Since moving to Branson, Mo., I have become a student of naturedue to the pageantry of wildlife in our backyard. The other morningI was marveling at half a dozen squirrels that were foraging in theyard. Thinking that they were industrious by nature, I watched themscurry about, looking for the next big nut. Sometimes they woulddrop one nut to pick up another. Then their search for food wouldsuddenly break into playtime, as they would chase each other aboutleaping from tree to tree. I also noticed that they would tend tosteal one another's nuts—or at least scare the other squirrels awayfrom a juicy one.

The more I watched them, the more I began to compare them toinsurance producers, or just about any sales person. Do we scurryabout in a haphazard manner trying to find the next big account? Dowe occasionally lose focus and engage in playful, non-productiveactivities? Do we use scare tactics to frighten the competitioninstead of positioning ourselves in a positive light with resourcesbeyond price?

Related: Read the a previous Jack Burke column“Chicken and the Egg.”

As I pondered these questions, several rabbits hopped into theyard in search of their morning meals. These meek little creatureshopped around until they found a good section of clover anddandelions. On finding it, they intently and slowly proceeded toeat their fill without moving more than a few feet in anydirection. They ignored the squirrels, as well as a few deer thatalso stopped by for a quick snack. They didn't infringe on oneanother's feeding area, each finding their own. Their focus amazedme and I wondered whether a good sales person should be more like arabbit than a squirrel.

Niche Strategies

Are you more like a squirrel or a rabbit when it comes to nichemarketing? In today's turbulent economy I have been watchingagencies scurry about opening new niche markets. Unfortunately,they are not putting a lot of research into these niches, nor arethey effectively assigning the right producers to these niches. Asa result they keep trying to find a niche that will work forthem—without ever really focusing on any particular one with anydegree of persistence.

Niches can be a critical factor in your success. You are able toleverage experience and knowledge to open doors, and you candevelop an archive of value-added resources that are specific tothat particular niche. But you need to plan and strategize beforejumping into the market.

Sidebar: Read “Real Niche Marketing ShouldEntail.”

A number of years ago I visited a very successful agency in theNorthwest. We were undertaking several days of training andmotivation for a new niche market they were about to enter. Towardthe end of the first day, their top producer asked if he could buyme dinner because he had something to discuss with me. Duringdinner, he said, “You're talking about going out and selling thiscoverage. The problem is I've never sold anything in my life. Hiscomment threw me for a loss. How could the top producer not sellanything? When I questioned him, he explained that every Monday theowner would come into the office with a list of people to see. Fromsocial events to civic organizations to golf games, the owner wasthe rainmaker. All the producers did was go and write up theapplications. They truly didn't sell.

Over the years I've seen that this is all toocommon a practice in many independent agencies. So before goingafter a new niche, agency owners need to look into their hearts todetermine whether they truly have a sales force that caneffectively prospect, nurture and write new business on their own.And do you have the management protocols to manage the process?

Related: Read the article by JackBurke ”Balance Sales and Retention.”

One of my agency clients is in the process of evaluating a newniche for the agency with dental practices. The client has beendoing the research, has the markets and a potential producer.During a recent strategic planning meeting, the agency realizedthat it needed some additional help to avoid reinventing the wheel.A dentist and good friend of the agency is about to retire. He hasbeen active in dental associations at the local, regional andnational level. The agency hired him as a consultant to thedevelopment of the program. He helps the agency understand theunique problems the industry faces, associations that might endorseit and places to effectively advertise and promote its programs.The money paid to the consultant should be minimal compared to thevalue brought to the table and potential revenue from thismarket.

Earning the Right

I've told this story numerous times, but it still holds true. Anagency gained access to a great transportation program for truckfleets. It hired a knowledgeable expert as the producer. The agencyimplemented an advertising campaign and took it to the streets.After 6 months, the results were zero. Bottom line was that theproducer couldn't get access to the decision makers. He had notearned the right to his time.

Joining forces with an experienced marketing associate of mine,we ascertained the three biggest problems facing truck fleetowners. We then found the top experts in each of those areas andcreated informational audios aimed at providing solutions to theproblems. We began a mailing program, sending these audios out tothe prospects with a respectful cover letter. Before all theprograms were sent, the calls started coming in requestingappointments to review insurance coverage. By providing solutionsand indicating a concern about their problems, the agency earnedthe right to their time. Today that agency maintains a major marketshare in their region.

Silver Bullet?

There are significant signs of a firming, possibly hardeningmarket in the near future. Too many agencies are betting the farmthat increased premiums and commissions will solve their problemsin 2012. Unfortunately, they are deceiving themselves.

Related: Read the article “Disciplines of Success”by Jack Burke.

First, the coming market may be a first of its kind: acombination of hardening and economic recession. Second, manyagencies have not prepared themselves to justify higher premiumswith greater resources. Therefore, they will find themselves inbidding wars for the lowest price instead of providing riskmanagement services to clients.

Niche marketing can be a potential part of the solution, but itrequires a lot of hard work and strategy. Are you up to the task?Are your producers?

If you choose to look at new niches to grow your agency, takethe time to do it right and focus on the potential in front ofyou—just like a rabbit.