Riches in Niches - How To Become A Trusted Advisor & An Effective Insurance Producer

If you are new to insurance sales, there is a lot of pressure to produce. The vast majority of insurance producers (young and old) are too focused on price and filling the top of the funnel.

Asking buyers to allow you to quote because you can save them some money is the #1 pitch producers make...and it doesn't work. Why?

Because you are competing with other producers saying the same thing

Your buyers dont believe you!

You are extracting value and not delivering any (in other words...you are wasting your buyers precious time, and since time is money, time with you is an expense. Think this way instead!)

Insurance is a grudge purchase (I believe the credit for this term goes to Patrick Kelahan ) No one is camping out or lining up to buy insurance. Because of this, you could create value by delivering cheaper insurance, but is it cheap for a reason or are you really that skilled?

An alternative to this is to focus your entire sales practice on creating value first. Business exist NOT to make money. They exist to create value primarily and then to be creative on how they monetize and capture some of the value they create. So while you can create value by lowering the costs of insurance buyers, you will struggle to differentiate yourself from the sea of producers saying the same thing AND you will struggle to capture a meaningful proportion of that value AND WORSE, your relationship with your buyer is completely based on being able to provide cheap insurance, making you vulnerable to losing the business to the next producer claiming they can lower your client's insurance costs.

THE BETTER WAY

Dont think of yourself as a insurance salesperson primarily. Transcend to something significantly more valuable - being a trusted business advisor.

Being a trusted business advisor means what it says. You provide business advice. The advice is so good, your clients trust you.

That's how you create value!

And you monetize that value, by being the trusted person to put the insurance program in place.

Let me repeat - as a producer, you should be creating value by generating insights, wisdom, advice, that your prospects and clients want AND NEED to run their businesses (or lives). And you get paid by putting the insurance in place. BY creating value above and beyond the insurance transaction, you are capable of putting the right insurance programs in place (with the right coverages, and right premiums!) but more importantly, your advice adds value to the relationship. Sure, they might be able to find cheaper insurance from someone else, BUT, by firing you...they lose access to that wisdom you bring...which harms their businesses, and is more costly than the savings from cheap insurance.

Riches in Niches

In order to execute this you need to become very very wise, which means you will need to focus on something you can go a mile deep on. You will need to find a niche where you can build, develop, and market, unprecedented insights.

Just today, Mark Flippen of LION Specialty posted a marvelous roadmap on how LION has done it. Rule 1 - "Hyper Focus on a Niche: ➜ Get so good at your clients' world that you can spot their challenges before they do (and know exactly how to solve them)". Think of the contrast in proposition between a traditional producer and a hyper focused niche producer

Traditional Producer: "Would you be willing to let me quote your insurance and see if we can find some saving? We have been able to find savings of 10-25% for many of our clients"

versus

Niche Producer: "Have you seen that bill filed in Congress that affects Chinese supply chain regulations? We think this could harm your business, and if you have traditional policy wording, you might become liable for losses that inevitably arise" We are experts in this and can advise you if you we determine whether you are covered or not. Would you like to proceed?"

The differences are not even close.

Finding Your Niche

If you are looking to make this transition, then your niche should be an area that:

You have some propensity of extreme interest. What are some areas of business where you just are curious, fascinated, and can nerd over? You may already have some general expertise that you can leverage (like a degree in engineering or cyber security or law). BY having an extreme curiosity, this will fuel you when the inevitable down times come. Those ruts, that will drive others out, but because you arent in it just for the money, you have an internal fountain of curiosity, and fascination about the niche, that you would study it for free

There has to be a there there. Does this niche have enough scale to support you? You are about to embark on some meaningful, heads-down work. You should be compensated for that effort over time. If the market you are going after is too small to matter, you may want to find another niche.

How crowded is this niche? You may not be the first nerd in the space. If you are competing with loads and loads of other producers, you may struggle to get noticed (especially if they taker a thought leadership approach). You want to find a niche that has scale (at least potentially) but is not crowded

There are legit risks in that niche. Restaurants have risks, lots of them. A retail space that trades baseball cards likely has a lot fewer risks. You can still niche both, but as you are about to see, with risk comes opportunity to stand out

Ways to Create Value in Your Niche

Let's assume that your niche is restaurants. You love food. You love the business model. You watch reality TV shows about restaurants. You chew your fingernails waiting for the next Michelin list. You are all-in. Here are some ways that you can position yourself that deliver actual value to the businesses you wish to prospect:

Risk management. Restaurants are risky businesses. Food poisoning, delivery incidences, slip and fall, fires, and on and on. To won this niche, you need to be able to speak risk management to your prospects and clients. Can you compare and contrast the different types of sprinkler systems? Should a restaurant have their own delivery drivers, or out source to Door Dash? How are your restaurant clients procuring food and how do they know these firms are not cutting corners and introducing bad chicken into the food kitchen? Do they serve liquor and how do they prevent customers from over indulging and then driving away? Think of all the ways you can lower their risk, protect their business, which will ultimately lower their risk transfer costs.

Research analysis. What can your insurance clients learn about the restaurant business in general? Are there white papers, research reports, podcasts or webinars where you can summarize research that you have done that can make their businesses better? What are some lessons from public firms like McDonalds that could apply to your clients? How will new laws or regulations affect businesses?

Marketing. How can you help your clients promote their businesses better? Yes they are on social media trying to get more diners, but how can you help them in the local community get more access to other business professionals, banks (loans and credit), realtors (for when they are ready to open the next restaurant), investors and more.

There is no doubt that owning a niche is the way to build a lasting and successful and effective insurance business. The challenge is the time it takes tdo this. It will not happen overnight and in the near term, you need to put food on the table. If you are going to go down this road, you will need operational capital to support you as you execute this. The urge will be to do BOTH, build a niche and get any lead any way possible. I would counsel you against this just because building a niche will require your full focus, and if you are able to generate leads in any other way, it will be tough to turn away from that exercise, even when you realize it was not worth the effort you put in.