In a hard insurance market, you can’t always compete on price. Instead, you’ve got to find your key differentiator to stand out from the competition.
Smart brokers are doing this by claiming a competitive advantage. This may be a very small geographical market, a niche product you offer or even a customer service principle you live by. Unsure of what your agency’s competitive advantage should be?
Here are five lessons learned to help you find your competitive advantage from Fortiphi’s nine years as a niche brokerage serving Northwest Washington state:
- Identify a “sticky” niche. Find things that are unique and interesting to you and not to others in the market. For example, a significant niche for Fortiphi is senior living and adult family homes. Most local brokers can’t sell this because they don’t understand the industry. Once you become known for a niche, businesses will come to you because you’re the “expert.” Doing this also eliminates the need to fight against four competitors at every renewal. The choice for the insured is simple. When looking for something “sticky,” ask yourself: What is your agency good at that can scale?
- Become an expert in your field. Be curious. Be investigative. Join associations. At Fortiphi, we’ve done this by joining local adult family home associations and speaking at their events. I researched the key contact at one of the most influential organizations around in this niche and I hired her to work for us. She inspects homes and then helps us write their insurance coverage. Ask yourself: Who is the expert in the space you’d like to infiltrate? How can you connect with them?
- Champion a unique product. For example, Fortiphi is a surplus lines broker — one of only 70 across Washington state. Of course, to do so we had to get a surplus lines license. But now we can save customers money and Fortiphi has become a local surplus lines leader. Another broker I know focuses their business on writing personal lines insurance through car dealerships. To do so, their team works on Saturdays to be available to when the dealerships are referring new customers, as that’s the day most people buy their cars.
- Be ever present. To have a true gangbuster operation, you must be unique. For Fortiphi, it’s our ability to function as a boutique shop for our clients’ needs. Our goal is to be an extension of their HR team — to be their advisor. We go onsite to do a Q&A with the HR staff at every client office around the first of the year. Our competitors don’t take the time to do that. Our value proposition is that we are there 24/7. When there’s a billing issue, we are the ones to pick it up for you. We don’t service center anything. That boutique touch still wins and maintains business.
- Build customer relationship touchpoints into your process. The centerpiece of Fortiphi’s client retention is our four to five annual customer touchpoints. Think: A hand-delivered holiday gift, the January Q&A (see #4), a thorough onboarding packet and handwritten notes. If you work at Fortiphi, you write handwritten notes. Our goal is to send one out mid-year and again at policy renewal. Yes, it takes time and, yes, an email is more efficient. But you know someone really values you when they write you a handwritten note.
Closing deals and retaining clients in a hard market can be a challenge. Fortifying your client relationships by building a niche, showing up as an expert and creating lasting client relationships will give your business the competitive advantage it needs to not just survive in today’s insurance marketplace – but to thrive.
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