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.
Target marketing trumps shotgun marketing 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.
So how do you find target markets? Here’s 8 potential opportunities :
- Look at businesses or clients you are already serving. Take a close look at your book of business. Do you write a lot of printers, restaurants or artisan contractors? Have you had a lot of success providing life insurance for young families? Is long-term disability a market you know well? Maybe you have only one or two clients of a certain type of business, but others in your firm also a write a few of these clients. Leverage your firm’s reputation as a specialist in this target market.
- Consider emerging industries or businesses, especially in your area. Cyber security has been a growing concern for the past couple of decades and it just keeps getting more important. The benefit of developing deep expertise in one area is that you can use it to leverage the rest of the account. Write all the ancillary insurance as well. With cyber security, banks are an obvious example. But say you provide cyber security insurance for a manufacturer, you could also provide all the other property and casualty needs, including workers comp and employee benefits.
- Did you work in a different industry before you working as an insurance producer? Do you have contacts you made while working in the restaurant business, construction or pharmaceutical sales that could be leveraged into insurance sales? Your knowledge of another industry could be your golden ticket.
- Are you interested in a particular insurance product? I got my start as a broker working as the protege of a producer who was known as Mr. Business Interruption. He knew everything there was to know about B.I. He taught it, lectured about it and was known for his depth of knowledge all over the West Coast. Obviously, he didn’t just write the B.I. He also wrote the rest of the account: property, liability and workers comp.
- Or maybe you have a personal story that makes you passionate about selling a certain kind of policy. One producer tells the story of how his mother would not have lost her business if she had purchased disability insurance to give her the extra income she needed while she couldn’t work for several months. If this was your story, you might become a kind of evangelist for making sure this doesn’t happen to other small business owners.
- Observe the demographics in your area. Life insurance opportunities exist with new families. What about long-term care for aging boomers? One producer looks for seniors who own CDs. He shows them the probate advantages of purchasing a life insurance policy for their beneficiaries, if they have any; or, if they don’t, the advantages of an annuity.
- What do demographic or political trends tell you? The ACA has been a challenge that’s redirected the focus of a lot of agents. Right now the economy looks poised to add new jobs in manufacturing. Is this an opportunity? The demographic shift of baby boomers moving into retirement the past few years has opened a lot of opportunity for agents who want to focus on senior benefits: medicare, long-term care, critical illness, annuities, etc.
- You don’t have to restrict yourself to one target market, of course. You might end up having specializations in several. You might want to work in several related target markets, which is typically the approach that many personal lines agencies take, providing a range of products to families and individuals throughout the life cycle. An agent could start by providing a young man with auto insurance, then go on to provide homeowners, life insurance, long-term disability, long-term care and annuities throughout that individual’s lifetime.
Even if you’re a seasoned producer with a well-developed book of business, think about targeting your future efforts if you have never done so before. You’ll work smarter not harder.