Segmenting the market and focusing on primarily one or two customer groups has historically been a winning strategy in a number of other industry sectors. Market segmentation also can be applied to insurance, benefits, and voluntary benefits. While there are a number of ways to segment the characteristics of a potential client base, many firms successfully choose to focus on a particular employer industry sector. Such a focused approach can result in a much deeper understanding of the business issues facing employers in that particular market sector.
It can also lead to the creation of unique product or service offerings, or meaningful value-added services. Ultimately it can translate to lower customer acquisition expenses and higher profit margins as the addition of each new client relationship becomes accretive.
Why develop this approach?
- Every vertical market has its own language and terminology
- Each industry views itself as having unique challenges they face
- Decision makers tend to stay within the same industry when they change jobs
- Since companies compete for the same labor, they want to understand what the “other company has that they do not”
- Proven strategy in other industries – property casualty, life insurance, and non-insurance vertical markets as well
- Potential for unique product and service offerings
- Focused marketing outreach
In the last two years, we have applied this marketing strategy to our own benefits practice at Selden Beattie Benefits Advisors and it has been working rather well. It has made us much more efficient in our marketing outreach efforts. The bottom line is that market segmentation can be a very powerful marketing strategy. It requires focus and dedication. And it will require an investment of time and energy to overcome the initial sales inertia that seems to be ever-present when launching new marketing initiatives. So it’s not for everyone.
I’d like to hear from others about their efforts involving market segmentation. What markets have you targeted? What was the rationale? Do you offer any unique products or services to these target market groups? I think this is an area we all can learn from each other. I look forward to hearing your comments below.
Beattie is president and chief executive of South Miami, Fla.-based Selden Beattie Benefit Advisors. She can be reached at 305-661-9090 or email@example.com.
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