Insurance Agents Learn How to Market to People Unlike Themselves

The middle-aged white woman told the audience of mostly older white male businessowners that much of the country and many of their future customers don’t look like them or necessarily share all their values.

While whites make up 64 percent of the U.S. population today, by 2041 whites will be a minority in the country, multicultural marketing expert Kelly McDonald told agents at the recent legislative conference of the Independent Insurance Agents and Brokers of America (Big “I”) in Washington.

The numbers of minorities and women owners in the agency system are low. The 2010 Big “I” Agency Universe Study found that the number of agencies with principals who are women, Hispanic and/or African-American had increased since 2008. The proportion of independent agencies with African-American principals grew from 1 percent in 2008 to just over 4 percent in 2010. There has been more progress for women. More than a third of new small and medium small agencies have women as principals, according to the Big “I.” New agencies appear to be the main driver of this change, according to Quincy Branch, chairman of the Independent Insurance Agents & Brokers of America’s National Young Agents Committee, writing for Insurance Journal recently.

McDonald was not in Washington to lecture agents on increasing minority ownership. She was there to help them learn to market to diverse populations and that communities, customers and the workforce are changing. Her presentation was titled, “How to Market to People NOT Like You.”

America is no longer homogenized, she said, adding, “We are no longer a melting pot, we are a salad.”

McDonald, president of New Mexico-based McDonald Marketing, works with IIABA and its Diversity Task Force that is trying to increase diversity within the agency ranks and improve agencies’ capacity to serve diverse populations.

McDonald had plenty of figures to drive home her point:

• One in three Americans is not white, and the majority child population is non-white.
• The country’s multi-racial population is growing three times faster than the overall population.
• The biggest shift is the “browning” of America – the rise of Hispanic population. One in six Americans is Hispanic and one in four children is Hispanic.

Generation Y’s Values

In addition to recognizing that America is changing color, agencies need to learn to understand Generation Y or Millennials (born between 1982 and 2004) and they might want to start by bringing some young people into the agency business, suggested Tom Minkler, Big “I” chairman.

Minkler said the independent insurance agency force is one of the oldest industries in the country.

“Look around,” he told attendees. “Fifty percent of people in the system will not be here in five to seven years.”

The younger generation has different attitudes about family and marriage, McDonald said, noting that Generation Y has been raised by a variety of different families including unmarried parents, divorced parents, single parents, gay parents and grandparents.

Implications for Agents

As America changes so does the customer base for agencies. So how should agents relate to their new customers?

For one, McDonald said agencies should know there will be more women owning businesses. Women are more about customer service than men and they tend to place trust in other women, she said.

As for members of the younger generation, they can get information on the Internet, “But they will want advice, guidance, counsel,” McDonald said. “Helping beats selling” when it comes to appealing to Generation Y, she added.

The younger generation builds relationships differently, “but they still believe in relationships,” McDonald said. Agents have always valued face-to-face contact whereas younger people prefer to use social media to build relationships.

Topics Agencies