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.