Reaching the Middle Market, Part 1: Why You Need a Strategy

The authors of the LIMRA/Epsilon middle-market study divide this huge demographic into five distinct purchasing profiles, and suggest tailored sales strategies for each. Each niche has different needs and pain points.

Agents and advisors have known this for years. Many have found profitable niche middle-market segments.

(Image: Thinkstock)

They may not follow the exact LIMRA/Epsilon template, but idea is the same: pursue a specific sub-group by addressing its unique needs.

Eric Palmer says Brokers Alliance has micro-segmented the middle market for 35 years.

"Our strategy is multi-generational," he says, "We take each generation in three segments. We've got your millennial, your X, your baby boomer. Then we break it down within those segments — you know, married versus single — because the approach, the script, the reason, the need, those things all change."

The Brokers Alliance agents educate on potential needs, and offer solutions, unique to each segment, often emphasizing single-policy solutions over multiple plans.

"We're finding now that providing value is much more beneficial, and are wrapping that value with education," Palmer says. "So, as an example, teaching somebody just how much they're going to need in a living benefit and a death benefit, and a potential supplement to their income stream. Educating them about the choices they have, and then showing them what the insurance products can do for them, at a fraction of the cost of buying all these policies separately.

"So, really, educating them about the need, and then using the hybrid type products to show them the cost savings. And providing more value, and so we find that that person, once you go through that process of education, will take a Phoenix life living benefit term, or Transamerica living term, that's 30% higher premium over that Banner term insurance product that's strictly focused on death benefits."

Agents can stay top-of-mind as advisors, Palmer says, by addressing multiple needs with value in mind.

Middle-Market Buyers: Open to Add-Ons and Workplace Sales

Job-site sales, and casualty agencies, show consistent profit, with add-on and up-sell opportunities. Busy families and professionals are accessible — and receptive, according to the Society of Actuaries report.

Mark Mazza, an Aflac district sales coordinator in Southern California, agrees with the SOA assessment.

"We cross all demographics," he said by email, adding that boomer and Gen X families favor asset protection, while millennials look to protect income.

Aflac has successfully targeted the middle market for 35 years, with high value, specific-solution products.

The workplace setting (and, since 1990, a creative brand) keep the company visible to busy families. 

"Everyone identifies with the duck, young or old," Mazza says.

Orville Lucus, who owns a large American Family Insurance property and casualty agency in affluent St. George, Utah, also divides the market by generation. "My middle market is actually the senior market," Lucus says.

After middle-income households' basic homeowners and auto needs are met, he suggests add-on Medicare products. Honing his message to this very specific niche helped Lucus drop less-profitable ancillary lines, maximizing his return on investment.

Next week, see: Reaching the Middle Market, Part 1: More About How to Actually Do It

— Read Capturing The Millennial Middle Market With Smart Analytics on ThinkAdvisor.