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Filling your niche.

Filling Your Niche

How to turn an internal service into an income generator.

Like many associations, the National Association of Professional Insurance Agents (PIA), Alexandria, Virginia, largely depends on nondues income for revenue. During the last few years, our traditional products--education and insurance--had faced heightened competition. At the same time, our industry had been hit with increased agency consolidations and repeated attempts by consumer activists to "reform" the industry through the political process.

PIA's challenge was clear: Build programs to help members handle current challenges but at the same time strengthen our membership base and develop new sources of income.

The seeds of an opportunity had been sown in 1987 when PIA established its marketing, research, and development division, primarily to build research capabilities to serve internal needs. Its staff consisted of a full-time vice president with both research and management responsibilities, a part-time research analyst, a part-time data-entry specialist, and a part-time administrative assistant.

To help PIA become market driven--instead of product driven--the division organized a 1,700-member panel to participate in quarterly research surveys. PIA selected panel members randomly from its membership. Each panel member completed up to four 8-to-12-page surveys for one year. We recognized each participant with a certificate, which helped boost response rates to nearly 50 percent.

Survey results helped us develop member profiles, including their businesses, management skills, and attitudes toward industry issues. This research process also helped us assess attitudes about existing member programs and determine interest in new products and services the association and its for-profit subsidiary, PIA Services, Inc., could develop. New programs developed through this process include publications, a facsimile equipment program, videotapes, and audiotapes.

The division's computer capabilities increased significantly to support research processes. For example, PIA acquired special personal-computer software, which streamlined survey data entry and enabled analysts to present information with increasing sophistication. PIA also acquired graphics software, which enabled the association to quickly produce illustrations and charts to convey its research findings to our leadership.

As a result of its expertise and initial successes, the division was inundated with staff and committee requests to help develop and market programs.

Success in conducting several paid research projects for Moody's Investors Service, New York City, industry consultants, and other clients gave us the confidence we needed to take the next step: to propose to PIA's leadership that we conduct research on various topics and then publish the results for a fee to our members. We could compile information on current management practices that could help PIA members increase their professionalism and competitive position within the industry. And we could carve out a new member-benefit niche for PIA that could bring in needed nondues dollars.

Proposing a new product was one thing. Accomplishing it was quite another.

Assessing needs

First, we had to test the idea with our members, using the same methodical process we use for all our products. Applying our product-selection criteria was the starting point (see sidebar, "Product-Development Criteria").

Next, we interviewed a group of members and key management staff who were selected because of their position or expertise in the industry. They were asked to cast their votes, on a scale from one to five, on the topics they considered best to research.

Out of 15 topics, we chose 7 to further test with research panel members. Six topics tested extremely well among all member segments. Assuming that some topics might eventually prove impractical, we planned to research at least three.

"Compensation of agency sales staff" was the first product we researched. This topic, for producers as well as customer service reps, had shown the greatest market potential among our membership.

Before we proceeded, a legal review was conducted to ensure PIA had complied with antitrust and other laws on statistical collecting and reporting.

We worked with PIA's legal staff throughout product development on reviews of the survey instrument, promotional materials, publication drafts, and book titling. Our staff attorney also prepared copyright and hold-harmless statements, which were included in the final publication.

Preparing the marketing plan

Our next step was to chart the marketing process and develop a plan. The plan included detailed financial analyses and sales projections that showed how an investment from PIA's service corporation could be recouped within a year. We found a joint venture between the service corporation and the insurance foundation to be a natural collaboration. The foundation would fund agency management practices research as well as development and product phases for the published reports. The foundation's name would appear on the research instrument and on final products. This recognition would give the foundation an identity to establish itself within PIA and give the research and products added credibility in the marketplace. The service corporation would fund product marketing, including promotional activities, order processing, fulfillment, and customer service.

Our financial analysis projected the fixed and variable costs each organization would support using this scenario and recommended splitting all income in direct proportion to these costs. Using this formula, the service corporation would net 60 cents of every dollar earned, and the foundation would net 40 cents of every dollar earned.

Developing the products

The plan was approved. We were ready to begin our research. Based on key compensation issues we identified among our industry affairs staff, we drafted a survey to take to PIA's company relations committee and to foundation trustees.

After four months of rewriting and pretesting, we randomly mailed the 15-page survey to 2,390 members. Our sampling of five major agency size segments was based on a spreadsheet analysis of expected response rates similar to response rates experienced on earlier member surveys.

To guarantee confidentiality, we asked participants to give us their mailing address on a separate card to be returned in the same envelope as the survey. The cards would then be separated from the surveys as they arrived at PIA's office. To ensure an adequate response, members who returned surveys were promised complimentary copies of the published research results.

The process worked. We got a 25 percent response rate, and participating members received a valuable resource from the association at no direct cost.

By any measure, this research project was gargantuan--more than double the work of any previous research project PIA had undertaken. We hadn't realized data entry alone would take more than three weeks; that frequency runs by our part-time analyst would take nearly four weeks; and that analysis, charting, and writing draft reports would take two months.

Because our products would receive association and industrywide distribution, production processes were also far more complex and extensive than anyone had imagined. After two months of formatting, editing, and proofing, we distributed drafts for review to the 18 PIA members and staff we had initially involved in the product-development process.

Work did not slow as we awaited comment from our review board. We worked with designers to create promotional materials that would introduce our new product to the membership and to the industry. A brochure and four-page letter were the heart of the direct-mail package. By making minimal changes to camera-ready artwork, we customized each for the particular audience targeted. We sent print advertisements to our state and regional affiliates to reinforce the message. And we also worked with PIA's communication division to implement our public relations campaign, which included news articles, features, and press releases.

Our public relations campaign began 45 days ahead of the planned book publication; our promotion went out about 30 days ahead to comply with Federal Trade Commission regulations, which require mail orders to be filled within 30 days of receipt.

Finally, it all came together. It's too early to tell how well our products will do, but preliminary indications are that sales should come close to projections. As other titles follow--and the product line becomes more established--we'll have a better idea whether the products helped PIA meet its creative, organizational, and financial objectives.

What is important now is that our research and development function is proving its usefulness to PIA and to its membership in a far broader context than ever before.

Product-Development Criteria

Establishing formal product criteria greatly enhances the product-development process in an association.

Here are the product-selection criteria adopted by the PIA Services, Inc., board of directors when it was established in 1984: All new association products and services developed for National Association of Professional Insurance Agents members must be products that * facilitate member growth, professional development, profitability, and efficiency; * meet an identifiable member need on a national basis; * can be delivered at a price members can afford. * can be delivered cost-effectively; * add to the positive image of PIA; * generate a reasonable profit to the service corporation; and * present opportunities for profit sharing with our affiliates.

Miriam T. Meister, CAE, is vice president of marketing, research, and development for the National Association of Professional Insurance Agents, Alexandria, Virginia. She is also executive vice president of the PIA Insurance Foundation.
COPYRIGHT 1991 American Society of Association Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:includes related article; management of professional associations
Author:Meister, Miriam T.
Publication:Association Management
Date:Jun 1, 1991
Words:1482
Previous Article:Finding your niche.
Next Article:Volunteer protection update.
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