‘POWER SHIFT’ – NICHE MARKETING IN TODAY’S WORLD
by Mike Manes
This article by Mike Manes is the setup for an argument on niche marketing. Manes relies on a classic in literature to complete the argument.
The closing poem describes today’s world of business: A world that’s seeing a Power Shift from providers and distributors of products and services to the consumer — the person or entity who pays for and uses these products and services.
Yesterday’s world was a “mass market.” A few manufacturers (providers) and their distribution channels delivered what they wanted to the masses and the masses eagerly bought this stuff.
Remember the “Big Three” automakers, the three networks (ABC/CBS/ NBC), and Time/Life/Look magazines? Consumers were held captive by whatever these folks wanted to sell us and the information they made available to us.
Today, we have more than 500 cable channels, dozens of auto manufacturers with hundreds of models, and a specialty magazine for virtually every region of the country, specialty niche, or lifestyle: WWR, Fly Fishing, Quilting, Left-handed Diesel Mechanics, etc. More important, the Internet allows any consumer anywhere to access full information about any product or service they want to acquire.
To convert this into the language of the insurance industry, yesterday’s world of success meant keeping a customer in the dark. Tomorrow’s success stories are being written by those who help the customer manage “the light” (information).
Let me offer an example. I was around when the first comparative rating systems were introduced. These systems were one of the forces in the changing face of insurance by providing user-friendly information to customers.
The first agent in each town to buy a comparative rating system, in my opinion, did not change their behavior when they used it. The change occurred when a competing agent in town started adopted comparative rating. Technology might make more people honest than the Bible.
Tomorrow’s world will include a global, highly competitive marketplace serving an increasingly sophisticated consumer with access to the Internet and the comprehensive information and buying access capabilities that it provides. This is the Power Shift.
Yesterday, agents defined themselves by product, place, and professionalism: “I’m a Property and Casualty, Group or Life agent. I’m in New Iberia, Louisiana, or Dallas, or New York City. I have a CPCU, CLU, CIC, or ARM designation.”
With the Power Shift the customer will define the agent as their agent.
Customers won’t choose an agent based on product features or price, but on the benefit that they derive from the relationship. The world is moving too fast and has too many hassles and uncertainties for most of us. We want peace of mind.
Most people are willing to pay for someone who can and will reduce the hassle, slow the pace, and provide peace of mind: Someone to listen to us and build what we want and need. We’ll no longer accept a “shelf product” being shoved down our throat.
Buying integrated solutions to our problems will be the issue. Deciding on specific products and carriers will play a minor part in this process. Customers won’t expect any one person to know all there is to know about all our exposures and the products needed to cover them.
We want an expert who can access and manage the resources needed to address these exposures. We don’t want an agent (remember, “agent” refers to your relationship with the insurance company); we want a Resource Manager.
An excerpt from Marshall Goldsmith’s article “On a Consumer Watershed” in Leader to Leader (Summer 1997) offers insight into this new reality and the challenges that it creates:
“More and more businesses have quit buying stand-alone products and have started buying integrated solutions. The trend means that leaders of successful organizations will need to develop different organizational structures, systems, and skills …
“As the world becomes more complex, customers’ need to ‘keep it simple’ increases. However, making things simple for customers might not be simple for providers …
“The demand by customers in widely diverse industries for integrated solutions rather than stand-alone products is not a fluke or a fad. It is a powerful response to a more complex, more global, more competitive landscape. It is, in short, a watershed event.”
Tomorrow’s agents will be customer defined and customer driven. You won’t redefine your agency. You will adapt your agency to the definition of you that each customer provides. You’ll become a niche marketer, serving a niche of one.
The bad news is that you must change. The good news is that if you’re still in business today, you have the ability to adapt — to change . The question is: Do you have the willingness to change yourself and your agency, and to motivate the people in your agency to change themselves?
Throughout my career, P/C agents have prided themselves on saying that if you ask a customer who writes their Life insurance, they’ll name an insurance company. If you ask them who writes their Homeowners or Auto policy, they’ll name an agent.
In tomorrow’s world, if asked who writes their insurance, the customer will answer with the name of their Resource Manager . This customer might or might not be able to name any company or any technician that’s handling their file — their resources. They’ll only name the person managing their needs!
Sales and marketing have always been about “influencing customer/prospect behavior.” In tomorrow’s world, customers with information and options will “influence (define) the behavior of the manufacturers and distributors in their marketplace.”
In the future, how will your customers define their agent? Will you fit this definition?
Before you read the closing poem, remember, “There are none so blind as those who will not see.” Are you moving forward with your eyes open?
The Blind Men and the Elephant
by John Godfrey Saxe
American poet John Godfrey Saxe (1816-1887) based this poem on a fable told in India many years ago:
“It was six men of Indostan
To learning much inclined,
Who went to see the Elephant
(Though all of them were blind),
That each by observation
Might satisfy his mind
The First approached the Elephant,
And happening to fall
Against his broad and sturdy side,
At once began to bawl:
“God bless me! but the Elephant
Is very like a wall!”
The Second, feeling of the tusk,
Cried, “Ho! what have we here
So very round and smooth and sharp?
To me ‘tis mighty clear
This wonder of an Elephant
Is very like a spear!”
The Third approached the animal,
And happening to take
The squirming trunk within his hands,
Thus boldly up and spake:
“I see,” quoth he, “the Elephant
Is very like a snake!”
The Fourth reached out an eager hand,
And felt about the knee.
“What most this wondrous beast is like
Is mighty plain,” quoth he;
“‘Tis clear enough the Elephant
Is very like a tree!”
The Fifth, who chanced to touch the ear,
Said: “E’en the blindest man
Can tell what this resembles most;
Deny the fact who can
This marvel of an Elephant
Is very like a fan!”
The Sixth no sooner had begun
About the beast to grope,
Than, seizing on the swinging tail
That fell within his scope,
“I see,” quoth he, “the Elephant
Is very like a rope!”
And so these men of Indostan
Disputed loud and long,
Each in his own opinion
Exceeding stiff and strong,
Though each was partly in the right,
And all were in the wrong!
Michael G. Manes can be reached at Square One Consulting, 625 Weeks Street New Iberia, LA 70560,, 337-577-3885 (Cell), e-mail [email protected], or visit www.squareoneconsulting.com.