Formulas For Success With Small Business Owners
Considering how big the small business owner market is in this country, most agents want to know the best way of tapping into it. The way this plays out in the field shows that its a question with a number of answers.
Some experts feel that in order to effectively serve these entrepreneurs, agents must dive into the specific industry they are targeting. Better serving these small business owners means developing a good understanding of their industry and really getting a handle on the issues–meaning non-insurance-sales-related issues–these business owners face.
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But others feel that this can be too risky an approach to take. By putting too much emphasis on any one industry over another, agents could be in danger of limiting themselves and could be subject to the market forces that drive the targeted industry.
Brad Sorensen favors the getting-to-know-the-business approach. The associate vice president and small business market manager for Nationwide Financial Services, Columbus, Ohio, says, “When you look at producers who are selling to specific niches, theyve got a knowledge or appreciation that helps them better understand what the market is like, and the needs that market specifically has.”
Taking this niche marketing approach is one with which John Ferguson has been successful.
Ferguson, who is managing partner for New England Financials Colorado Springs agency, has integrated an industry-specific target marketing approach for his entire agency.
“You really get to know that industry and you can serve them in a way that other agents are just not able to,” he says, explaining that agents who dont have the inside knowledge of their clients industries arent able to match their needs exactly.
John Oliver takes a different perspective. While he says he doesnt “disagree” with the approach stated above, “in certain markets, that just isnt realistic.” Oliver, vice president strategic marketing services for Transamerica, Los Angeles, Calif., says, “I just think its more of an evolution of someones practice.”
While Oliver agrees that many agents have become successful specializing in a certain market, he feels that producers who “become experts in understanding some broader principles about small business issues, such as business survival, succession planning, and disability planning,” will be better positioned for success.
For example, Oliver explains that when a planner is working with a family business that should trigger certain issues that need to be addressed immediately–regardless of the industry. “Are the kids going to take over? Are they trained enough to do that? Do they currently work in the business? Are they pursuing their own careers?
“So whether thats a small restaurant, or a construction company, or a retail firm, a lot of those issues transfer to each other,” Oliver says.
He feels that it takes time for an agent to develop a niche market or specialty industry. “Some people will certainly fall into a niche,” he explains. “All of a sudden the restaurant owner is referring his planner to another one, and another one, and thats one way agents end up becoming specialists in that business.”
Oliver adds that this happens many times by accident, rather than consciously saying, “Thats the business Im going to go after.”
One drawback Oliver cites in focusing efforts on only one industry is that an agent serving that industry is subject to its cyclical declines. “Its much more difficult if someone picks an industry, say construction, and all of a sudden we enter a recession in the building industry,” he says. In these instances, the funds needed for planning may be used to keep the business afloat.