Is Your Agency Effectively Targeting a Diversifying Consumer Base?

Roughly half of independent agencies have not taken any specific steps to meet the needs of changing consumer markets, according to the 2014 Future One Agency Universe Study.

But in a slight 2% increase over 2012 figures, 16% of agencies report offering coverages that meet the needs of significant or growing groups, and the firms that join (19%) or contribute (18%) to business and civic groups associated with significant or growing groups have increased by several percentage points.

And on the whole, new agencies continue to be more diverse-minded in their marketing efforts, and small firms tend to be more likely than larger firms to target at least one specific minority group. Small agencies are especially likely to target African-Americans (28%) and Latinos or Hispanics (27%) and are most likely to allocate marketing funds toward providing materials in multiple languages in addition to employing personnel who can speak languages other than English.

When marketing to one of the minority populations for whom English is not a first language, employing multilingual agency personnel can be critical. According to the latest U.S. Census Bureau data, 21% of the country’s population speaks a language other than English in the home, and while most of those residents do speak English well, their ability varies greatly. The ability to converse in a prospect or customer’s language of choice will remain important as long as visits and telephone calls are the primary means of keeping in touch with them. And the 2014 Agency Universe Study confirms that calls and personal visits continue to top the list of communication methods, although they have declined by as much as 16% since 2012.

Likewise, providing written materials in a demographic target’s language can be crucial to marketing to some minority populations. Of the responding agencies, 11% report supplying written materials in other languages, down from 17% in 2012. Only 3% provide website materials in other languages, and only 2% provide multilingual functionality on their websites or portals.

In personal lines, less than half of agencies target a specific demographic group from a marketing perspective. Of the responding firms, 21% market to the Latino and Hispanic population. According to the latest census data, those who speak Spanish at home represent 13% of the U.S. population, but only 5.6% of those residents speak English less than “very well,” lowering the need for Spanish-speaking personnel for those agencies targeting them.

On the other hand, 10% of the responding agencies target Asian Indian and other South Asian-Americans, and 8% target East Asian-Americans and Pacific Islanders. Census statistics show that fewer than half of the U.S. populations who speak Korean, Chinese or Vietnamese also speak English well—which means marketing to those groups would improve with agency personnel who speak the Asian languages used by an agency’s client base and by the availability of printed material or website pages in those languages.

Other groups targeted in personal lines include:

  • Generation X (born between 1966 and 1976): 29%
  • Millenials (born between 1977 and 1994): 22%
  • Women: 20%
  • African-American and black: 17%
  • Lesbian, gay, bisexual or transgender: 9%
  • Native American or Alaska Native: 7%

For commercial lines, responding agencies target business owners with demographics similar to those targeted for personal lines. Most firms did not cite a specific demographic target for commercial lines, and 59% reported targeting no minority group whatsoever.

  • Generation X: 28%
  • Millenials: 19%
  • Women: 19%
  • Latino and Hispanic: 18%
  • African-American and black: 18%
  • Asian Indian or other South Asian-American: 9%
  • East Asian-American and Pacific Islander: 9%
  • Lesbian, gay, bisexual and transgender: 9%
  • Native American or Alaska native: 8%

The Diversity Task Force works on behalf of Big "I" members to create awareness of the opportunities and benefits available to agencies and brokers that embrace diversity.

Juan Padron is chair of the Big “I” Diversity Task Force.