I am asked frequently about what new strategies Im helping my agency clients implement to reform-proof and grow their firms. To survive the ongoing thinning of the herd, what are you planning to do differently in 2015 to remain relevant to your clients and grow your business?
Two of the key growth strategies were using with our clients are:
1) Developing niches;
2) Building a worksite voluntary benefits practice.
The marketing adage, There are riches in niches refers to the success that stems from providing specialized value to a narrow group of customers with similar needs and wants. As you work a niche, you begin to accumulate a lot of knowledge and expertise around the niche industry, allowing you to provide much greater value to those niched clients than your generalist competitors can.
The August 2014 EBA cover story on Mike Lewer and the Lewer Group in Kansas City (A niche job, p.28) discussed their success in the convenience store niche, in which the Lewer Group has developed an in-depth understanding of and specialized portfolio to meet the specific benefits needs of that market. As you obtain more expertise and clients in a niche, its easier to gain more clients in that niche as you become viewed as the expert for those businesses.
To develop your own niche, look in your book for clients from the same industry or of a similar type (e.g., manufacturers, non-profits, or professional firms attorneys, accountants, etc.). When you identify a cluster of firms, do they represent profitable business for you and do you enjoy working with them? If the answer to both is yes, begin to expand in that niche. You can join the trade association(s) for your niche, position yourself as an expert by speaking to industry groups on trends and strategies, develop a referral plan to get introductions to other firms in the niche, and research the niche to identify common needs that you can solve with an expanded product and services portfolio.
A voluntary practice
Since Im known as the industrys leading evangelist for worksite voluntary benefits, it should be no surprise that I help my agency clients build a WVB practice to leverage the voluntary opportunity. For most benefit firms looking for immediate revenue growth, WVB is the lowest-hanging fruit, since they have little or no voluntary benefits in their accounts. Highly lucrative, WVB is the ideal product line to round out an account quickly and easily. And Ive discussed in previous columns the wide range of valuable HR solutions you can bring a client at no impact on their budget, paid for by the voluntary.
But if you are serious about leveraging voluntary benefits, you must build a voluntary benefits practice in your firm; a recognized agency best practice since WVB is sufficiently different from the medical and P&C and has a lot of moving parts. Your WVB practice leader can be internal, but he should be full-time with WVB and there is a steep learning curve. Another option is to hire a WVB expert; expect to pay $100,000 to $150,000 annual salary plus a piece of production. The third option is to partner with an outside WVB expert, which many agencies are doing at no cost to their firm.
Working a niche and building a voluntary practice will help you remain relevant and grow your business.
Griswold is an agency growth consultant and author of DO or DIE: Reinventing Your Benefits Agency for Post-Reform Success. His Agency Growth Mastermind Network helps agency leaders reform-proof their firm. Reach him at (615) 656-5974, nelson@InsuranceBottomLine.com, or through 21stCenturyAgency.com.
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