|Insurance Agency Business Plan - 5.0 Marketing Strategy and Implementation|
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5.0 Marketing Strategy and Implementation
With the opportunity to compete in a $4.7 million market, Convenient Insurance has outlined the following SWOT analysis:
5.1 SWOT Analysis
SWOT stands for strengths, weaknesses, opportunities and threats. The following SWOT analysis identifies the internal and external factors that are favorable and unfavorable to Convenient Insurance’s objectives.
5.2 Strategy Pyramid
5.3 Unique Selling Proposition (USP)
Unlike its competitors, Convenient Insurance will strive to be the low pressure, insurance agency of choice. While it is no secret that insurance agencies make their living off commissions, the owners of Convenient Insurance have adopted their personal views and believe that honesty is the best policy.
The owners are taking their clients’ needs to the next level – by mandating each client be required to take a needs based exam to determine which needs are being met and which are not. This higher level of evaluation is unheard of and the owners of Convenient Insurance are honored to be able to provide what they believe is an invaluable service.
5.4 Competitive Edge
Convenient Insurance stands head and shoulders above its competitors with its broad product and service offering, need-based selling requirements, high tech interfaces and professionalism and integrity.
5.5 Marketing Strategy and Positioning
Convenient Insurance will utilize a product differentiation strategy. Through this type of strategy Convenient Insurance will focus its efforts on holding itself apart from its peers through its broad selection of products and services delivered professionally by Certified Financial Analysts. The agents will only sell services that are needs based. This will eliminate wasteful and (expensive) insurance products and the customer can feel comfortable knowing that his choice to purchase insurance was well worth it. (Unlike their peers, Convenient Insurance will avoid ‘scare’ tactics, which ‘scare’ customers into purchasing excessive, wasteful and expensive insurance products because an overly aggressive agent needed the policy to meet his monthly quota requirements).
5.5.1 Positioning Statement
Convenient Insurance is a full service, independent insurance agency, providing a broad selection of products and services, specifically tailored to the individual needs. All services are based on the individual clients needs and delivered by Certified Financial Planners – all in a low pressure, professional, confidential environment.
5.5.2 Pricing Strategy
Convenient Insurance will utilized competition based pricing – that is pricing based on competitor’s prices – which is standard for the insurance industry.
5.5.3 Promotion and Advertising Strategy
Convenient Insurance will rely on a marketing blitz to get the word out. The owners are members of the local chamber of commerce and will be hosting a grand opening chamber event. Other promotion strategies include:
The website will have the Convenient Insurance address and business hours as well as links to Trusted Choice carriers, daily blogs, and social media including Facebook (personal lines) and LinkedIn (business lines). Customer will have the ability to view their policies, submit questions, and make payments. Weekly/monthly the website will be updated with current insurance news and media links. Customers will be sent surveys/polls for opportunities for constant contact and open the lines of communication.
5.5.5 Marketing Programs
Initially Convenient Insurance will rely largely on its IIAT’s connections. However, marketing is the primary method to solicit new business and Convenient Insurance will rely on its marketing/media consultants to help with the initial marketing blitz. The local campaign (Chamber of Commerce grand opening) and the online blitz (it is expected that Convenient Insurance website will be linked to the top 40 search engines) will be the ideal way to start off the campaign.
In the local community, Convenient Insurance will host semi-annual sponsored events – such as the VIN etching days and safety seat inspections. In addition their commitment to the community will be evidenced by their corporate sponsorship of a local school sports team.
5.6 Sales Strategy
Convenient Insurance has plans to grow revenues 10% in Year 2 and 10% in Year 3. These goals will be met by increases in volume. Additionally volumes are expected to increase with the additions of staff.
The three year hurdle is the minimum requirement prior to being considered for direct appointment. The three year window will demonstrate Convenient Insurance’s proven abilities to run and operate the business. The window will establish a payment and credit history as well. Note: The online business, while appealing, is secondary to the brick and mortar business; the business plan takes a more conservative approach and those incomes have been excluded from the analysis. After the initial 3 years of operations, Convenient Insurance will re-visit this opportunity and possibly include this line item in their financial goals and planning.
5.6.1 Sales Forecast
The financial analysis takes a conservative approach to revenues and assumes revenue and income streams will be derived from 3 primary resources:
This rational is used for two reasons: 1) more conservative and 2) while life insurance, annuities and business lines offer greater premiums, these are the most difficult to attain. The analysis assumes an income growth rate of 10% in Year 2 and 10% in Year 3. The analysis assumes the new agent ramps up revenue, earning 50% by Year 2 and full income streams by Year 3.
Table 5.6.1 Annual Sales Forecast
5.6.2 Sales Programs
As insurance agents, the staff at Convenient Insurance works on commissions. Following are approximate commission amounts for each of the different insurance products:
Convenient Insurance has obtained legal advice to make sure that they are not in any violation of any non-compete or any contractually related issues (based on the owners’ history with Mutual of Texas and State Barn). Convenient Insurance was formed as a Limited Liability Company (LLC) in the State of Texas. The entity is wholly owned by its owners Greg and Maria Bell.
Convenient Insurance is registered business with the county and the state. Convenient Insurance has obtained its Federal Identification Number (EIN). Convenient Insurance has also obtained an Insurance Agency License with the state and its Certificate of Good Standing the State.
Please refer to the Chart Below:
Table 5.8 Milestones
5.9 Exit Strategy
Initial debt recourse will first be to Greg and Maria Bell as personal guarantors, the secondary source will be recourse to collateral and tertiary recourse will be the sale and disposal of assets. In the event the company is to be dissolved, all assets will be liquidated. Physical assets will be sold at auction and all policies will rollback to Convenient Insurance’s various independent providers.
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