Leveraging Business Owners in Multi-line Agencies

Small businesses are a market of significant opportunity. There are nearly 24 million small business households in the US and Canada. Many of you are small business owners yourselves. If you have an office in your community, you are better positioned than anybody else to understand and meet the needs of entrepreneurs in your area.. Capturing the opportunities the small business market represents can open the door to additional conversations. Of all the life events that happen to people, starting a business is one that triggers more insurance and financial service conversations than any other. The small business customer is an entry point to multi-line sales opportunities for agents. You can engage this market for revenue, agency growth, and the strategic fit.

Revenue: Business Owner Policies tend to be higher premium than Homeowners policies. Premiums for small businesses can range from several hundred dollars to tens of thousands of dollars per year. Plus, most states require Workers Compensation insurance depending on the number of employees, which can lead to additional premium.

Growth: Sales among business owners may lead to multi-line opportunities with their own personal needs, such as their personal cars or home These entrepreneurs may also have greater needs for Life insurance, Medical insurance, Disability insurance, Commercial auto insurance, and investment products. By securing a product with the business owner, you may also be able to maximize growth opportunities with other touch points, such as business partners and employees. Business owner clients can also refer you to other business owners that they know.

Strategic Fit: Business insurance is demand driven product. Like auto insurance and homeowners insurance, most business owners recognize the need for it. Small business owners are accessible and approachable through direct marketing and face to face contact. Offering business insurance and financial services products to a business owner can further brand you.

Small business crosses over many other targeted segments. Seventy percent of Generation Y want to start their own business instead of work for someone else. Baby Boomers start new businesses at a rate nearly 3-to-1 over other adults. New businesses owned by women are growing twice as fast as those owned by men. The multi-cultural markets are also opening businesses at record levels. According to the Small Business Administration, in 2002, minorities owned 4.1 million firms that generated $694 billion in revenues and employed 4.8 million people.

Getting Started

First, check with your underwriting department on which classes of business are in your company’s scope of eligibility. If business insurance is relatively new to you, you may wish to focus on specific niches, for example, dry cleaners. By doing this, you can learn about the underwriting criteria and coverage needs of that particular niche before moving on to another class.

Identify Prospective Clients:

• Search your current book of business for self-employed clients..
• Ask professionals you have a close working relationship with to offer referrals. Accountants do business with many customers who own businesses that may be ideal for your insurance products.
• Ask current business-owner clients for referrals of other quality business owners they may know.
• Utilize contacts you have with other business owners in civic organizations, such as the local Chamber of Commerce, Rotary, etc.
• Utilize Yellow Pages, Internet Searches, or business association publications to identify owners of targeted businesses.
• Participate in local home shows or homebuilder association shows to gather contact information.
• Seek relationships with business owners within cultural markets. Understanding their unique circumstances will offer many referral opportunities.
• Advertise in local newspapers, classifieds, and home real estate guides under the business property listings.

Approach the Prospects

• Consider developing a relationship with the customer first by sending marketing letters, postcards, and a business card. Follow-up with the customer on a regular basis (perhaps quarterly) so they become familiar with you, even if you don’t write any business with them right away.
• Go door-to-door in areas of targeted businesses to introduce yourself as an agent who helps business owners protect the assets. Go during the day when the owners are likely to be on location.
• Approach the owners with an attitude that you’re wanting to help them by offering a single source for insurance products. You can talk to these prospects as fellow business owners, associating with their joys and struggles of running a business.

Focusing on the customer’s business needs is just the beginning. One conversation could lead to personal sales for the business owner and his or her employees and clients. There is tremendous opportunity for agents to grow through this market. In addition, in my experience, two-thirds of business owners say they prefer to one-stop shop – use one advisor for their personal and business insurance. Including business owners as part of your marketing strategy can reap numerous rewards.

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