Do you make niche branding a priority in your agency?
If not, you should.
In the past year I’ve learned a few very powerful lessons about focus and its impact on growth while building my own insurtech startup, Effective Coverage.
Effective Coverage was founded in 2008. Over the last 9 years, through blood, sweat, trial and error, we’ve experienced considerable growth in our renters insurance program.
It seems as if almost every day, new opportunities arose that could help our renters insurance program break into new markets.
As a budding entrepreneur, I saw this as our, “gas pedal moment.”
So we accelerated. We expanded into new areas and new lines of business, assuming the same methods that grew our renters insurance program, would yield similar results in new markets.
Growth is hard. Growth in lines of business you don’t have a natural affinity for is downright difficult.
Our focus on on expansion drained resources and strained company moral.
We were so used to winning that we walked right into a classic startup mistake.
Whereas our proprietary renters insurance program created value and differentiation, we had no competitive advantage in the new markets and lines of business we had attempted to expand into.
I had to make a decision. Throw good money at a bad decision or cut bait and refocus.
In the end, the choice wasn’t as tough as you might think. I didn’t start Effective Coverage for media headlines or large venture capital investments. Effective Coverage was my answer to the question, “Why do so few renters have renters insurance?”
A question I asked myself after experiencing firsthand the devastation of an uninsured apartment fire.
2016 delivered some tough challenges. We may not have made it through if it wasn’t for all the hard work we’d done building a strong brand in the renters insurance niche. But we made it and are now poised to thrive in 2017.
Here are five niche branding lessons learned while growing my insurtech startup:
1) Core Growth Wins
Growth feels good.
Hitting significant milestones month after month fuels the fire to grow even more. But if you’re not careful, it can also give you a false sense of confidence.
When we decided to expand Effective Coverage into different markets, it seemed like it was the right course of action.
We saw our monthly renters insurance business growing and didn’t think twice about our ability to repeat that growth in other marketers.
We’re rock stars, right?
In hindsight, our rapid growth in the renters insurance space was due to strategic partnerships we’d put in place early after our launch. Our early growth was not because of some fancy growth hacking strategy.
But rather hard fought relationships built over an uncountable number of phones calls, emails and in-person meetings.
The reality is, your core business is your core business.
Never lose sight of your core business, even after you’ve hit all your milestones.
LESSON: Concentrate on your core business until you’ve drained every drop it can produce. Don’t be too quick to move to the next shiner product or line of business.
2) Stay With Your Customers
When you’ve found a message that resonates with your desired client segment, stay with it. Whether your audience is 100, 1,000, or 10,000 people, finding your market is tough and not to be discarded lightly.
We made the mistake of chasing a bigger audience at the expense of those people we already knew how to speak to and add value to.
Don’t abandon those initial customers in your quest to find more in another niche. Instead find ways you can provide more value to the customer you already have.
By continuing to focus on customers, even when you feel like you have it figured out, you’ll only build deeper connections.
Deeper connections with your customers will improve retention and increase Net Promoter Score (NPS), the measure of someone’s willingness to refer your business.We learned that providing value to current customers trumps finding new or bigger markets.
LESSON: The needs of current customers must always come before the needs of new potential customers. Happy current customers will naturally attract new customers to your business.
3) Table the Idea
Expansion into new markets is not a bad idea.
Every entrepreneur or business owner that has started a company, built it up, and is operating with a successful return is going to have at some point, expanded their pool of potential customers.
But there is epidemic of terrible advice circulating business thought-leaders which goes something like, “The only way to succeed is to cut the safety net and go for broke.”
This is the worst idea ever in business. We must be intentional with every action. Decisions must be deliberate and well planned.
There is an appropriate time for everything. Take your ideas, whiteboard them, debate them within the company, and then stick them in a folder for when the company and the team is ready.
Then revisit your ideas every few months. Time away from ideas will give you a fresh perspective on whether the idea is worth pursuing.
LESSON: The key to expanding into new markets is deliberate planning and intentional action. Expanding into new markets is a good move only if it helps your company.
4) Avoid Brand Confusion
Effective Coverage started with just a business plan and a logo, but eventually, through hard work and little bit of luck, we developed a brand.
It is an impressive achievement to develop a brand people recognize it in your niche. But our victories can lead to hubris and the notion that we can deviate from your brand will little impact.
Unfortunately, far too often even slight changes to our brand creates confusion and alienates the customers that had grown to love our brand in the first place.
Our focus has always been renters and multi-family home insurance. If we were to all of the sudden start focusing on something like yacht clubs or high net worth individuals it would skew the overall message of our branding foundation (both lessons we’ve learned the hard way.
Whatever it is about your brand people enjoy and respond to, own it.
LESSON: As your brand grows, it’s even more important to remain steadfast to style and messaging which won you credibility and respect in the first place.
5) Incremental Improvement
Expanding into new markets and launching new products is fun. But before you take on the next new thing, ask yourself this question:
“Have you picked all the low hanging fruit in your current markets?”
We’ve found tremendous success seeking out and finding new ways to incrementally improve our foundation.
The best place to put your time and capital resources is in improving upon the product offerings you already have. The stronger the base of your company, the more you are going to be able to build upon in the future.
In the unpredictable insurance marketplace we operate in today, overextending at the wrong time can have horrendous consequences.
LESSON: Resist the urge to chase “new” and focus on incremental improvements to base of your business.
Niche Branding Wins
From the outside, founding an insurtech startup agency might appear sexy and exciting. The reality is, we face with the same challenges local independent agencies are faced with, except we also have to create the technology to power our business.
It’s so easy to lose focus. Some process we thought would work won’t or a piece of technology will blow up. Throwing it all away and starting fresh seems so appealing.
Then I remind myself of the lessons shared above. All we have to do is stay true to our foundation. Let innovations and iterations happen naturally.
We are resolute in focusing on our niche, renters and multi-family home insurance, and let the shiny new ideas fade away on the whiteboard.
It’s the strength of our brand in the niche we’ve committed to that carries us through the hard times.
I have a good feeling the same will be true for you and your agency.