Does your company offer more than one product? When companies first start, the normal approach is to focus on one product and offer quality to the market. Then when reaching a substantial foothold, offer your product to other markets to grow revenue, and create ancillary products that support the main brand of the company for further growth. It seems the progression of your company dictates the growth strategy you implement at each stage.
What if your company only ever offered one product, year after year? There are some companies that have dedicated their brand and purpose to reliability, efficiency, and quality for one singular product and continue to be successful in the marketplace.

Consequently, should a company build its brand or product(s) to go wide or go deep?

Since the common approach is to go wide when your company has reached the appropriate stages, I was very interested in speaking to a company that offers one product to its market. I had the pleasure of interviewing the Vice President of Sales and Marketing for the Eastern Region, Dick Aracich, from Delta Dental Insurance Company. Delta Dental Insurance Company, along with its affiliates, provides dental coverage to more than 33 million people in 15 states, plus the District of Columbia and Puerto Rico. That’s right — no medical insurance plans at all. Even though they offer dental insurance only, their market presence is outstanding, with nearly 1 out of every 5 Americans who have coverage getting that coverage from Delta Dental Insurance Company or one of its affiliates.
Here are some insights from our conversation.

AMM: Who and what is Delta Dental?

Dick: Delta Dental Insurance Company is part of the Delta Dental Plans Association (DDPA), but a separate company in its own right. DDPA is a nonprofit system of independent Delta Dental member companies based in Illinois, which leases its brand and products to companies selling them, such as Delta Dental Insurance Company and its single holding company system, which includes Delta Dental of California and Delta Dental of Pennsylvania. There are no public or private shareholders; most Delta Dental-affiliated companies, including ours, are governed by boards consisting of company stakeholders such as large employers, benefit consultants and dentists. The Delta Dental system started just over 60 years ago to provide dental insurance at a time when dental insurance was not yet offered by employers, and the medical insurance companies were uninterested in dental.

 Delta Dental is one of the last large insurance organizations whose focus is on a single product line, though we have several types of dental plans to meet a variety of customer needs and budgets. We have focused on “doing one thing and doing it well” — so well, in fact, that nearly 90% of our overall premiums go directly to pay claims for care, not for administrative expense and/or to shareholders. And the overall Delta Dental system, which includes other Delta Dental association members along with us, has been awarded the Reader’s Choice Award for Best Dental Carrier over the past 8 consecutive years.

AMM: What are the benefits of being a single line carrier?

Dick: Delta Dental’s executive leadership team and more than 3,000 employees dedicate themselves to creating and refining the quality of our dental insurance plans. We are a “best in class” carrier that focuses on value, and as a result we help save money for our clients who offer benefits to their employees. Delta Dental specializes in dentist satisfaction, quality networks, efficient payment processes, and customer service. Our clients want no extra noise, just great dental benefits. For our large clients and government entities who directly fund their employees’ insurance costs, using Delta Dental plans can save them millions of dollars in claims and administration, which increases their bottom-line profits, as well as increase retention and satisfaction among employees.

 AMM:  What sales approach has been the most successful as a single-line carrier?

Dick: Other than ensuring a quality product that meets the needs of our clients, we take every opportunity to share our passion and knowledge of our dental insurance plans with potential clients, in addition to forming partnerships with brokers and consultants and sometimes, other health plans. We approach educating our potential clients and partners as a team effort. The more we work directly with consultants and their clients, the higher the success rate is for winning their business.

 AMM: What are the sales challenges in an industry where medical carriers offer a wide range of products?

Dick: As there are great benefits for Delta Dental being a single-line carrier, there are also challenges. Some medical insurance companies offer dental plans and use the sales strategy of bundling the two products – sometimes even offering a “discount,” when medical is bundled with dental. These companies often position their bundled dental as “added on for free,” or at a discount, even though the true costs of the program are hidden in the overall pricing. Some clients may take the viewpoint that it is easier or more cost-effective to select a single medical insurance company for these two very different kinds of benefits. That’s why Delta Dental needs to carefully explain and show how we deliver better value, with greater cost transparency, when we are selected as their stand-alone dental insurance provider. We continue to address the hidden costs and extra fees found in medical carriers who market and package medical plans together with dental.

AMM: With politics and technology impacting the insurance industry, what do you predict will be the future of the products you offer?

Dick: Since its inception, the Delta Dental system has appealed to the market regardless of changes over the years, though we know we can’t rest on our laurels. We will continue to adapt our market outreach to changing market conditions in order to meet the changing needs of our clients. If companies have other dental carriers, then we will continue to educate them on our “best in class” products and how our offerings can offer advantages over those of our competitors.

Delta Dental is expanding its focus into the small group and retail arena, including public health exchanges, where we are currently the largest stand-alone carrier in the nation by volume. The Affordable Care Act mandates small group and individuals to obtain pediatric dental insurance, which for us has been springboard to create strategic partnerships with companies that offer medical insurance only.

Considering this interview, I would say that if your company or organization is looking to make an impact for the long haul, then creating a wide range of products doesn’t necessarily need to be the strategy you take. It could be. As a foundation, a company needs to have a singular, deep presence of who they are in their market, and enough “wiggle room” to expand product offerings or create add-ons for new opportunities. It doesn’t mean that you have to build ancillary products for entirely new markets in order to grow profit.

What strategic approach does your company take?