Finding a niche market helps agents go from “one of many" to one of the few.
Most insurance agents start out as generalists, providing the most common coverage to serve the most people possible. From a revenue perspective, this makes sense from the outset. But in a market full of generalists, how do you stand out?
Finding a niche market helps agents go from “one of many" to one of the few. A market that has distinctive needs and isn't being properly covered by general policies can be an untapped well of potential clients.
A few examples of unique businesses that require specialized insurance coverage include laundromats, in-home childcares, dog groomers and dry cleaners. It's safe to assume that every insurance agent has at least one of these businesses within their city limits. After the one laundromat in town is covered, how does an agent further develop that specialty if that's the direction they decide to go?
The answer: Digital marketing and communications tools.
These tools make it possible for any agent, based anywhere, to develop a book of business that focuses on a single niche market. With the growing adoption of digital tools, specialists can now target specific clients within that market nationwide. Even if a specific industry isn't huge in your area, through online marketing, you can find and target that industry's businesses operating anywhere.
Massive Revenue Opportunities
The business insurance submarket is predicted to generate revenues of $186.56 billion by 2028 according to a report by Research Dive, a market research firm. This growth is a direct result of business owners recognizing the need to manage risk within their operations.
Most insurance agents see those numbers and create broad strategies to capture as many individuals as possible and have the biggest piece of the pie. But, when an agent is busy trying to sell to everyone, they can miss out on opportunities.
An agent who takes the time to understand the day-to-day operations, the unique nuances of the risk and the potential of a niche market becomes an invaluable partner to those businesses. When a general business owners policy isn't a fit for all the potential liabilities they face, an agent who understands this can be a critical resource because their unique insight helps clients understand industry-specific risks and recommend coverage that protects them.
How to Find Your Niche
Agents who choose to go the specialty route can become a voice of authority within the industry, building a respected reputation in that niche market. But how does an agent start down this path?
For starters, there is no substitute for a genuine passion for a topic. One can start by looking at their current book of business. Is there a cluster of business types? Are there unusual clients who have particularly interesting areas of service? Is there a reason that you have targeted these?
Industries that capture your personal interests are a great place to start. If a specific market emerges as a specialty, the agent can continue to grow that area of their business, start researching new ways to serve that market and deepen relationships with those clients.
Because these businesses are often overlooked or thrown onto a generic plan, they aren't typically sold all the coverage they need to adequately address their risks. Creating custom packages that proactively address all their needs will provide the kind of protection that sets that agent's approach apart.
Businesses want to know they can trust the agent they choose. For example, if a client owns several dry cleaners and their insurance agent doesn't offer a policy to cover the risks associated with storing the cleaning solvents, the client could have a huge vulnerability directly linked to an essential part of their business.
The Secret to Niche Success: Digital Marketing
Focusing on specialized markets requires agents to remove the focus from traditional in-person marketing efforts and embrace technology to stay connected and to build a strong brand. A website with targeted content that demonstrates expertise should be the first step.
After you have an online presence, you can optimize that content for SEO through regular blog posts that again speak directly to your specialty.
Targeted online ads can attract new leads, and once you have leads, automated digital marketing tools can help you maintain contact to nurture those relationships.
These digital efforts allow agents to go beyond their geographical locations to target other businesses within that niche market. Once you convert leads into customers, you can automate the onboarding and communication process to deliver a personalized experience that continues throughout the entire customer lifecycle. Having a personal connection to your clients makes all the difference to businesses with unique needs.
The market for general insurance providers is massive—with fierce competition. Meanwhile, niche markets are often overlooked. Businesses that provide unique services are often the most vulnerable to unforeseen losses. They need an insurance agent who takes the time to create a tailored underwriting plan. Agents who transition from generalist to specialist can leverage technology to maximize their efforts, which can ultimately lead to less competition and potentially higher overall revenue.
Joel Zwicker is the insurance evangelist at Agency Revolution and formerly an agent at one of Canada's largest independent insurance agencies.