Squirrel! How to Focus on Marketing Principle #1 for Your Insurance Agency and Not Get Distracted by Shiny Objects!
Squirrel! It’s very easy in today’s connected world to get distracted by the next shiny object. For kids and teens, it was Pokemon Go, then fidget spinners, and whatever else that will come next. When it comes to marketing for insurance agencies, it can be the newest social media platform, to the newest integrated insuretech products.
Don’t get me wrong, there are many new and great tools coming out by the minute. Some may just help move your agency forward to the next stage of growth, while others may be a distraction that costs you time and money.
So how do you decide what’s the right tool? How do you decide if Periscope, Facebook Live, Snapchat, or that insuretech company that keeps emailing you is the right one to use?
Before you can decide what tools to use, you must first back up and answer the most important question…
“Who is your target customer?”
The basics principles of marketing follow the three “Ms,” Market, Message and Media. In order to develop a successful marketing strategy, the three Ms must be followed in that order. The first M is market. As in, who is your target market, or target customer?
Before we dive into this, let’s quickly discuss another critical marketing foundation. If you are talking to everyone, you are talking to no one. The second M of the three Ms of marketing is message. Essentially, if your marketing and sales message is targeting everyone, you are essentially getting through to no one. The broader your message, the less effective it becomes.
Let’s use this for example, if someone came up to you and asked if there’s a good restaurant in in your town he can go to, what would you say? Most towns have many great restaurants there. How do you begin to offer a suggestion without knowing more? What if instead this person asked, if there is a nice upscale Italian restaurant near the financial district that would be great for a special occasion? The answer gets narrowed down pretty quickly.
Before the right message can be created, the market must first be properly defined.
Thoroughly understanding your target customers is the first critical step to determine how to position your agency in the market. What products, lines of insurance or additional services to offer, how to market and sell effectively, and what marketing and sales strategies work best to build you agency. Essentially, this information drives your entire agency business model.
The ultimate marketing and sales goal is to get the right message in front of the right person. This is the only way to achieve consistent long-term success in your agency, and will make all of you efforts both more effective and efficient. It’s an ongoing process to continue to narrow down your focus and target your marketing message. Once you have an understanding of your ideal customer, the rest of your business plan will fall into place
In addition to business vs. individual insurance, markets can be narrowed down “vertically,” by industry segments like manufacturing, or restaurants, or horizontally, like by business size (revenue or employee count).
When I was with a carrier visiting agencies for the first time, I would ask agency owners who their target market is. Some would be vertically driven, and tell me the industries they focus in. However, a common response I often get is “everyone,” or they say they are generalist. While there is nothing wrong with being a generalist, it is more difficult to develop marketing and sales strategies if a market segment isn’t furthered narrowed down, especially when your agency is establishing itself. Even as a generalist, it is important to drill down further to identify your target market.
If you’ve never drilled down on your target market, don’t know if you have the right target market, or are trying to decide on a target market, the first step would be to conduct a market analysis. Before you start the analysis, let’s look at what an ideal target market looks like.
The ideal target market checklist:
1. You know they have a clear problem that needs to be solved.
2 Large in number. You don’t have to look under a rock to find them
3 They care about it. Large amount of searches on the internet and are looking for ways for better/cheaper/faster, etc.
4 Easy to find them. They are relatively inexpensive to get your name and message in front of.
5 Money to spend. It doesn’t matter how much they like you, but if they don’t have money to spend, they can’t buy it.
6 History of paying for solutions to their problem. Are you selling insurance to a group that doesn’t usually buy or to a group that is always seeking insurance solutions.
7 People you (1) want to help and (2) can help. If you don’t like working with type of clientele, even though you have the knowledge to help them, they should not be your target market.
Now, start by asking yourself the following questions:
1. Who do I want to sell to?
2. Who do I enjoy working with?
3. Which customers types have I had the most success with?
4. Which customer segments/industries do I have most knowledge with?
5. Who do I not enjoy working with?
The next step is to conduct your market analysis. To start with, are you focusing on B2B (commercial insurance, group benefits, etc…) or B2C (homeowners, Medicare, individual life, etc.)?
Then, drill down on the demographics you are targeting.
Demographics: Business to Consumer (B2C)
• Estimated household income
• Home ownership
• Geographic location
• Marital status
• Family and lifestyle
• Technology usage and online habits
Demographics: Business to Business (B2B)
• Size of company and/or industry
• Geographic location(s)
• Number of employees
• Market share
• Years in business
• Revenue (or # of products / product lines)
Next, drill down and begin researching to answer the following questions:
• What is the current size of this target market? (number of prospects, revenue)
• What are the current characteristics and trends for this market?
• What are the critical needs of this potential market?
• Are these critical needs being met?
• What is the geographic location of this market? (are you selling locally, regionally, or nationally)
• Who are the purchase decision-makers and influencers in the primary market? (e.g. business owner, HR director, head of household, etc…)
• Where can you find these customers? (associations, trade groups, etc…)
• Who’s doing the best work servicing this market segment? What are they doing?
There are additional questions that can help you further drill down and understand your target market. To help you with this, we’ve put together a worksheet to help you navigate through this exercise. You can download the checklist here.
Once you have finished the exercise, you can evaluate and see if this is the right market for you. Is this the target customer group you want to serve? Go beyond the revenue potential and ask yourself the following questions:
For example, if you chose a target market segment that’s service intensive, but you don’t possess the staffing resources to assist them timely and properly, this may not be the right industry for you.
Once you know who your target customer is, you can begin working on the next step of your marketing efforts, message. Remember, the three Ms. Market, Message, and Media. In the next blog, we will review how to craft the right message for your target market(s). In the meantime, you can download the target market worksheet to help you better identify and understand your customers.
As always, we’d love to hear from you? Have you shifted your business over time as your discovered who your target customers are? Did you discover anything different after you completed the worksheet? Please comment below.