Target marketing isn’t anything new. Investopedia defines the strategy this way:
A target market is a group of people with some shared characteristics that a company has identified as potential customers for its products. Identifying the target market informs the decision-making process as a company designs, packages, and markets its product.
A target market may be broadly categorized by age range, location, income, and lifestyle. Many other demographics may be considered. Their stage of life, their hobbies, interests, and careers, all may be considered.
When I was an insurance agent for National Life of Vermont, I became a disability insurance specialist. I wasn’t going to compete with all those other agents that were going to approach the market with investment solutions and or 1035 insurance exchange strategies. I was going to approach the market with income protection strategies for when an individual became sick or hurt and couldn’t work.
With the help of our home office, I created postcard mailers to send to targeted business owners in Hamilton, Warren, and Butler counties here in southwest Ohio. I started to receive lots cards from those I had mailed, I had lots of meetings, submitted lots of applications and in return received lots of declined, substandard, or rated policies from my underwriting team.
I called them and asked them what was going on, to use a phrase from the movie Sandlot I kind of said, “You’re killing me Smalls”. When I asked why the applications were being rejected or rated the underwriter said the following:
“Tony, at National Life of Vermont we want to write disability insurance on those people that wear suits and professional business attire, not individuals that have their name on their shirt.”
My point being is that I was attempting to blame the company for my failure to earn commissions and the reality was that it was my fault for not pursuing business that was consistent with the company’s business strategy.
Too many times I hear bankers, investment advisors, consultants, IT salespeople, and insurance brokers complain about not getting “submissions” approved. They blame credit, underwriting, sales support services, and anyone else they can find for not being able to close more business, more quickly, with better margins.
Here are the 3 lessons to fix the problem:
- Take ownership of the problem. It is our responsibility to know what the company is looking for in the marketplace. They know what is profitable business and they have built systems, products, and processes to support the acquisition of their target market.
- Do your own market research. I’m guessing you have a book of business, a portfolio, or a list of clients that have been approved and sold.
- Identify the top 20% of your book of business. i.e. those that do represent the type of business the company wants.
- Calculate the revenue from that top 20%. If you practice is like most that top 20% will represent anywhere from 65% to 80% of your total revenue / book / portfolio
- Look for common characteristics within that group: Size of company, wealth of individual, industry, associations, number of employees, geographic location, access to decision makers, decision making process, solutions you have provided.
- On a spreadsheet identify the names of the people you contact that represent your top 20% and then across the top of the spreadsheet list all of the products and solutions you / your company provides and put an x under the products you have sold to this particular client
- Call your top 20%
- Initiate a discussion with each of them that sounds like this: “Mary, I’ve been going over my records and I see that we provide A and B solutions but we haven’t discussed C,D,E or F. How come?”
- “Bill, I continue to look for ways to expand my business to include more organizations / people that – explain your target market. I believe you could help me. How about we have lunch to talk about that?”
- At lunch, you pay for lunch and then say: “Bill as I mentioned, I believe you could help me expand my business to more organizations / people that look like XYZ. Here’s my question- if you where me doing what I do who would you call on?”
- NOTE: Do the math on the size of the pool you could have access to:
- Assume you have 20 clients in your top 20%
- Assume they know at least 5 people like them
- Assume that you get an average of 2.5 introductions from each of the 20. That would equal 50 new names that are friendly and will meet with you because of your center of influence.
- How many do you think would qualify and eventually do business with you?
The lessons are not complicated and when executed will help you find more business, more quickly at higher margins, AND you will be talking to a targeted group of prospects that have a higher likelihood of getting approved.
Founder & Chief Learning Officer, Tony Cole