The Ryan Hanley Show - 221. Independent Agents Are Getting "Riches are in Niches" Wrong

Episode Date: January 19, 2024

Became a Master of the Close: https://masteroftheclose.comHave you ever been cornered into thinking that the narrower your focus, the greater your success? We're flipping that script in our latest episode, challenging the traditional insurance agent blueprint of niche specialization.✅ Join the Insurance Growth Masterclass: https://masterclass.insure✅ For daily insights and ideas on peak performance: https://www.instagram.com/ryan_hanley/✅ Hire me to speak at your next event: https://ryanhanley.com/speakingJoin us as we unravel the intricacies of niche marketing, spotlighting how a broader understanding of niches—including customer experiences and pain points—can reduce advertising costs, skyrocket engagement, and lead to scalable agency growth. Forget about confining your business within a geographical box or a specific industry; it's time to redefine niches to align with the evolving expectations of today's consumer.As the tides of market volatility rise, such as those experienced during the COVID-19 pandemic, the resilience of a well-diversified client base becomes undeniably clear. This episode shares tales of businesses that floundered by putting all their eggs in one industry's basket and suggests a pivot toward targeting a customer mindset to build a more stable foundation.Plus, get a sneak peek at my new coaching program, Finding Peak, designed to help you lay a solid groundwork for your business before chasing aggressive growth.We wrap up with a heartfelt thanks to our listeners and an invitation to join the conversation—because your engagement is more than just a metric, it's the heart of our community.Learn more about your ad choices. Visit megaphone.fm/adchoices

If you focus solely on one niche, you can only scale so far. Those markets are only so big. Now, sure, depending on the size of the niche and depending on how many actual opportunities are out there, can you make a lot of money? Sure, you can. But I feel like we have to expand our mindset and our ideas around what a niche actually is

and what it takes to capture the maximum amount of opportunity inside that niche. In a crude laboratory in the niches in the wrong way? Today, we're going to talk about that because this is an idea that I have fought my entire career. Not because I necessarily think that niches are bad. I don't. I'm a firm believer in niches. But I feel like we've made the idea of a niche far too small. And we're not thinking about the modern consumer. We're not thinking about how people buy, the customer experience they're looking for in 2024, and what a niche actually is. So that's what we're going to dive into today. That's what the show is going to be all about.

Before we get there, guys, if you love this show and you're listening to it and you're not subscribed, whether that's on YouTube or on whatever podcast network you listen to, if you're listening to auto only, please subscribe. And if you're on YouTube or watching somewhere on video, we'd love for you to like this video. And if you have comments about what you hear here, share in the comments. I respond to every comment that I get and or at least try to. And I use those comments as basically filters or lead gen for new questions, new ideas, new points of interest that you may have to answer on this show. I love you for listening to this show and I love doing this work. And I'm very proud and happy and excited to be focused specifically on teaching independent insurance agents and this independent insurance industry on how to grow.

So with that, let's talk about niches. All right. Now, I know some of you are going, why the hell are you pronouncing it that way? I don't know why the word niche comes out of my face in that way. I know some of you say niches, niches, and I don't know. My face does not want to make the expression to say niche. It wants to say niche, and I have no idea why. But that's what it is. Jason Cass loves to make fun of me for saying it that way, and so do others. I don't necessarily care. Hopefully,

you can understand when I say the riches are in the niches, you understand what I'm saying. And because I'm not saying niche, niche, which feels like an inappropriate way of pronouncing that word. All that being said, guys, I have for a long time fought this idea that you have to operate in a niche to be successful. Not because I don't believe that niches are important. I do. I do believe that having an expertise, having an industry class that you know inside and out is absolutely a great way to rapidly grow your business. However, I think that when you grow your business on a specific niche that possibly is geographically constrained, say a certain type of business, plumbing contractors within 50 miles of your agency location, you have drastically narrowed your ability to scale your business. So if you're just single person shopper, you're just a one producer show, can you make enough money to be happy? Sure you can.

So if your goal is just to get to a number that allows you to pay your bills and go on a couple of vacations and stuff, I think a narrowly focused geographic niche is the cleanest, easiest, and fastest way to get there. However, if you're looking to scale your business, if you're looking to scale whether it's growing a book of business as an individual producer or as an agency owner, or if you're an executive in a larger regional or super regional, even national brokerage. If you focus solely on one niche, you can only scale so far. Those markets are only so big now, sure. And depending on the size of the niche and depending on how many actual opportunities are out there, can you make a lot of money? Sure, you can. But I feel like we have to expand our mindset and our ideas around what a niche actually is and what it takes to capture the maximum amount of opportunity inside that niche. Now, before we get there,

I just want to give you a few stats on niches because I don't want you to think that somehow I don't actually believe in niches. I do, right? So niche websites spend, this is coming from a website called wecantrack.com. This is a survey that they did. Niche websites spend 25% less on advertising due to a more focused target audience. So you spend less because you don't have to push. When the message is targeted and leans on the experience and pain points and expertise of a certain niche, then you don't have to spend as much because you don't have to hit them as many times to get them to convert because they can sense that you understand their problems. That makes a lot of sense.

Visitors spend 40% more time on niche websites than general websites. Obviously, that makes sense. If you are, let's say, a Buffalo Bills football fan like I am, you could go to ESPN and get some generic contrived kind of take on what's going on with the Bills. Or you could go to someone who follows their every move, goes to every practice as insiders inside of the clubhouse and the organization and get kind of a deeper understanding of what's actually going on in that organization if you're that nerdy about sports. Makes complete sense and it's that way for everything. No matter what your interest or take is, that makes a lot of sense as well. I

think we can buy that. Some more stats here. Email subscription rates on niche websites, 55% higher because of the tailored content. Obviously, if someone's a generalist and is talking about a broad range of topics, you are less likely to subscribe than if you are going to get the exact information that you want every single time. Makes sense. Products sold on niche websites see a 30% higher average order value. So I am not a huge advocate of selling insurance directly online. Certainly not in the way that most of us view it. But if we did, what this is saying is you could average, and this is probably speaking more towards like products, retail, consumer goods, et cetera. However, what you're seeing

from these four statistics is that across the board, having a niche is better for your business. That is not the argument that I'm making. The argument that I'm going to make and the theory that I'm going to put in front of you over the remainder of our time together is we need to broaden our scope both in the way we view niches and how we approach the niches that we choose to target. So it was actually, and I did a bunch of research on this because I couldn't believe it. It was Pat Flynn, who was an internet marketer that was coming into prominence around 2009, 2012. I used to follow him pretty closely back in the day when I was first getting started with

digital marketing. Pat Flynn is actually credited with saying the riches are in the niches, but fortune is in the follow-up. That's a portion that most people forget, it seems. So, you know, Pat was basically saying, understand that targeting your content to a specific group, because he's a digital marketer, targeting your content and your advertising, et cetera, to a specific group is going to be the best way to get rich. But you're not going to actually build that kind of flywheel, which leads to a fortune without a proper follow-up sequence, which is what he was talking about. So we often hear the first part.

We don't hear the second part. I agree with him. Follow-up and process systems is really the rub to setting yourself apart and creating. We'll talk about the insurance flywheel in future episodes of the show, but creating that flywheel effect where your prospects become clients who then become bigger clients who then refer clients who then drive more prospects in and that perpetual cycle that just keeps going on and on and on,

which allows you to really scale. Again, things you don't need if you just need to hit a certain number and then you're just going to coast. But if growth, scaling is what you're interested in, these are some of the concepts that we need to wrap our head around. So give Pat Flynn credit for the riches are in the niches, but the fortune is in the follow-up. Very, very interesting. And then, you know, just kind of putting a capstone on what I'm about to tell you, I found this stat from, let's see, this was from, the source is LSA. It's on a website that I found, the Invoca blog, which looks like a call tracking website, call tracking software website.

But 78%, I've heard similar numbers, so this makes sense, 78% of insurance consumers call a business after running a search. And this speaks exactly to what I am advocating for in this video and how we think about our business. So when we think about the riches are in niches, oftentimes what we're thinking about is going out, going to insurancexstates.com or Zywave or what's that? One of those information sites and pulling a list and having that list be tailored

exactly to plumbing contractors and 50 miles from our business. And we start emailing them or calling them and we create information for them, maybe on our website, maybe we do some videos specific to them and I think that's great. What we miss is mindset. When we're building out a niche, we oftentimes, and I see this just over and over again, which is why I'm creating this video, is that we think, how do I like to prospect this niche? How do I, the producer, the agency owner, how do I like to prospect this niche? How do I like to service this niche?

And that's great, except what if that prospect does not want to be marketed to that way? What if they don't want your customer experience? You could be the best plumbing contractor insurance agent in the country. But if you are not also aligning your prospecting process, your customer experience, your sales process, your onboarding process, your rating, review, retention process, if you're not also aligning with the mindset of your particular customer, then you are leaving a tremendous amount on the table. And the reason that I'm able to say this with absolute certainty and confidence is because in my previous work, this is what we did. So I have all the

agencies that I've built, all the agencies that I've worked with in a capacity where I was actually working there, not my clients, my consulting clients, because this is a decision that they all make independently. And if you're interested in the consulting side of what I do, go to masterclass.insure. There'll be a link in the description, whether you're listening audio or on the YouTube channel, you can go to masterclass, M-A-S-T-E-R-C-L-A-S-S.insure, I-N-S-U-R-E, masterclass.insure. And depending when you're watching this video, you can either sign up for the wait list if we haven't launched yet, which we'll be launching in February. And after we launch, you'll be able to, that'll take you right to where you need to go to learn more. So what I've always done is I've always preferred to be a master generalist, and my niche was a mindset

versus a particular industry class. And here's why. We're currently in a hard market as of January 16th of 2024. We're currently in a hard market in the property casualty insurance space. Rates have been consistently going up, maybe a little less so much on the commercial side, but certainly on the personal side as well. Although commercial has felt it, certainly geographically commercial has felt it and across different industries, et cetera. But let's take, before we get to the hard market piece, let's take a more prime example, which is COVID. During COVID, every restaurant in the country essentially was shut down. And if your niche as an independent insurance agent was restaurants, bars, and taverns,

you were screwed. Absolutely positively. And I know agencies that had to sell. I know agencies. What's up guys. Sorry to take you away from the episode, but as you know, we do not run ads on this show. And in exchange for that, I need your help. If you're loving this episode, if you enjoy this podcast, whether you're watching on YouTube or you're listening on your favorite podcast platform, I would love for you to subscribe, share, comment. If you're on YouTube, leave a rating review. If you're on Spotify or Apple iTunes, et cetera, this helps the show grow. It helps me bring more guests in. We have a tremendous lineup of people coming in, men and women who've done incredible things, sharing their stories around peak performance, leadership, growth, sales, the things that are

going to help you grow as a person and grow your business. But they all check out comments, ratings, reviews. They check out all this information before they come on. So as I reach out to more and more people and want to bring them in and share their stories with you, I need your help. Share the show, subscribe if you're not subscribed. And I love for you to leave a comment about the show because I read all the comments. Or if you're on Apple or Spotify, leave a rating review of this show. I love you for listening to this show. And I hope you enjoy it. Listening as much as I do creating the show for you. All right, I'm out of here. Peace. Let's get back to the episode. That basically went out of business because such a large portion of their

revenue came from this one single niche that, you know, when something, a black swan event like COVID happens, they are completely unable to handle that because they're so over-indexed on that one niche. So if you only write one type of business and regulation changes or the government steps in or a disruptor comes in and puts that type of business, you know, drastically reduces, say, how much revenue those companies are making or those companies have to downsize, etc. Those changes impact your business substantially, right? Maybe you're slightly down market from that. It might take you six months, a year, et cetera, to feel the impact

on your revenue, but you're creating opportunities for black swan events to put you out of business or drastically impact your growth, right? A big part of my just philosophy on life is that success isn't so much driven by our wins, but by our ability to sustain losses. And what I'm advocating for in this particular video, and particularly how we address this idea of niche marketing and having a niche, is that one, I think most classes of business in the, we'll just call it the entire small business segment, maybe even some of the smaller middle market businesses, but we'll say the entire small business segment, because I know some of your middle market guys will get your underwear all bunched to that idea,

is that they're basically all the same. The difference in the questions that you have to ask from a plumbing contractor to a warehouse, to a wholesaler, to a bakery, the difference in questions are so minute. It's like, I mean, how many actual questions that are going to impact underwriting between a plumber and a warehouse and a bakery? Do you actually have to ask, right? You got to ask about property, you got to ask about liability. There's going to be a few unique questions to each individual class, but otherwise you're just, you're basically rolling out either a package or a BOP with workers comp. That's going to be basically the same, just different class codes and commercial auto, which will be basically the same, just maybe different class codes,

et cetera, different drivers and different maybe driving exposures. But essentially, you know, we're not talking about these huge swings in difference. So if you, and in personal lines, everything's exactly the same. So my point in saying that is we can niche down to, you know, young affluent and personal lines or whatever, or we can go after homeowners only, or, you know, homeowners built after a certain range, families with multiple cars, package policies. If we're going personal lines, commercial, we can go after whatever. You can pick plumbers, contractors, you can pick wholesalers, you can pick a specific type of professional class or whatever. But are you targeting mindset? And my point is, if you're going to target one specific

niche, then you understanding their mindset opens the entire niche up to you. And I would advocate that we don't limit ourselves to a particular niche, that we limit ourselves to a type of mindset, the mindset that allows with how you like to do business. Because let's say we go back to our example about the hard market, right? So if we're in a hard market, that means prices are going up. It means what if all of a sudden every carrier in your state decides that contracting classes are just killing them and they just slam up rates on the contracting classes. And now all of a sudden you have people leaving left and right,

people going out of business, people just dropping their insurance, telling you that they'll get back to you in three months. They're just going to operate without insurance for a while. I mean, these are all the crazy things that people do during hard markets. And if that happens and you're relegated to one particular industry class niche, or maybe a couple industry class niches that are of similar ilk, you are again, putting yourself in a position where your revenue can be drastically impacted, where instead, if we open ourselves up and make our niche a mindset, such as what we did in my previous agency with the human optimized model is we wanted people who were unhappy with

both the local traditional face-to-face hand-to-hand combat kind of slow methodical method and were unhappy and dissatisfied with the do-it-yourself, no one to call and answer my questions, feeling like I'm all alone model. Because that's really the two options that we have in our industry right now, this very traditional model and the DIY model that's kind of online. And what I was doing at my previous agency and what the, you know, one of the core concepts behind the human optimized model was, our niche was a mindset. It wasn't an industry class.

Our niche was you wanted the ease of business of DIY, but you wanted to make sure that you had an agent that you could call if things got squirrely. It was a mindset. We sold, we marketed to, our niche was a customer experience. It was a customer mindset. Because my belief is with the right set of triggers, right set of forms, right processes

and systems, you can write a plumber just as easy as you can write a warehouse, just as easy as you can write a bakery, just as easy as you can write an attorney. If they have the mindset, if that's the way that you want to market, if you want people who are okay with remote employees, who are okay with text messaging, who are okay with using a self-service portal for downloading certs, et cetera, that type of customer experience is what I actually think the vast majority of people who purchase commercial insurance and personal insurance in the United States, this is what I actually believe they want. That mindset becomes your niche.

And then you can maybe dial in from a geographic standpoint and increase your hit ratio even more, even though you will be reducing your pool when you limit your geography, the more you limit your geography. If you're marketing on mindset, you're not closing yourself down to a particular niche and opening your agency up to the whims of carrier pricing, carrier appetite, et cetera. I mean, I know, you know, right before, you know, I exited my last agency, we were starting to see, you know, certain carriers

who had had a wide open appetite for certain types of risks are to really narrow down. And now if all of a sudden your market access or the appetite of a particular carrier or a set of carriers is closed down to you, that niche no longer exists for you. You can't write it. Right now you're going through wholesalers and doing all kinds of stuff. So my point is, and many of you will disagree with me, and there's been so much written, you know, you Google these things and see how many articles have been written. I know that the vast majority of you who are listening to this will not and do not necessarily agree, nor will you adopt this process. However, for those of you who can kind of see beyond the traditional mentality of, I

have to pick one specific industry class and become the absolute best at it. So I understand their concerns, right? Which I think is valid, but limiting that if we think about niches through mindsets, right? If you think through, because oftentimes people don't care that, you know, you know, the cost per pallet for, you know, cost per pallet for a wood pallet contracting business. I mean, they get it, and it does add validation, and it adds professionalism to what you do, sure. But is that really why they buy? Or do they buy because they believe you're going to solve their problem? I think that a better niche, or at least a niche to consider, or maybe this is just another tool

in your tool belt, you know, have your two, three niches over here that you do very traditionally. And then think about adding a niche that is broader, that opens you up to more opportunities, that allows you to be more flexible with the accounts that you bring in. Think about creating a niche around mindset, around the type of person, the type of belief structure, the type of customer experience that they want, that matches what you and your people and your agency are able to deliver. That's going to make you feel good. That's going to make them feel good. You will connect one on a deeper level. And two, you don't have to be this industry expert. You don't have

to be this deep industry expert, you can be an insurance expert, and an experience and problem solving expert, which I believe creates a broader set of sustainability to both your agency and ultimately to the industry as a whole. Guys, I know that this is kind of a radical take. I am very interested in your thoughts. If you're listening to this in audio, come to the YouTube channel, leave your comments, or find me on social media. I would love to hear from you guys. You can DM me if you want it to be private

or just post something on one of the channels about how crazy I am for this idea if I'm completely wrong. If you're watching on YouTube, I would love your comments. I'd love to know what you think. Where did I go wrong? What am I missing in thinking through this idea of niche as a mindset versus niche as an industry class, or even a type of a policy type, right? I mean, policy type might be even worse because you could be a cyber liability expert. And then all of a sudden cyber goes up 300% in a year and it becomes very, very difficult for you to manage that. Now, granted, the initial premium increase is going to make you money, but it does create a lot of holes and gaps that people can then, that disruptors or other agents can come in and fill. And now all of a sudden you're

battling to keep your clients. For me and and my business philosophy is, do the things really well, which creates sustainability. So then you can take your moonshots on radical scaled growth, right? That's the philosophy that I practice in our industry, because I think our model, our compensation structure, how our business works, the fact that we are really just the distribution arm of a set of suppliers, that we have to think through sustainability in our business across the board first and make sure that we have that rock solid foundation upon which we can build the programs that allow us to scale. Would love to hear your thoughts. I love you for listening to this show. If you want to get on the newsletter list and be the first to know about the launch of my coaching program, Finding Peak, go to masterclass.ensure.

I love you for watching. I'm out of here. Peace. I'm going to shaboos. Thank you. Thank you. Close twice as many deals by this time next week. Sound impossible? It's not. With the OneCall Close system, you'll stop chasing leads and start closing deals in one call. This is the exact method we use to close 1,200 clients in under three years during the pandemic. No fluff, no endless follow-ups, just results fast. Based in behavioral psychology and battle-tested,

the one-call closed system eliminates excuses and gets the prospect saying yes more than you ever thought possible. If you're ready to stop losing opportunities and start winning, visit masteroftheclosed.com. That's masteroftheclosed.com. Do it today.