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What is a niche? How does the average agency define one? More importantly, how can you, the typical local independent agent develop one? Although it takes a lot of hard work, and yes, a lot of good fortune, opportunities exist for every independent agent. The problem most agents have in trying to define a niche for their agencies is that they first look in the wrong place. One agent we worked with had spent almost a year with his 'marketing consultant' analyzing available potential markets and the type and extent of existing coverage available to them When we met, they were no closer to their goal than when they started. Find a niche? First, understand how you can make yourself unique.
It may be useful to understand how the great successes of today got that way. Insure a summer camp or a family pony? Sure, call Rhulen. Insure a volunteer fire department? Easy, call Glatfelter. Both recognizable names; each with a successful niche. But they each got there by dint of hard work, building technical competence and seeing a local opportunity to which they could respond uniquely.
In his early insurance career, Art Glatfelter was a volunteer fireman. He recognized solutions to problems that were causing difficulties in insuring volunteer fire companies. With a lot of hard work, he developed information about the specific needs of this market and, with his personal involvement, he was able to talk their language and understand their special needs. He made himself unique among those who were trying to sell to this market.
The Rhulen Agency started in the small town of Monticello, New York, a community of only a few thousand people. But the agency was blessed by the fact that its location in the heart of the Catskill mountains was the location for many children's camps. Similarly, it was then a principal location for the breeding, raising and racing of standard bred horses. From their direct participation in each area, they could 'talk the talk and walk the walk' of the horse owner and camp manager. Familiar with the needs of each market, they were soon recognized for their ability to respond competently to those needs. In short, they became unique among those many agents seeking to sell to these market segments.
The lessons of history are yours for the learning. In the history of the Glatfelter and Rhulen agencies are the seeds of your success. Both made themselves unique, able to capitalize on a typical market right there at their doorstep. Both developed an area in which they participated, in which they had direct, personal familiarity and contacts. Both worked hard to develop a breadth of knowledge about their clients' specific needs. Both ultimately came to be the unique authorities that even their markets followed.
What then is a niche? I believe it is simply what you and your agency are good at. We have one client who has made personal lines its niche. When most companies and agents were fleeing the market, it honed its skills to compete. It developed the competence and confidence to be able to answer all the client's personal lines needs: automobile, homeowners, life, disability. It slowly developed the ability to target the upscale client with the second car, the second home and the special toys. It got so good that the markets were coming to it.
The lessons of history? A niche market is a target group shaped by a common interest or common problems. More significantly, it is one which you and your agency can access and one in which you and your agency can come to understand better than anyone else. Interestingly, accessibility to your target is a lot easier today then when Glatfelter or Rhulen started out. With so many data bases, specialty publications and the internet/world wide web, access to names and the opportunity to put your name before them is far easier. Making the commitment and doing it well are different issues.
If you are going to become a niche specialist you must commit yourself and your staff to the task. There is an old adage that the harder you work the luckier you get. It is a truism here.
You must become tireless in developing information about your client's needs. You must be indefatigable about increasing your technical knowledge and skills in responding to these needs. You must be energetic in communicating your expertise within your agency and to your target group. You must be incessant in providing hard information in regular, short communication. You must be steadfast in your efforts to distinguish yourself and your agency from your competitors.
What is your niche? How do you get started? You personally may not have one. No need for alarm. The answer may lie with a client. To who's special or unique need have you already responded? Or, the answer may lie within the hobbies or interests of those on your staff or among your friends. Who among them subscribes to a special publication or is active in some unusual activity or organization? Can you identify a need in this area? Can you develop a unique response to this need?
It is of course possible that a viable, new niche opportunity isn't immediately available to you. What then? An alternative may be to try to build on something that is already out there. Possibly you and your agency could become the local agent or administrator for an existing program. A letter or call to some of the specialty companies such as Frontier (the Rhulens again) or Markel may open a door. Similarly, there are those agencies that have been built around their programs and may be willing to entertain a relationship in your area. Bollinger with its little league and golf club programs is one example. Or, you may have a contact with the management of some association. By obtaining an 'endorsement' for a product or service that you offer, you may gain an entree to its members and become recognized as their unique provider.
Does niche marketing make sense? Certainly. The successful niche marketer has proved that it can minimize competition, increase agency income and enhance the agency's reputation. But remember, they too face competition and the risk of the loss of a major program can be devastating.
Niche marketers are successful not simply because they discovered a hole in the market, rather because they made themselves unique. The good ones developed a true understanding of their target market's needs and special problems. The successful ones developed the internal expertise and the specific products and services to respond to those needs and problems. In short, they made themselves unique to their market. In my judgment, therein lies the biggest lesson to be learned from those who have become the most successful niche marketers. It is not the target market that makes for a successful niche. Rather, it is the agent him/herself. Its what you do well that can make you unique to a specific market. In fact, by being the very, very best agent in your community, by being recognized as the best agent in town you just may develop the most logical niche available to most agents: your own local community.
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