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An Insurance Broker's Guide To Choosing The Right Customers

5 min

The job of an insurance broker is heavily dependent on the customers they work with and the relationship between the two parties.

Throughout their careers, agents meet hundreds of clients, many of whom remain loyal to the insurance company for years to come. Others, however, may not have been the right customers for that business.

Knowing the target customer of your business is crucial in a highly competitive market such as the insurance one. Granted, you might feel that the more customers you have, your business will be more successful. Yet, this may no longer hold today, as having the "right customers" can be much more effective than having the most customers.

Read the rest of the article to know the benefits of targeting the right customers and the different ways to identify them in the market.

What is meant by "the right customer"?

Simply put, your “right customer” is the one that your services directly target. It is the client whose needs perfectly align with your products. For instance, if your company offers restaurant insurance, your right customer is a restaurant owner. You can take it even further and limit the scope of your company to a particular geographical area, so you would only contact restaurant owners working in that area. It all depends on the market study you conducted before starting your career as an insurance broker.

However, the challenge that insurance brokers might face when identifying the right customer is mainly linked to clients' needs constantly changing. If your services meet those needs today, they might no longer fit the updated requirements tomorrow. In other words, today’s right customer may not be tomorrow’s.

Why is having the “right customer” essential for your business?

Knowing who your target customer is can be advantageous on several levels. The benefits can be reaped on the financial end or used for improved customer service and retention. 

First, the most apparent benefit is generating more money. If you know whom your services are targeting, you won’t waste money marketing your products to an irrelevant audience. Every marketing campaign you work on aims to present solutions to audience members whose needs you already know.

Second, the right customer stays loyal to the company. If your company's services answer the customer’s needs, then that client won't look for another insurance company. The client's loyalty also helps you generate more money since they'll probably only invest in your products.

Third, and this is a direct result of the second benefit, having loyal customers and retaining them help you build your company's reputation. Companies that manage to retain their customers are more successful and reputable than those that don't.

How can you identify the "right customer"?

Now that we have established how important it is for you to know who your target customer is, all this is useless information if you cannot find those clients. Identifying the right customer requires hard work and time, so you should be aware of some reliable methods to use. As such, here are some of the most effective ways to reach the right customer.

  • Have an idea of what your target customer is like.

Before you even begin the search for the right customer, you need to have a list of characteristics that the customer checks. This stage is known as finding your buyers' personas, which are pre-established ideas that you might have about your potential clients. Once those ideas are generated, the hunt becomes much more targeted, and you become aware of the prospects that will benefit you.

For instance, you might wish to sell your insurance plans to people from a specific socio-economic background, living in a particular geographical area, and suffering from a specific issue. Any customer who does not fit those criteria does not count as the right customer, and you might choose not to do business with them in the future. While this might seem like a loss to you on the surface level --after all, you feel like you are losing a client-- this saves you lots of time in the future, especially when it comes to marketing your products to relevant audience members.

  • Understand what your target customer values.

Even within the same market, different customers have different needs. As an insurance broker, you cannot answer every one of those needs. Some clients may seek the lowest-priced insurance plans, while others may look for technologically-powered services and products. Before choosing your audience, you must ensure that your services meet their needs. If you do not sell insurance plans for different budgets, you cannot market your services to people from a relatively low socio-economic background.

  • Use marketing tools to your advantage.

There are several marketing tools that you can make use of to help you target and retain clients. With the insurance world heavily favoring digital tools, you have access to hundreds of pieces of software that can make your and your customers' lives much more manageable. For example, if you are looking for valuable channels for lead generation, you might rely on Google ads or content marketing. Knowing which channel to use is extremely useful to help you save time and money.

Additionally, you might be looking for an effective prospecting tool, in which case you can rely on Asteya's LEA. LEA is a prospecting tool that allows you to scan for potential customers while scrolling through your Linkedin feed. If you come across a potential client's account, LEA can automatically collect the necessary data and add it to your bank for you to check it in the future and get in contact with the client.

  • Discuss your customers' past experiences with them.

Your customers may have signed up for insurance plans with a different insurance company in the past. When you first connect with them and decide to meet up, it is advised that you discuss with them their previous experiences. Check precisely why they did not renew the previous insurance plan. Was the plan too expensive? Did it not cover all their needs? Did the company lack proper customer service?

Discussing these concerns with your client is crucial for several reasons. First, this shows the client that you care about their needs, which helps create a strong bond between the two of you from the beginning of your journey. Second, it helps you identify your customer's needs better, see what the market is missing, and tailor your services to answer those needs. Finally, it also gives you a clear idea of whether you can provide the necessary services to those clients. Remember to be transparent with your clients. You do not want to promise them products you cannot deliver- otherwise, you risk losing their trust.

  • Learn from your previous customers.

Attracting new customers and convincing them to buy your insurance plans are essential stages in the sales cycle. However, you need to keep in mind that you may not be able to retain every single customer with whom you have previously made deals. This is a normal part of the process.

This should not demotivate you. Take the opportunity to check what might have gone wrong with that customer. What part of their experience could have been made better? What improvements can be made to your own products? Once you understand that losing customers can be a learning experience, you can use that to your advantage to optimize your services. Every lost customer brings you closer to ultimately reaching the right customer.

The bottom line

It's no secret that you want to reach and attract as many customers as possible as an insurance broker. You need to keep in mind, however, that you have to approach this stage of the sales cycle intelligently. You also need to understand that reaching the target customer might take time, so you should not feel demotivated if the process feels lengthy.

Know your right customer and tailor your services to fit their needs. To attain sustainability in your business, you need to work with the right people and convince them to invest in your insurance plans. Once you have an established community of loyal customers, your brand will automatically grow and reach even more clients before you know it.

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