Target marketing has been a popular marketing strategy for insurance producers who want to expand their business and work efficiently for a long time now.  In fact, I was writing about insurance target or niche marketing more than twenty years ago when I started my first insurance agent marketing newsletter, Insurance MarketShare.

Producers should prefer target marketing over the shotgun approach of selling to anyone who comes your way for several reasons.

Target marketing allows you to use your time efficiently and provides a much better return on investment.  Have you ever tried to sell a product to a customer when you had no prior knowledge or experience with the industry or the product?  The opportunity presented itself and you took advantage of being in the right place at the right time.  Or so you thought.  Then a competitor who specializes in the industry or the product suddenly turned up.  The competitor offered a better product and made a better presentation and you were left feeling maybe a little embarrassed.   But the worst part of all was you had probably invested a lot of time and energy getting up to speed, learning all about the new industry or product so you could make the sale.  With target marketing, producers — and their staffs — use their time and resources much more productively because they know their market.

By focusing your efforts on the markets that you have studied and deal with on a regular basis, you build your reputation and credibility more easily.  When you use sales tools such as newsletters, brochures and Internet marketing, you are aiming at a very defined, comparatively small market.  When you do this consistently, making a series of impressions that underscore your expertise and interest in doing business, you’re building your brand.  Then when the opportunity arises, your prospect will recognize you and they will be much more likely to want to do business with you.

By targeting certain groups, whether demographic or trade groups, you develop premium volume in particular lines with similar risk characteristics.  This can make negotiating with underwriters easier and more efficient.  In some instances, understanding your market well and building a sizeable volume in it may even allow you to leverage your book of business into a special program that you could wholesale to other agents.

Producers who specialize by trade group often comment on how much satisfaction they feel serving a particular industry.  Many come to feel as if they are part of the target industry itself, belonging to its associations, serving on committees with industry members and generally developing a strong bond with the group.  This can offer great personal and professional satisfaction.

In my next post, I’ll explore ways you can find target markets.
 

Almost forty years ago, a couple of advertising guys, Al Ries and Jack Trout, published a book that revolutionized how firms market and sell themselves to the public.  The book, Positioning:  The Battle For Your Mind — still in print and regularly updated — promotes the concept that to succeed, a product or service must achieve distinctiveness in the buyer’s mind.

Essentially, the book asks, how do you distinguish your product or service from your competitor’s?  For insurance producers the question would be, Why should anyone want to buy insurance from you rather than the other agent who wants the business?

There are several strategies agents use to distinguish themselves.

One of the simplest ways to stand out is by offering lower prices. Certain insurance lines lend themselves well to this approach, particularly automobile, term life and other individual insurance policies.  Offering the lowest price might be a great way to start a relationship, but in the long run you probably want customers to rely on you for qualities that endure, such as service, reliability and professionalism.

Providing good customer service is essential to the success of any business, so I’m not sure it’s that much of a differentiator.  Answering phones promptly, conscientiously helping with policy changes and claims, and communicating with clients regularly with phone calls and newsletters are simply what people expect, especially today in our highly customer-service-oriented world.

Being knowledgeable, professional and resourceful will inspire clients to rely on you and help you retain their business. But again, these are qualities people expect or they wouldn’t consider doing business with you in the first place.

Helping the community is not only responsible but a good way to get your name out there.  Whether you sponsor a local Little League team, 5K runs or are just active in service organizations, you want to give back to your community.  Again, I’m not so sure this is as much a market differentiator as it is a communications strategy.

Designing an appealing corporate communications strategy will help you build your brand. Your logo, choice of fonts and colors will build recognition as you communicate to your audience with ads, a professional newsletter, website and other media.

These are all good strategies that may very well help you build a strong position in the buyer’s mind.  In a small community, these qualities alone may be sufficient.

But the most powerful positioning strategy — the one that in the long run will trump the rest if you let the other qualities I listed guide you too — is to specialize in target markets.  By identifying yourself with certain professions or industries or even products, you can stand out in the buyer’s mind in a way that few other agents may be able to.  As Ries and Trout would say, now you have a place in the buyer’s mind that’s not occupied by anyone else.  Instead of having competition, you are the competition. You don’t even need to stand out in the crowd.  Now you stand apart from the crowd.

In my next post, I’ll talk more about target marketing.

As I mentioned in my last post, you might want to mine your correspondence for testimonial nuggets.  Or you can prompt a discussion about testimonials any time you’ve got a satisfied customer on the phone with a statement like this, to paraphrase an opening used by marketing consultant Ed Taylor:

“Bill, I’m glad you’re happy with how all of this has worked out for you.  You know my boss is always asking me for testimonials to post on our website.  Would you mind being a testimonial for me?  Excellent (assuming they agree).  While I have you here, let me ask you just three short questions and I’ll draft something up and send it to you for your approval.”

You want your first question to help clients articulate the principal reason he or she decided to let you handle their business in the first place, to “define the problem” that presumably your agency has addressed to their satisfaction.

QUESTION #1:  What problem or opportunity persuaded you call to us?

Try to get to the root problem here.  Even if they decided to get a quote from you because their brother-in-law recommended you, that’s not really the answer.  They wouldn’t have had to take his advice if there wasn’t something they were dissatisfied about in the first place.

QUESTION #2:  What’s it been like working with us at ABC?

Hopefully, you get a positive answer, not something like, “Well, your people are rude, but you get results.”  On the other hand, an answer like that could be a good management lesson.

QUESTION #3:  How do you feel about the services and policies we’ve provided you?

If the person you’re talking to is just answering in generalities, see if you can’t point them toward some specifics.  If you know you’ve saved them money, or increased their coverage or limits, or they’ve mentioned they like how attentive your service is, focus on eliciting that kind of response.

Try to make it into a story. When you’re done with either the phone call or your correspondence research, paraphrase what they’ve said in a way that expresses the thought more fully, if the comment seems too brief or inconclusive.   Try not to embellish, however.  You really want to retain their intent.  If they’ve answered the three questions thoughtfully, you may have enough material to write a brief story.  A story — with a beginning, middle and end — is always more interesting to read, even a very short one.   After you’ve “crafted” the testimonial in an honest way, send it to them and ask if you have their approval to use it.

Say thank you. Once your customer approved it, post it to your website and place it in your printed promotional material.   You should also send them a handwritten note and a small gift, such as flowers or a gift card.

They require a little work, but solid testimonials can be a vital part of your insurance marketing plan.