It’s important for independent insurance agents to find their niche market. There’s plenty of competition in the P&C industry, so agents must take care to find their area of expertise, find an industry that they are uniquely tied to, increase profit margins and efficiency, and stake their position as an industry leader. However, the most successful independent agents will have more than one niche.
The importance of a niche
Because competition is high, you have to be specific in your marketing. It’s a common mistake to think that if you are a generalist – selling to everyone – you will expand your client base. However, all that leads to is sending a message to potential clients that you are unfocused and unsure of yourself. Clients need to feel that you understand them, their industry, and their lives, so if you are marketing yourself too generally to please everyone, you are, in fact, pleasing no one.
Find a few niche markets
If you rely on just one niche market, your agency may see initial profits, but if there are any changes to your target market – like a carrier ceasing to continue an insurance program, new regulations, or changes in consumer habits – then your agency is in danger of failing. You need to find a few target markets so that if one niche is interrupted, you have a fallback while you sort out how to rescue or move on from the loss of one niche.
Brainstorm with the team
If you already have a team of producers and staff for your agency, sit down and brainstorm about potential niche markets. Look at industries where you have a connection, look at the demographics of your immediate area, and look at development and trends to help you zero in on a niche market. The more specific you can get, the better.
Small but profitable
Look for niche markets that are small enough to be overlooked by the big insurance companies but still big enough to be profitable to your business. Look at industry trends and see if you can’t get in on the ground floor and be the first to target a new niche. Look at what millennials are doing, because they are going to be setting industry trends for the next many years. With 80 million millennials forging their path and changing the way we do business in almost every industry, these are the people that you need to target.
Refine your niche market
Once you identify a few niche markets, you can be more specific with your marketing campaigns, and you can refine and personalize insurance options for your niche clients.
Open an independent agency in Colorado, Arizona, and Utah
Affordable American Insurance provides a turnkey business model for a captive insurance agency to transition to the independent world, or for an existing independent agency to find a platform for increased carrier representation and revenue while removing carrier production requirements.