Applying Niche Marketing to Medicare Sales
In many instances, though it may seem counterintuitive, agents can increase sales by reducing the number of prospects they pursue.
A colleague recently introduced a novel concept presented by an ad agency in Australia: consider your prospects strategic partners rather than target markets. The rationale argues that once you view your prospect as a potential partner with whom you form a growing relationship rather than a target that needs to be reached, it changes your entire way of thinking and therefore the communication strategies you use. It’s a hard point to argue and is appropriate for this conversation.
Niche marketing is a strategy that focuses marketing efforts on a well-defined
target market potential strategic partnership. Rather than marketing to everyone who could benefit from a particular product or service, this strategy focuses exclusively on small groups that share commonality. The reason niche marketing is effective is because the individual or organization promoting their product or service can speak more directly to customer needs, wants and pain points; and response rates go up when more effective communication is achieved.
The first step to building an effective niche marketing campaign is to define the customer you’re going after as specifically as possible. Keep in mind there’s a difference between market segmentation and niche marketing. Some commonly defined market segments within the Medicare insurance space agents can pursue year-round (outside of the Annual Enrollment Period) include:
• Aging In. Those aging into Medicare when turning 65.
• Low Income. Those with low enough income thresholds to qualify for Medicaid/Medi-Cal or Low-Income Subsidy (LIS).
• Moving. Those who need a new plan because they’re relocating.
While these categories help to segment the larger, overall pool of Medicare prospects, they still represent broadly defined, overly generalized groups with millions of eligible members. In order to speak more directly to the consumer with a message that resonates and prompts action, we need to break these categories down into smaller groups of people who share similarities.
Common methods for defining niche markets include doing so demographically or geographically. For example, an agent may narrow their prospect pool by reducing the size of the market area to their hometown or local service area. Another example could be an agent who speaks fluent Spanish marketing specifically to Spanish-speaking prospects in their native language. Such methods can produce better results than a blanket “catch-all” approach, though defining prospective partners based on behaviors is often even better.
Let’s take a look at the three segments previously mentioned (though there are other events that qualify individuals for a Special Election Period (SEP), these three segments represent the largest, most common groups). Here are examples of how agents can focus their marketing communications to speak directly to clearly defined potential strategic partners:
• Aging In Niche Market. Those who belong to the same local employer group seeking assistance transitioning their retiring employees to Medicare insurance.
• Low Income Niche Market. Those who regularly visit the same food bank in a local market.
• Moving Niche Market. Those relocating to a large, local community of seniors (active adult community, apartment complex, retirement home, etc.).
The above examples demonstrate only a single method for developing a niche market within each segment, and there are many more ways to create niches within each segment. With that said, the examples serve to show how agents can develop more focused communications for each specified group of people. An agent who speaks to the rapport they’ve built with the employer group in the Aging In Niche Market example is immediately more credible than agents sending general communications. An agent who has established relationships with social workers who service clients at the local food bank mentioned in the Low Income Niche Market example is immediately viewed as a valuable local resource. An agent who cites their experience helping members of an active adult community is seen as more trustworthy than agents communicating broader messages.
Key takeaway: prospects are much more likely to pick up the phone and call an agent when they view a marketing piece that prompts them to think “this person is talking to me!” Even though the groups being marketed to are smaller, higher response rates can generate greater results. To put it in a dramatically mathematic fashion for context, a response rate of 5% from a pool of 1,000 prospects (50) is much better than a response rate of .00001 from a pool of a million prospects (10).
The Medicare insurance market is massive with nearly 64 million Americans currently covered and more than 10,000 aging in every day. Niche marketing not only makes marketing to these people more manageable and profitable by way of more focused, relevant, meaningful and personal communications, it allows us as agents to see them for who they are: individuals with their own set of unique problems we can help solve. Individuals who can help us grow our business. Individuals who are much more than a “target market” and deserve to be considered what they truly are: strategic partners.
As a National Marketing Organization that works with thousands of independent agents, we understand you must generate leads in order to grow your business. That’s why we work diligently to provide the resources necessary for successful marketing. If this information is valuable and you want to know more about the services we provide our Medicare agent partners, please contact us at firstname.lastname@example.org or 888-745-2320.