Like many industries, the insurance vertical is one that can be heavily impacted by external factors. Gas prices, the cost of auto repairs, and driving behavior can all affect profits in a big way.
How, then, can companies in our space make sense of results that are often closely tied to unforeseen events that they’re unable to influence? How can you know what your company needs to improve or replicate when your near-term financial results can be attributed as much to global economic trends (or the weather) as the actions your company took in a given quarter?
At MediaAlpha, we’ve found that the best path to long-term success has been to ignore fluctuations in our short-term results in favor of an unwavering focus on disciplined, daily execution. By focusing on what we can control, namely everyday execution and a maniacal focus on improving results for our partners, we’re able to stay on course when times are tough and lap the field when the wind is at our back.
Short-term results can be volatile, but playing the long game pays off in the end
Early in my career, it became clear to me that short-term results don’t always tell the full story of whether a company is on the right path.
As a summer intern at a law firm, I remember reading business magazines that would attempt to illustrate why different companies succeeded. But when you read enough of these articles, you realize that the takeaways are often quite inconsistent—one company is thought to have succeeded because it heavily leveraged itself, while another is said to have unlocked its growth by doing the exact opposite. For me, the lesson was that the success narrative is as incomplete as it is alluring, and it’s often quite difficult to pinpoint exactly why any one company succeeds or fails.
At MediaAlpha, we’ve learned that while our short-term results might be heavily influenced by randomness, our day-to-day focus on execution pays off in the long run—even if we don’t know exactly when. That’s why we focus on doing little things each day to help us achieve big, long-term goals, such as building great relationships with our partners and adding long-term value to their businesses.
When outside factors have been challenging, our dedication to execution has allowed us to continue investing while less disciplined companies were forced to pull back. And when the market is good and carriers are investing heavily in customer acquisition, the quality and consistency of our work enables us to maximize our revenue, distance ourselves from our competitors, and build a stronger company that is even more resilient for the next time things get tough.
Building a culture of great execution takes time and determination
It’s one thing to say you’re focused on execution, and another thing entirely to build a culture where team members are able to follow through on this promise. After all, great, everyday execution is hard to measure. Particularly now that we’re a public company, there is always going to be a strong temptation for us to chase short-term results at the expense of laying the groundwork for long-term success.
One way we’ve been able to fight this temptation is to create a culture where team members are always thinking about what’s working and what needs improvement—regardless of the outcomes we see. During tough periods, there have invariably been things we’ve gotten right that we’ll want to replicate moving forward. And in every success, there is always plenty of room for improvement and iteration.
Rather than always celebrating results, we work to celebrate great processes, even when they don’t immediately yield a positive near-term outcome. For instance, if the team does everything right to set the table for a successful sales pitch—bringing the right people into the meeting, getting good early feedback from our contacts at the company, and preparing a persuasive presentation—that execution might raise our chance of winning the deal from 50% to 70%. If we’re unlucky and wind up not getting the outcome we want, we still want our team members to feel good about everything that went into setting us up for success 70 times out of 100.
We’ve also worked to create a culture where our team members know that their responsibility is to always do right by our partners. It may sound obvious, but you won’t be in business very long if you prioritize your own short-term gain in favor of your clients’ long-term objectives. That’s why we never advise our partners to invest in places that won’t pay off for them. Strong, long-term partner relationships are the very foundation of our success, and we don’t compromise them for anything.
Even when times are tough, great execution sets us up for long-term success
While outside factors can sometimes make things challenging in P&C customer acquisition, we always use these periods to improve upon ways we help our partners achieve optimal performance. By strengthening these processes and relationships, we’re able to position ourselves to gain an even greater portion of our partners’ marketing budgets when market conditions improve.