talking about a new consumer segment called the “NEO,” or “new economic order,” which brokers can potentially leverage to grow their businesses.

And people were listening in rapt attention at the IBAO’s 2016 Young Brokers Conference Thursday at the Hilton in Niagara Falls. According to Jackson, the first of two main drivers of industry change is the shifting distribution landscape. “This is a short-term, acute change in the structure of brokers. Leaders are retiring, and there’s a new dynamic.”

As well, there’s consolidation—bigger firms gobbling up smaller brokerages. To survive these structural changes, “You’ve got to deal with [them] now, not in the next five to ten years. Customers will be somewhere else by then; direct or some other product while we’re asleep at the wheel.”

The second major driver of industry transformation, Jackson says, is the changing consumer. “This is a chronic, long-term challenge. It’s about looking further and deeper. You can’t look to short-term goals like we usually do in this industry; a changing customer is more significant than being able to provide a quote in three minutes.”

The solution Jackson provides is leveraging the ‘new economic order’ consumer segment. This is a group that was born primarily after the 2008 financial crisis, and coincides with the emergence of the sharing economy. He says, “NEOs are recession-proof—focus on emotional connection and value rather than community.”

In a video he plays to explain the concept, a narrator says there are currently two groups of consumers North American companies can target: the traditionalists, and the new economic order. Traditionalists are motivated primarily by good deals, and care less about personal connection.

Conversely, the NEO consumers need their product purchases to represent their individuality, and base their decisions on a diverse range of factors—price being less important. They search for authenticity, uniqueness, and place greater significance on the companies they buy from rather than the product itself. Examples of companies successfully targeting this segment include Lululemon, Starbucks, Apple, and Chipotle.

Traditionalists represent 52 percent of the market, but the 48 percent made up by the new economic order has a lot of buying power and creates an opportunity for brokers, says Jackson. “It’s all about value and emotion. There is unmet demand from NEOs.”

Not only does it offer the opportunity for business growth, though; brokers can leverage this market segment to ensure sustainability of the industry.

“How do you as brokers in the next era change the dynamics of what we do as a business?” asks Jackson. “We’re not changing direct, or the next fashionable thing. Develop your value proposition, and NEOs offer something sustainable for us to chase.”

 

 

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At the Young Brokers Conference: All Hail the New Economic Order