Competitive Marketing

Our insurance companies give us lists of their desired markets every year. They claim that they have competitive products and pricing to permit you to sell to those markets. But those markets are suspiciously similar form most carriers. Why?

Desirable market segments are similar for most carriers because they are concentrated on the market segments that they feel are most profitable instead of on the segments for which they have advantageous or differentiated products. Their goals are to have enough agents marketing to enough of the profitable targets that they will sell a large enough volume of business in every year to participate in that market’s profitability.

If carriers have 10 targets on a wall whose penetration would result in underwriting profitability, asking their agents to fire at every section of the wall with machine-gun volumes of sales opportunities will necessarily result in the acquisition of the 10 targets. Unfortunately, the cost of the “ammunition”, agency producer and marketing cost and time is sponsored by the agencies, not the carriers. When the carriers “hide” their truly competitive markets among dozens of “targets” on their Market Preference Lists each year (or when they have NO real unique or competitive products), the agents are left with the extreme expense (in time and money) of trying to sell the common products to common prospects.

While we have no problem increasing our writings, how would you like to be a car salesman who sells the “generic” car? This car has four wheels; seats and a steering wheel JUST LIKE EVERY CAR. It looks like every other car. It has the gas mileage of the average car. It has the same engine and pick-up as every other car.

How many cars would you sell? If there were 100 dealers selling the same kind of cars in the same way that you did, you will sell 1% of all the cars sold. If 10,000 people in your area bought cars this year, you would sell 100 cars.

The goal of the car manufacturers is to differentiate their cars sufficiently that more than an equal percentage of car buyers will be tempted to purchase their cars. The goal of the dealers is to market aggressively enough and differently enough from their competitors that they will get more than their equal percentage of all cars sold from the manufacturer that they represent. They leave the differentiation of the product to the manufacturer.

How does this example compare to our insurance products and the industry? Unfortunately, much of our P&C product offering, both personal and commercial lines, is generic in nature. Even those companies that try to differentiate their products do so very poorly. This leaves the agents to try to market a generic product in a local environment to dozens of targets (on the carriers’ “lists”) without any advantage or uniqueness to separate their products from the other similar carriers’ products in the market.

The answer is to diplomatically winnow through the low level underwriters and marketers in each carrier to find those few people who are marketing oriented and to promote carrier-based marketing of differentiated products.

We help agents develop integrated, long-term marketing strategies and programs. We use the carriers to generate the Points of Differentiation that we can use for the agents to penetrate prospects. In many more cases than we expected, the only thing the carriers can offer is relatively poor, generic marketing pieces that tout the image of the carrier more than the unique features of the products. Many underwriters are drones looking for reasons NOT to write business more than acting like production underwriters whose functions should be to help agents to identify qualified prospects. Production underwriters spend much time educating their agents regarding the best ways of approaching prospects with the carrier’s products. How many of your underwriters would you identify as Drones and how many are really Production Underwriters?

If you are lucky enough to have local or regional representatives of your primary carriers who are fully knowledgeable of their own products and the differences between theirs and other, similar products, you have the core of a great marketing relationship.

Your job is to develop that relationship by having that representative, whether underwriter or marketer, teach you enough about the points of differentiation to create a substantive marketing program. That marketing program is NOT a letter sent to prospects. It is certainly NOT a passive marketing program. It IS a series of four to five contacts per year for multiple years with each pre-contact being followed up by what our producers are supposed to do – visit the prospect and make friends. Imagine the impact on prospects if you were to visit them five times each year while their existing agent sees them once (if they are lucky).

But just as we don’t enjoy visits from our carrier representatives with no agenda just to be friendly, neither do our prospects. Everyone is busy and insurance is always seen as a cost and an interruption. Each pre-contact must be directed to a Point of Differentiation or an Added Value of dealing with your agency, the carrier, or the product and the visit, thereafter, should educate the prospects regarding the subject of the pre-contact letter.

What happens if you have NO carriers who can give you more than a list of 40 preferred markets and have no points of differentiation that you can use to influence the prospect to become your client?


As insurance has become more generic, the industry has responded with dozens of value-added products and services that agents can use to gain entry to prospects and teach them the value of converting from their existing insurance provider. These are not gimmicks. They provide services and products that are related to protecting the prospects’ assets that have not been offered to them before.

Whether the myriad of services that are bulked under the generic title of Loss Control, non-insurance related asset protection like Federal Regulation Audit and Compliance, agency assistance with the creation and management of the prospect’s website related to personnel benefits management, or your assistance with their budgeting and planning functions to better plan for and control insurance costs, most agents simply have no knowledge of these tools. And imagine your advantage against most direct writers by using these tools! These must be done in person and on-sight. That benefits the local independent agent if he has the wherewithal to understand and provide these products and services.

The best approach to competitive marketing is a combination of product differentiation, a strong and consistent marketing program applied diligently and a set of ‘cutting-edge’ products and services to act as differentiation tools for the independent agents.

These tools have been in use for many years by larger agents for large commercial accounts. But there is no reason that they cannot be accomplished for medium sized commercial accounts and individual Centers of Influence that direct much more revenue to an agency than represented by their own insurance premiums and commissions.

Growth is not measured in terms of premiums or even commission growth. These are influenced by market conditions and can change year-to-year. Agency growth and health is measured by retention rate and growth of its number of clients. That growth is caused by the maintenance of strong relationships with the clients you already have and the aggressive and strong marketing programs to prospects regardless of current marketing conditions.

Today’s market is actually an EXCELLENT one for aggressive marketers because every person and business in the U.S. is rightfully concerned about his bottom line and must pay attention to the value received for his insurance dollar. If you can help the prospect with tools and unique products that can help him and give him better value for the premium he spends, you will gain a positive relationship that will last for many years. A Product Differentiation and Agency Differentiation marketing program will give you entry to many more prospects than the “we can get it for you cheaper” program that is the core of the price-driven agencies and companies that dominate the insurance map today.