In 2017, David Neuenschwander was named president of National Automotive Experts (NAE)/NWAN, the company he joined in 2010. Agent Entrepreneur caught up with Neuenschwander to discuss his expectations for the year ahead, the importance of agents to his company’s success, and the demands we place on student-athletes.
AE: What are you working on, David?
Neuenschwander: I have been very busy. I’m working on some very large strategic relationships that came together last year. 2018 looks to be a big year based on dues paid in years past. We’re just trying to get our hands around what to expect in the retail industry this year — our anticipated volume, “Woe is me” from some corners — and how that will impact our core business.
AE: What do you expect from your agency partners this year?
Neuenschwander: Listen, at the end of the day, it all comes down to relationships. That’s who we are and what we do well. While growth is great, and everyone aspires to have growth, the relationships we have the privilege of maintaining allow us to do bigger and better things.
AE: How did you build your network?
Neuenschwander: There’s a high price tag on that secret sauce! I will say that we look at our distribution model and we go about building a value proposition that’s unique in our space. We are in friendly, healthy competition with a lot of companies.
Every TPA will tell you they provide world-class service. When I started back in 2010, I saw a void in our industry. Maintaining and building a relationship with an agent is not all that hard, because there’s a sale involved. You’ve got to like me, I’ve got to pay attention. I wondered what we can do as an administrator to truly help that agent build their business.
We have paid attention to that very deliberately. Are you growing with us? Great. If not, that’s OK. If we can help them stay polished and improve their selling skills, that will promote loyalty to us. Looking back, that’s how we’ve built our business. We have the competency and skillsets to truly help them grow their agencies. We like to build sustainable relationships.
AE: It may be just as true of prior generations, but relationship-building seems to be critical to effectiveness as an executive today.
Neuenschwander: I hang my hat on that, philosophically, every day. We have an opportunity to bring change. With the advancement of technology and the customer’s expectations and demands — that’s not a negative. Customers today are very different from customers two years ago. Forget 10 years ago. I don’t think we have the luxury of slowly changing over the next 10 years. The customers won’t stand for it.
I think that it’s always going to come down to a relationship. In terms of scalability, we’re never going to be a big-box company like Zurich or Resource. We are going to rely on the independent agent who owns that relationship with the car dealer. It’s almost unbreakable when it’s built the right way. I don’t think we’ll ever move away from that philosophy. Agents cater to dealers. Help them get out of their own way. Tomorrow’s customer will be different from today.
And before you ask your follow-up question, no, I have not figured it out yet! But we’ll keep asking ourselves how we can help everyone in our channel deliver a better customer experience.
AE: Do you feel agents are doing a good job of keeping up with the changes you described?
Neuenschwander: Yes and no. There is a good percentage of the agent body that is progressive. They are doing everything they can to put things in place to keep pace with the evolution of the customer.
And, of course, there is a lot of consolidation going on. Mega-agencies are buying smaller agencies. This can be looked upon as a negative, but with the big agencies, those agents have the wherewithal to buy or build the tools dealers need.
Many, but not all, of the one- or two-man agencies don’t have any desire to completely reinvent themselves. So yes and no. Certainly, a large percentage are. But some just want to relive the glory days of old.
AE: Where were you before you joined NAE?
Neuenschwander: I was actually an independent agent, for less than a year. My career started out of college with Universal Underwriters, which is now Zurich. I was an account executive and then regional sales manager. I had P&C and F&I all reporting up to me, 16 direct reports in three states. I never thought I would do anything else but climb the ladder and maybe one day run a company of that size.
They gave me an unbelievable opportunity. But as with everything, things change. In 2008 and ’09, the economy got bad and the company’s strategies changed. I’m a principled guy. I couldn’t buy into the new mantra. I didn’t have a Plan B when I left. So I became an independent agent. I reached out to industry friends, looking for products. Someone told me that, if I wanted ancillary products, I had to talk to Kelly Price, who you know is our CEO.
I made the phone call. I got to know who Kelly is and how she built the company. Six or so months after that, they called and said, “We need somebody. Do you know anyone?” It was extremely fortunate. I don’t even look at it as coming to work. I feel fortunate to have had the success we’ve had.
AE: I know you were promoted to president last year, but I must have missed the announcement.
Neuenschwander: I was, in April. I downplay it. It’s a big deal but not a big deal. Kelly and I work hand in hand. But it was important for she and I to be able to clearly articulate a succession plan for our employees and agents. But I am humbled and honored beyond belief. I pinch myself every day. Has this really happened? But my day-to-day job responsibilities haven’t really changed. If I have to sweep floors, I’ll sweep floors. If I have to meet with an agent, I’ll get on a plane. It all has to get done.
AE: You have worked with a direct sales force and with agents. What are the advantages of the agency model?
Neuenschwander: A couple things jump to mind. One is the expense load. The old adage always proves true: You get what you pay for. As a direct marketer, to increase business, you’ve got to pay good money to get good people. There’s a cost to that, a game to be played. And how many people work out, and how many don’t? The cost of turnover is high. It only works if you have the deep pockets and you’re going to do it on a big scale.
Another point to make is the relationship piece. An independent agent typically does business within a three- to four-hour radius from home. Not that they don’t fly across the country for work, but for the most part, they’re going to stay fairly local. They have the time, without the pressure of corporate objectives, to “waste” building that relationship with the dealer. Not all agents care to do that, but that’s an advantage the agent has over the direct writer.
Here’s an example: I left Zurich as regional manager. We assigned and managed activity by person, by day. We knew how many doors our people had to knock on. Most companies think it’s a volume game that makes you successful. Is it effective? I don’t know. But if I was mandating that my field reps knock on 20 doors, their time to build a relationship would be cut short, and it’s relentless.
An independent agent might knock on one door, five doors, no doors. He or she can take their time. Direct writers typically cannot. It’s a significant advantage to build through agents.
AE: Are you looking for new agents?
Neuenschwander: We are looking. Over the last six or seven years, we have maybe grown by six new agencies. We are very particular. This is, perhaps, a detriment, but it helped us become who we are. We look for a partnership fit. A one-off deal is not a deal for us. We’ll pass. We don’t do it unprofessionally. We just pass. We want to grow with people we would invite to a barbecue with our families and spend the day with us. We’re slow and steady with the agencies we do business with.
AE: Your company has a reputation for giving back. How much of your week is spent on charity work?
Neuenschwander: I don’t know if I can quantity it in hours, but I will tell you this: Being giving and having a caring heart is really a core part of who we are. It goes back two decades. When we hire, we are specifically looking for a cultural fit. Not a working day goes by that we ware not talking about helping others.
Kelly would say it’s not our money; it’s God’s money. That’s who we are and what we do. And it’s also OK if people don’t know. The last thing we’d want is for people to think we do what we do for the attention. If you spend any time with us, you can tell something special is going on here.
AE: What do you do when you’re not working?
Neuenschwander: I don’t have a lot free time, but I spend as much time as I can with my wife of 20 years and our three daughters. The youngest is an exceptional athlete. She plays basketball and soccer. I am very much a supporter of hers. I don’t have time for a big social life. I don’t play golf. I enjoy the game, but not if it means giving up time with family. I do exercise, mostly by riding a bike. I’m always doing something.
AE: Kids’ sports take a lot more time than they did when we played.
Neuenschwander: You know, I played varsity football for three years in high school, at one of the most successful programs in the country, and four years at the University of Central Missouri, all as a full-time student-athlete. I thought we were dedicated. I thought we knew what it meant to sacrifice for a sport. The amount of time demanded of our youth for athletics blows me away. There’s no comparison. It almost makes it not fun.
AE: What position did you play?
Neuenschwander: I was an outside linebacker. The good Lord challenged me heightwise but gave me some wheels. I played at 5’10½” and 210 pounds. If I were 6’1”, we’d be having a different conversation.
AE: Do you still follow the game?
Neuenschwander: I watch college football as much as I can. I’m a huge fan. I still get chills when I see the players running out of the tunnel. I’ve been there, and I know what it means to them to perform and do well in front of a crowd. But I sat out NFL football this year. I have gotten into soccer more, now that my daughter plays at the club level.
AE: Are you looking forward to Agent Summit?
Neuenschwander: Very much so. The Agent Summit has come so far. It was so small the first year, and now, the content, the agenda, the participation … The way it’s turned out, for us, it’s the No. 1 event we attend all year. And we like to learn as well. We sit in on the different courses and try to share that experience. It’s an unbelievable venue, a chance to network with peers who purely and unselfishly want to help each other succeed.
AE: When David Gesualdo started that event, a lot of people told him he was crazy.
Neuenschwander: I recall, and I was one of them. And after attending, I realized that was insanity. He has done a really great job of allowing it to become exactly what the industry needs. None of us are growing without the agent progressing.