How to succeed in niche market insurance sales

By John Thornton

In as competitive a field as insurance sales, agents and brokers are always looking for ways to increase their sales, profitability and competitive edge. Whether using new marketing tools such as search engine optimization or pay-per-click advertising, or attending industry conferences, successful insurance sales professionals recognize that being content with the status quo is the first step toward declining revenues.

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 prudently, is not without its pitfalls. To be successful, it is important that sales professionals know exactly what to consider 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 a specific market can be targeted. For example, are there certain industries that prevail within your territory, such as health care, manufacturing or high tech? If so, these markets might be viable. Or are there many unions in the region? If so, targeting unions and Taft Hartley plans might make sense.

Beyond territory, does your current client base have a high percentage of businesses in one industry or category such as start-ups, small businesses, self-insured companies, minority-owned businesses, companies with young workforces, older workforces, multi-ethnic workforces, etc.? Having a good idea of the client base composition can be helpful in determining where niche-marketing efforts might be most successful.

Other criteria to consider include:

Your expertise and experience in specific industries based on current clients or work experience prior to becoming an insurance sales professional.
The businesses (and their respective industries) that friends or family members own or work in.
Your interest in becoming a resource to underserved markets (e.g., businesses in rural areas).
The markets that top competitors target and how much of a market share they hold in these sectors.
The type of clients in industries or markets of particular interest based on recreational pursuits, social interests, etc. (e.g., sporting goods manufacturers, entertainment businesses, advertising agencies, clean energy companies, educational institutions, nonprofits).
The carriers with which you currently work and the market sectors they dominate.

Regardless of the niche market selected, it is important to determine whether there would be strong revenue growth potential from targeting the particular niche market. Insurance carriers and underwriters can be helpful resources in providing insight into fast-growing or stable markets and can also provide information as to the insurance products and employee benefits the particular niche market purchases.

Pitfalls to avoid, strategies for success

Along with thoroughly assessing the previously mentioned considerations, there are certain pitfalls to avoid when establishing a niche market insurance sales initiative. A common mistake many sales professionals make when launching a niche market campaign is failing to do their due diligence in terms of researching and getting up to date on the particular market as well as its current news and developments, challenges, risks and exposures. Without that insight, the trust factor in a “specialist” will not be there and niche market sales efforts will not be successful.

To truly position oneself as a specialist serving a niche market, becoming a thought leader in matters of insurance and employee benefits as they relate to that market is critical. Making introductions with editors of industry trade publications serving the niche market and being an editorial source for them is an effective strategy. Similarly, offering to author articles for these magazines on related topics, and writing blogs to post on the agency’s or brokerage’s website and social media channels is valuable in gaining greater recognition within the market.

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 round out effective strategies for success in niche market insurance sales.

Benefits derived

Establishing a successful niche market insurance practice can reap many benefits. It is much easier and less costly to market to organizations within the same sector than it is to market to many diverse entities. Attending a few targeted industry events as opposed to many conferences in multiple sectors is also more cost-effective. If the niche market were properly selected, there is usually less competition to contend with and greater potential for long-term customer loyalty and retention. There is also the value gained in fully immersing yourself in a specific market; developing a better understanding of the challenges businesses and entities within the niche market face, and then being able to address those challenges through more focused product and service sales.

By approaching a niche market program thoroughly and thoughtfully from the start, these benefits, increased revenues, and future success will follow. It is also possible to leverage the 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, sales and marketing, Amalgamated Life. He may be contacted at [email protected].