All market segments have room to grow, both in terms of account-level penetration, as well as additional products and increased participation at the employee level. Unless you are one of the largest national brokerage/consulting houses, any segment can provide opportunity far into the future. Still, that doesn't mean that each segment will be equally easy to exploit and master. Look at the chart below to see a few key characteristics by account size.
The markets in the middle (100 to 2,500 lives)
These segments are the most heavily sold, comparing the percentage of overall sales to the percentage of people employed. They also employ fewer people than either of the other groups (smaller or larger markets). On an employer basis, they represent less than 2 percent of all U.S. businesses. The market is small (in terms of accounts), but sales have been much stronger than in the other two groups (compared to the number of employees). One should expect competition at the account level to be robust, with significant capabilities at the employee-engagement level. Brokers in this space need to be excellent at both business- and consumer-level selling.
The smaller markets (1 through 99 lives)
These segments are very different than the middle group. Under-penetration is the key from these statistics, while the ability to serve this market profitably is the largest obstacle. For those who can attack this market, account-level penetration is strikingly low, and employee sales are the lowest in comparison to the number of employees in that group. These numbers are drastically different than the other two groups, making the keys here very distinct. This group is not highly competitive either at the account or individual employee level. Of course, this massive opportunity is tempered by the difficulty in reaching these masses in a cost-effective way.
The larger market (2,501 and over)
The jumbo cases represent 39 percent of all employees and 40 percent of all 2014 sales. In other words, employee-level sales are at least average for the industry. Most striking is that there are so few employers in the space, and each one represents great potential. The account-level competition should be expected to be fierce.
Again, all segments still have room for growth. The middle market is characterized by strong business and consumer-level selling challenges, whereas the small market is known for the difficulty posed by the financial constraints of serving small employers. The large market is defined by fierce account competition. Know your segment, know the numbers, and hone your skills accordingly.
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