In a field as competitive as insurance sales, agents and brokers are always looking for ways to increase their sales, profitability and competitive advantage. Whether using new marketing tools like search engine optimization or pay-per-click advertising, or attending industry conferences, successful insurance sales professionals recognize that settling for the status quo it is the first step towards diminishing returns.
Some sales professionals have found niche marketing to be an effective strategy for growing their book of business. Niche market insurance sales, however, if not approached wisely, are not without pitfalls. To be successful, it’s important for sales professionals to know exactly what to look for and how to proceed.
Niche market considerations
First, it is important for a sales professional to consider whether there is a niche market that makes sense to target. This can be determined by reviewing your current sales territory and seeing if it can be targeted to a specific market. For example, are there certain industries that predominate in your territory, such as healthcare, manufacturing or high technology? If so, these markets could be viable. Or are there many unions in the region? If so, it may make sense to turn to unions and Taft Hartley plans.
Beyond territory, your current customer base has a high percentage of businesses in an industry or category, such as start-ups, small businesses, self-insured businesses, minority-owned businesses, businesses with a young workforce, labor force, multi-ethnic workforce? , etc.? Having a good idea of the composition of your customer base can be helpful in determining where niche marketing efforts can be most successful.
Other criteria to consider include:
Your experience and expertise in specific industries based on current clients or work experience prior to becoming an insurance sales professional. The companies (and their respective industries) that friends or family own or work for. Your interest in becoming a resource for underserved markets (eg, businesses in rural areas). The markets that the main competitors are targeting and what market share they have in these sectors. The type of customers in industries or markets of particular interest based on recreational activities, social interests, etc. (eg sporting goods manufacturers, entertainment companies, advertising agencies, clean energy companies, educational institutions, non-profit organizations). The operators you currently work with and the market sectors they dominate.
Regardless of the niche market selected, it is important to determine whether there would be strong potential for revenue growth from targeting the particular niche market. Insurance companies and underwriters can be useful resources for providing information on stable or fast-growing markets and can also provide information on insurance products and employee benefits for particular niche market purchases.
Pitfalls to avoid, strategies for success
In addition to thoroughly evaluating the considerations mentioned above, there are certain pitfalls to avoid when establishing a niche market insurance sales initiative. A common mistake many sales professionals make when starting a niche market campaign is not doing their due diligence in terms of researching and updating the particular market, as well as its current news and developments, challenges, risks and exhibitions Without this insight, the trust factor in an “expert” will not be there and niche market sales efforts will not be successful.
To truly position yourself as a specialist serving a niche market, it is critical to become a thought leader in insurance and employee benefits related to that market. Making introductions to publishers of industry trade publications that serve your niche market and being an editorial source for them is an effective strategy. Likewise, offering authors articles for these magazines on related topics and writing blogs to post on the agency or brokerage website and social media channels is valuable for gaining greater market recognition.
Forming strategic alliances with niche market industry associations, business groups and other insurance professionals and carriers can also be helpful in securing referrals and more opportunities. Offering to speak at niche market conferences and presenting webinars further expand effective strategies for succeeding in niche market insurance sales.
Derivative benefits
Establishing a successful niche insurance practice can reap many benefits. It is much easier and less expensive to market to organizations in the same industry than to market to many different entities. Attending a few specific industry events rather than many conferences in various sectors is also more cost-effective. If the niche market has been selected correctly, there is usually less competition to contend with and greater potential for long-term customer loyalty and retention. There is also the value gained by fully immersing yourself in a particular market; develop a better understanding of the challenges facing companies and entities in the niche market, and then be able to address those challenges through more focused sales of products and services.
By approaching a niche market program thoroughly and thoughtfully from the beginning, these benefits, increased revenue and future success will follow. It is also possible to leverage success in one niche market to establish a second niche market in an aligned field for greater growth opportunities.
John Thornton is executive vice president of sales and marketing at Amalgamated Life. He can be contacted at [email protected].
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