This time I want to flesh out specifically how using a SWOT analysis can help you create an insurance agency marketing plan. To do this, I made up an agency called ABC and wrote a brief SWOT analysis for it on this page. ABC’s book of business is about 80% employee benefits, an asset that I show here as a strength. The other strength I show is ABC’s experienced and knowledgeable sales team. On the other hand, for ABC’s weaknesses I show a low retention rate and poor brand awareness.
In the external environment, ABC sees the Patient Protection and Affordable Care Act and employers’ concerns about the cost of employee health benefits as threats. One other threat I identify comes from ABC’s competitors. They seem to be adding more value to their client relationships than ABC; maybe they communicate with their clients more frequently, offering them a broader range of services perhaps.
What are the opportunities ABC can take advantage of in this environment? Customers need help understanding and dealing with the Affordable Care Act. They also need help dealing with increasing health benefit costs. There is another opportunity in that most employers don’t take advantage of voluntary benefits, which they could benefit from since voluntary benefits can improve employee benefit packages without much if any cost to the employer. Employers can also benefit from wellness and other services that could mitigate their health care costs.
|SWOT||Beneficial (Capitalize)||Harmful (Shore up)|
1. Well-defined target markets in small to mid-size business sector: 20-100 lives.
2. Experienced, knowledgeable sales team.
1. Poor retention rate
2. Low visibility/lack of brand awareness
|External (Your environment)||Opportunities (Invest)|
1. Keep clients informed of PPACA, insurance product changes and impact on clients
2. Diversify group product line: add dental, eye care and other voluntary products; also, add “wellness” consultancy and/or TPA
2. Competitors who add more value
3. Employer’s concerns about spiraling health care costs and regulatory changes
Given the situation I’ve placed ABC in,
- What strengths can it capitalize on?
- What weaknesses should it shore up?
- What opportunities should it invest in?
- What can it do to mitigate the threats that have been identified?
These are the key questions to ask as we begin to formulate some ideas that can be turned into objectives and goals for ABC’s marketing plan. Looking at ABC’s SWOT and asking these questions will help us develop a solid marketing plan for the agency. One helpful technique is to match up the squares in the matrix so that weaknesses and threats can be offset by strengths and opportunities.
An obvious match for ABC is to link employers’ concerns about the Affordable Care Act and rising health care costs with ABC’s expertise. ABC can tap into the experience and knowledge of its salespeople to help clients understand their options and increase client satisfaction.
Now we’re ready to formulate some ideas. We can match up ABC’s “expertise” strength with its clients’ desire for “information” opportunity — as well as the “threat” from the Patient Affordability Act. This of course raises the question, if ABC’s sales team is going to spend more time educating clients how will it make money? One solution or idea might be to go to a fee for services model. Another idea is to educate clients about the benefits of providing voluntary benefits such as health and vision care, disability and critical illness coverage and so on to employees. Yet another idea would be to develop new services such as a wellness consultancy and a TPA.
In my next post, I’ll discuss how to use these ideas to create an action plan and make the work you’ve done with your SWOT really pay off.
To get a blank version of the SWOT template I used, just click here.
To read the third post in this series, click here.