Insurance marketing niche analysis and planning for sales people

Marketing Niche Analysis & Planning

for Insurance Salespeople

Introduction

Purpose

This document was written to help agency sales people plan how to sell insurance in a targeted manner as a result of developing professional relationships with prospects who become clients as a result of one or more contacts by agency sales people. The illustrations and questions checklist should be used to prepare a personal business development plan for agency salespeople. Such plans should include goals, routines, and schedules reflecting how one or a few market niches will be prospected/solicited.

Method

The following illustration shows how any type of insurance purchasing market can be segmented and arranged in a coordinated manner to list different types of prospective clients and describe how they may be approached one-on-one and in groups. Types of sales leads are listed on the left side. Types of prospecting activities and settings are listed across the top.

Exhibit A

Explanations

As illustrated on the left side of Exhibit A, all sales leads can be divided into one of two groups based upon how familiar the prospecting sales person and her/his company are affiliated with prospects. In most industries the term cold calling is meant to suggest little or no pre-contact affiliation with a prospect. Hence the above illustration shows there are two major types of sales leads: Cold and Warm. Warm sales leads can be either current customers, past customers, or associates of customers. Cold sales leads can be classified in many ways. This paper describes cold sales leads as being:

1. logical users who are currently using products/services which are similar to what the planning salesperson wants to offer prospects,

2. nearby prospects who are convenient to the planning salesperson geographically,

and

3. competitors’ customers who are likely to appreciate the planning salesperson’s products and services but will probably think they are satisfied with incumbent agents’ products and services.

As illustrated across the top of the matrix in the above figure, all sales activities can be divided into direct and indirect actions*. These can be further divided into one-on-one and group settings.

* Indirect actions are considered to be efforts taken in supportive roles. Direct actions would include any effort made to inform someone or commit a prospect to take action. Indirect actions are things like making sure events are well attended and see to details at a professional association meeting where you do not play a lead role.

Timing

The following illustration shows how frequently actions should be taken to contact prospects to encourage them to trust the planning salesperson enough to communicate constructively, exchanging enough information and securing commitments thereby producing win/win agreements.

Exhibit B

A Questions Checklist

Questions – an outline

The following outline is one of many ways a checklist might be composed for developing and evaluating a prospecting program for insurance salespeople:

I. Warm sales leads – questions concerning related/affiliated prospects and clients

1. Current customers – questions concerning relationships with existing clients

a) direct one-on-one meetings – questions encouraging development and evaluation of how customers should be contacted & served individually

b) direct group meetings – questions encouraging development and evaluation of how groups of customers should be assertively served and lead as targeted market niches

c) indirect one-on-one meetings – questions encouraging development and evaluation of how customers should be contacted and encouraged subtly

d) indirect group meetings – questions encouraging development and evaluation of how groups of customers should be supported indirectly

2. Past Customers – questions concerning revival of relationships with past clients

a) direct one-on-one meetings – questions encouraging development and evaluation of how old customers should be contacted and solicited individually

b) direct group meetings – questions encouraging development and evaluation of how groups of former customers should be assertively served and lead as targeted market niches

c) indirect one-on-one meetings – questions encouraging development and evaluation of how former customers should be contacted and encouraged subtly indirectly

d) indirect group meetings – questions encouraging development and evaluation of how groups of former customers should be supported indirectly

3. Associates of customers – questions concerning developing relationships with existing clients’ associates/affiliates

a) direct one-on-one meetings – questions encouraging development and evaluation of how current customers’ peers, subsidiaries, sister companies, etc. should be contacted and solicited individually

b) direct group meetings – questions encouraging development and evaluation of how groups of current customers’ peers, subsidiaries, sister companies, etc. should be assertively served and lead as targeted market niches

c) indirect one-on-one meetings – questions encouraging development and evaluation of how current customers’ peers, subsidiaries, sister companies, etc. should be contacted and encouraged subtly indirectly

d) indirect group meetings – questions encouraging development and evaluation of how groups of current customers’ peers, subsidiaries, sister companies, etc. should be supported indirectly

II. Cold sales leads – questions concerning prospects who have not been customers and are not associated with any of our customers

1. Logical users – questions concerning how to develop relationships with logical prospects who are very likely to need our products/services

a) direct one-on-one meetings – questions encouraging development and evaluation of how likely prospects should be contacted, informed, and solicited individually

b) direct group meetings – questions encouraging development and evaluation of how groups of likely prospects should be assertively solicited and lead as targeted market niches who are unfamiliar with our products/services

c) indirect one-on-one meetings – questions encouraging development and evaluation of how unfamiliar prospects should be contacted, informed, and encouraged subtly

d) indirect group meetings – questions encouraging development and evaluation of how groups of unfamiliar prospects should be informed and supported indirectly

2. Nearby prospects – questions concerning how to develop relationships with logical prospects who are very likely to need our products/services

a) direct one-on-one meetings – questions encouraging development and evaluation of how geographically convenient prospects should be contacted, informed, and solicited individually

b) direct group meetings – questions encouraging development and evaluation of how geographically convenient prospects should be assertively solicited and lead as targeted market niches who are unfamiliar with our products/services

c) indirect one-on-one meetings – questions encouraging development and evaluation of how geographically convenient prospects should be contacted, informed, and encouraged subtly

d) indirect group meetings – questions encouraging development and evaluation of how geographically convenient prospects should be informed and supported indirectly

3. Competitors’ customers – questions concerning how to develop relationships with your competitors’ customers who may or may not be happy with what your competitors have been selling

a) direct one-on-one meetings – questions encouraging development and evaluation of how competitors’ customers should be contacted, informed, and solicited individually

b) direct group meetings – questions encouraging development and evaluation of how competitors’ customers should be assertively solicited and lead as targeted market niches who are unfamiliar with our products/services

c) indirect one-on-one meetings – questions encouraging development and evaluation of how competitors’ customers should be contacted, informed, and encouraged subtly

d) indirect group meetings – questions encouraging development and evaluation of how competitors’ customers should be informed and supported indirectly

Customer relationship management “CRM” is a relatively new marketing term is a broad term that covers concepts used by some marketing and sales professionals to manage how well their companies serve and communicate with customers, including collecting, storing and analyzing customer information. Please find out what it should mean for your organization. These questions should help enable insurance salespeople to develop and manage profitable relationships with customers, thus generating residual income for several years. This is the “people” part of our business. It should be targeted by sales people after they earn credibility by becoming subject matter experts as a result of learning principles and processes. Principles, processes, and people should be learned and managed to create wining marketing strategies, goals, plans, tactics, and actions.

Questions – a sampling

Here is a very brief/incomplete checklist composed of questions concerning warm sales leads:

1. Examine your service efforts from your customers’ points of view so that you can learn and then educate your clients concerning the penalties (pain) that could result if that particular service is not bought from you. Have you done your homework by answering the following questions:

a. What services do you offer?

b. Do you proactively find ways to wow your customers? Do you update Workers Compensation loss experience documentation when experience modifiers can be lowered? Do you make sure insurers reply to loss reports and claims promptly? Do you offer payroll audit reviews to prevent your clients from being hit by increased WC premium increase? Do you offer payroll audit reviews to your clients to provide early detection of increase premiums?

2. What should be done in one-on-one meetings with the 20% of our current customers who are producing the majority of our business?

3. What should be done in one-on-one meetings with the top five or seven customers who should be using our products/services more?

4. How can you be first to your clients and prospects with late breaking news about important changes in coverage, new risk management techniques, changes in state laws affecting their risk exposures, and new types of insurance or new markets offer their coverage in smarter ways?

5. What formal actions should be taken during formal group meetings to solicit more business from our clients?

6. What informal actions should be taken during informal group meetings to solicit more business from our clients?

7. What formal and informal group meetings should be attended to seek opportunities to contact old customers in an effort to meet with them later?

8. Should you try to persuade your agency’s lawyers, accountants, architects, engineers, bankers, and financial advisors to agree to relay your information about risk management (e.g., insurance, self-insurance) to their clients? This can be a source of referrals.

9. What formal and informal group meetings should be used as venues for soliciting business from our customers’ associates/affiliates?

10. Do you speak at public meetings and invite your competitors’ clients to those meetings?

Here is a very brief/incomplete checklist composed of questions concerning cold sales leads:

1. Examine your service efforts from your prospects’ points of view so that you can learn and then educate your prospects concerning the penalties (pain) that could result if that particular service is not bought from you. Have you done your homework by answering the following questions:

a. What services do you offer?

b. Do you proactively find ways to wow your prospects? Do you offer to update Workers Compensation loss experience documentation when experience modifiers can be lowered? Can you make sure insurers reply to loss reports and claims promptly? Can you offer payroll audit reviews to prevent your clients from being hit by increased WC premium increase? Do you offer payroll audit reviews to prospective customers as a loss leader?

2. What should be done during one-on-one meetings with the most attractive 20% of our prospects?

3. How can you be first to prospects with late breaking news about important changes in coverage, new risk management techniques, changes in state laws affecting their risk exposures, and new types of insurance or new markets offer their coverage in smarter ways?

4. What should be done during one-on-one meetings with prospects who are located near our offices?

5. What formal actions should be taken during formal group meetings to solicit our neighboring prospects?

6. What informal actions should be taken during informal group meetings to solicit our neighboring prospects?

7. What formal and informal group meetings should be attended to seek opportunities to contact neighboring prospects in an effort to meet with them later?

8. Should you try to persuade one or more groups of professionals (e.g., lawyers, accountants, architects, engineers, bankers, financial advisors) to agree to relay your information about risk management (e.g., insurance, self-insurance) to their clients? This can be a source of referrals.

9. What formal and informal group meetings should be used as venues for soliciting business from our competitors’ customers?

Summary

Randy Schwantz, on pages 141 to 155 of Breaking the Sales Barrier, teaches insurance salespeople five steps to drive a wedge between prospects and their incumbent sales persons so they close more sales:

1st. Make the prospect aware of what he/she is missing out on and feel the need for change.

2nd. Examine your proactive service from the point of view of the customer so that you can educate your prospect on the penalties (pain) that could result if that particular service is not bought from you.

3rd. Encourage the prospect to expand his vision of the benefit you've found he/she is most interested in. Tell how another client enjoys that benefit. Tell how your team provides such great service.

4th. Review what the prospect wants and how your benefit can be had, avoiding use of "I" and "me" if the plan is implemented. Making sure he hears his own words.

5th. Ask the prospect what he/she would like to do now. Don't ask for the sale. Get invited to help the prospect.

The author of this paper hopes this document successfully argues the need for a better process for development of personal business development plans for insurance sales people. Please use this information to improve your business development efforts by creating a checklist to evaluate your personal prospecting program. Please contact John Gilleland at jtg1@profitableunderwriting.com if you have any questions, comments, or corrections.