Agencies that Specialize

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Agencies that specialize tend to have an edge in specific markets. While most agencies do not specialize, those who are starting an agency should give specialization some thought, as it can bring in higher profit margins due to economies of scale. Specialization also means that you will turn away accounts that are not among the types of business you target.

I like specialization from a marketing standpoint, as there are many opportunities to get involved in trade associations, target online searches, or advertise in trade industry publications. You can gain a solid reputation in the class of business you target, as industry insiders would rather deal with people who are familiar and understand their specific situation. It also facilitates referrals, as people in the same niche industry tend to know and network with each other.

Even if you don’t specialize, have you thought about narrowing your focus? Examples include high-value clients, collectors of classic cars or any group that shares specific characteristics. Just as with specializations, it will help in operations, marketing, and your bottom line. Lastly, remember that direct writers mostly do the same thing, providing auto, home and life insurance to middle-class clients. These services are a dime a dozen, so standing out and being a little different eliminates a lot of the competition.