Effectively Marketing Non-Qualified Plans
The most effective marketing of nonqualified plans takes place in a target marketing environment. Through target marketing of nonqualified plans, a life insurance agent focuses his or her attention and marketing efforts on groups of business owners that:
 He or she wants to work with and are appropriate for the agent
 The agent can contact easily
 Share certain common characteristics
 Communicate with one another through meetings, written communication, etc., and
 Have financial needs that are generally shared by most of the group
We will take a few minutes to look at the general principles involved in effective target marketing, beginning with how to find a niche.
Finding Your Niche
A life insurance agent that has been in the insurance business for any length of time has usually found prospects and clients with whom he or she has a great deal of rapport. These are people whose company the agent may have thoroughly enjoyed in addition to having made a sale.
Unfortunately, there are other prospects and clients with whom the agent may have had little in common. Often, whether or not these individuals purchased a policy, the experience has been far less enjoyable. In the process of target marketing, the agent tries to find groups containing large numbers of the former and few, if any, of the latter.
If an agent has previously worked with businesses and business owners, the place to begin is by looking through his or her client list. The immediate task is to identify those current clients that are either business owners or senior executives in business firms.
Once these business-related clients have been identified, the next job is to separate them into groups of individuals with whom the agent enjoyed working and those with whom he or she did not. The purpose in so doing may be obvious: business owners and executives in the same industry often seem to have similar temperaments and outlooks. An agent who has enjoyed working with one building contractor, for example, may enjoy working with other building contractors.
At the conclusion of this exercise, the agent may have identified a half-dozen or more clients that could be characterized as business-related and with whom the agent enjoyed working. The next step is to telephone them for an appointment to discuss the possibility of specializing in the needs of others like them. It is at this point that the agent begins to identify markets in which he or she can work profitably and effectively.
Identifying Markets
The process of identifying markets is an important step in the job of target marketing, but it is only the first of several important steps. In this step, the agent is generally doing little more than gathering the names of those markets that have some cohesive element within them. That cohesive element is often an association to which the bulk of the industry firms belong.
It is important when gathering the names of potential markets for the agent to suspend, to some extent, his or her critical faculty. In simpler terms, don't try to eliminate markets before knowing enough about them to make an informed decision.
In addition to reviewing the list of current clients to identify potential markets, there are many resources that may be helpful in their identification:
 The Yellow Pages of the local telephone book may have a category listed as Associations; as we will see later, an association that serves the market that has been identified by an agent as a worthwhile target can be of enormous help in breaking into the market.
 The local newspaper's Business section may have a column devoted to local business happenings; these columns frequently report on the activities of important business segments in the area.
 The Internet is a marvelous source of information concerning organizations in the agent's local area. Simply by entering into a search engine the name of the state in which the agent is working along with the word "associations," the agent may obtain listings for as few as 20 or 30 or as many as several hundred associations. For example, if the agent is working in New Jersey, he or she should access a search engine, such as Yahoo! or Google and search for "New Jersey associations."
 The local Chamber of Commerce is another good source of information about local associations, and the Chamber's economic development officer may have a great deal of information that the agent can use when researching the selected markets.
 The local library may have a listing of local or statewide associations along with the name of the executive director and a telephone number at which he or she may be contacted. Another important resource for associations is Gale's Encyclopedia of Associations.
These are just a few of the resources that can be accessed to identify potential markets. Normally, when the agent has identified 5 or more markets that he or she thinks should be considered, the next step in the process begins: researching.
Researching Identified Markets
Up to this point, all that has been accomplished is the identification of markets that may be appropriate for the agent. Now the work really begins; the agent must research the identified markets. Since salespeople tend to be more action-oriented than research-oriented, it is this area that often seems to cause them the most difficulty and is the step that agents frequently try to avoid or minimize. That may be a costly mistake.
After the agent has identified potential markets, the job of researching them normally begins with locating one or more key players in the market to interview. In addition to the current clients that the agent identified at the outset, some of the key players that the agent may want to interview include:
 The executive director of the association that serves the market
 Board members of the association that serves the market
 The owner or president of one of the larger businesses in the market, and
 The economic development officer at the local Chamber of Commerce office
The principal purpose of researching the initially-identified markets is to enable the agent to decide if the market is one to which he or she can bring value and enjoy a profitable insurance practice. There are other reasons to research the markets, of course. These interviews provide the agent with information that will enable him or her to create an effective plan to develop the market in the event that it is selected.
To this end, the agent should conduct a number of interviews with selected "movers and shakers" in the market. These interviews are very structured and generally look at the market from 6 perspectives:
 Whether there is a good fit between the market and the agent; in this regard, the agent needs to consider his or her products, experience, interests and strengths.
 Whether the size of the market is appropriate for the agent; in this case, the agent needs to find a market that is large enough to justify the expenditure of resources to develop but not so large that he or she will be "lost" within it.
 Whether the market is already inundated with other agents working in it; with respect to the market's ability to support an additional agent, the agent must candidly assess his or her knowledge and abilities and compare them with those of other agents that are working in the market. Assuming that the agent's skills and knowledge are sufficient, a rule of thumb that may be useful is that approximately 200 market members will generally support one agent. Therefore, a market of 400 members is likely to support 2 agents, but probably not any more than that.
 Whether the market's values are consistent with the agent's insurance products; in this regard, the agent will need to determine if the market members are likely to respond favorably to the agent and to what he or she offers.
 Whether the market has a strong potential for profit; in doing this, the agent will want to determine if the businesses are earning profits and expanding or just holding on and trying not to lose money.
 Whether the agent can reach the market members; generally, this criterion is affected by whether the market is served by a newsletter or magazine and whether it has periodic meetings and social events.
After several fact-finding interviews have been held with members of each market that the agent is considering, the agent needs to summarize the information obtained in the meetings and, based on that information, evaluate the market.
It can't be stressed enough that researching the initially-identified markets is critical. If the agent can't reach the market members or if the market is in decline, the resources that the agent expends to develop the market -- and market development will consume substantial resources -- will be wasted. How much better it is to realize that a market is wrong before having allocated resources to develop it than after.
Once the agent has selected one or two appropriate markets that he or she wants to penetrate, the target marketing process moves to its next step: market development. Because of the time and financial commitment required to develop markets sufficiently, agents should generally avoid attempting to work in more than two markets simultaneously. If the markets chosen are appropriate for the agent and the agent has adequately developed them, two markets should be sufficient to keep the agent busy almost all the time.
Market Development
Market development encompasses all of those activities that enable an agent to create visibility and become well-known as a resource to the market. However, before beginning to engage in those activities, the agent needs to create a market development plan.
The market development plan serves several purposes:
 It identifies those activities in which the agent plans to engage in order to create visibility among the market members and those activities that will help to position him or her as a knowledgeable resource available to them.
 It schedules when the identified activities are to begin and the anticipated results.
 It estimates and budgets the costs associated with each of the planned market development strategies.
It is important to always bear in mind that the market development activities should be focused on accomplishing two important objectives:
 Creating visibility for the agent, and
 Positioning the agent as a knowledgeable and valuable resource that is available to the members
Depending on the nature of the market, one of the most important first steps is for the agent to join the association that serves the market in which he or she wants to work. Often, the agent's opportunity to engage in many of the other market development activities will depend on becoming a member. In addition, by joining the association, the agent usually receives a roster of all of the association members.
Not all associations are willing to permit an agent -- or anyone else without certain specified credentials -- to join. That is something that the agent will normally learn at the time he or she is researching the market and should play a part in the agent's determining whether or not the market is one that is likely to be fruitful. Many associations are not only willing to let an agent join, however; they enthusiastically encourage it. Frequently, these associations have a vendor member status that will give the agent all of the membership rights and privileges other than the right to vote on issues before the membership.
Although annual membership dues vary from very modest to expensive, it is not unusual for association membership to cost $400 - $500 each year. Membership dues, however, are not the only costs the agent is likely to incur. Many associations have monthly dinner meetings -- often at local restaurants -- that may begin with a social hour, followed by dinner and then a business meeting. These dinner meetings often cost $40 - $50 but provide an opportunity for the agent to have dinner in a relaxed setting with the members of his or her market.
The market development activities in which the agent should consider engaging include the following:
Creating the visibility that the agent needs and positioning him or her as a resource to the market members takes time and money. If the agent lacks sufficient time or financial resources to adequately develop his or her chosen market, it makes more sense to rely on the normal non-target marketing sales techniques until the resources become available. In other words, it is poor strategy to make a half-hearted attempt to target market. It is likely to be both expensive and non-productive.
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