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Four Keys to a Successful Customer Engagement Strategy for the Insurance Industry

Posted by Kristen Garvey

Thu, Sep 02, 2010

Creating customer loyalty is a challenge for every company and has never been more important than it is today. 

It’s no surprise that the challenge is even greater for low engagement industries like Life Insurance.   (I’m willing to bet you don’t have a frequent customer card from your insurance carrier hanging from your key chain or special offers filling your inbox.) That makes creating “loyalty” in the traditional sense a challenge, but not one that is insurmountable.  It just means loyalty needs to be defined within the practical realities of the insurance industry.

As MassMutual’s Pete Jacques and CMB’s John Martin discussed in our recent loyalty webinar, at the core of this challenge is the need for insurance companies to focus on increasing customer engagement and attachment within the practical realities of their customer relationship.

  1. Make the Concept of “Customer Engagement” Concrete: Customer engagement is not “one size fits all” and needs to be tailored to fit the needs of your customers. It needs to be well defined and linked to business outcomes. Once defined it then needs to be explained internally to key stakeholders in way that demonstrates the link between customer engagement and business outcomes.  By having a concrete plan and set of goals, you can build an engagement strategy and continually test different ways to increase it with measurable results.

  2. Resist the Urge: Resist the urge to blindly adopt what’s working in other industries.  The strategies you routinely see working in other industries simply don’t align with the realities of the insurance setting, but you can learn from what others are doing to customize a program that aligns with your goals. Again, it is critical to get buy-in and share this framework with others in the organization.

  3. Use Fact-based Customer Insights: Using market research as tool to understand the best way increase and maintain strong customer attachment can be accomplished through thoughtful, well executed analysis of insights from the marketplace. This is an opportunity to talk to policy holders and understand their goals and what you can do to help them achieve them.

  4. Use the Right Metrics:  It’s important not to rely on lagging indicators like renewal rates, but use more forward looking measures like the likelihood to shop a policy and recommend your carrier to others.  These forward looking measures help you understand not just the behaviors your customers are taking, but their disposition, which is key to truly understanding loyalty.

 
Learn more from Pete and John by listening to their webinar and hearing how MassMutual is driving profitability by increasing their customer loyalty.

customer loyalty

Topics: insurance research, customer experience and loyalty

Market Research Shows Meaning is Critical to "The Good Life," Regardless of Age

Posted by Dan Gersten

Mon, Aug 02, 2010

Insurance market researchA MetLife Mature Market Institute study conducted by Chadwick Martin Bailey finds “Meaning” is critical to The Good Life and the young and old have similar priorities.  The study finds meaning, particularly the importance of family and friends, is a primary component to living The Good Life for all age groups. Plus, the study found that most adults want deep relationships and to feel that they belong, in addition to a sense of purpose, financial freedom and good physical and mental health.

Still, while family and friends are of relatively equal importance across all ages and most adults want deep relationships and to feel they belong, one has to wonder how those aspects of “meaning” and the “The Good Life” manifest themselves by age, especially in this day of social media, virtual relationships and friendships with those one has never met face-to-face. 

Insurance market researchPersonally, as the father of a 22-year old Facebook user I have to feel they’re different.  And, the MetLife study supports the premise of “different strokes for different folks,” or, in this case, age groups, revealing that older adults (45-74 years of age) are more likely to belong to at least one (offline) community organization, attend a community organization function, socialize with neighbors, engage in volunteer activities and donate money or goods to charitable causes than are younger adults (25-34 years of age).  Plus, Facebook, which “helps you connect and share with the people in your life” still hasn’t caught on with older adults as it has with those younger (9.8M users 55 years-of-age and older vs. 25.6M users 25-34 years-of-age) per istrategy labs.

So, what are the implications for marketers? 

To begin with, it’s important to recognize that pursuit of meaning, purpose and The Good Life are pretty universal and span generations – and would make for a great resonating headline/tagline.  Secondly, it’s critical to understand that how those goals are defined and pursued is generational, or perhaps more accurately, lifestage-driven.  Younger adults are more likely to pursue “The Good Life” by generating a salary and “using their abilities to accomplish things that matter” while older adults are more likely to “smell the roses” and enjoy their surroundings and personal interests.  So, one headline/tagline…different executions!

Posted by Dan Gersten, an Account Director/Consultant in CMB's Financial Services, Healthcare, and Insurance Practice. Dan is a published author and former reality TV contestant on American Inventor. You never know what Dan will come up with next!

Consumer Spending Report 2010

    Topics: insurance research

    Educating Millenials and Gen-Y: Why Insurance Carriers Need to Get on Board

    Posted by Josh Mendelsohn

    Wed, Jun 30, 2010

    My name is Josh.  I am 34 years old and a pretty smart guy.  I know almost nothing about insurance.  And I am not alone.

    For much of my life I was on my parents' insurance plans.  When I moved out on my own I adopted their auto insurance carrier as my own and took the recommendation of my employer for my health insurance carrier and plan.  And as I move into the next phase of my life with my wife, dog, and baby boy, I know I need Life Insurance but am paralyzed by the process.  In February we conducted market research with over 1500 consumers about their knowledge of their insurance coverage and how they educate themselves about their coverage, finding that many young people are like me, admitting they don't have a good understanding of their insurance coverage in general, wishing they knew more.

    Of course, this presents a great opportunity for insurance carriers who target Gen Y and even moreso for those targeting Milennials, 30% of which admitted they don't have a good understanding of their insurance coverage in general, with 57% of them wishing they had a better understanding.  Sure, everyone knows the duck and the cavemen and all of the other insurance mascots and icons, but which carriers are taking it further to actually help young consumers make smart decisions about their insurance options.

    One company that seems to be moving in the right direction is State Farm. Marketing Daily reported today that State Farm is releasing new TV spots this fall and have launched a new micro site, WhyAgent.com featuring comedian Ben Posner with all the reasons (some pretty funny) why you need an agent. This is an aggressive push for this segment of the market, and our recent consumer pulse data indicates that's probably a smart move for State Farm.

     

    So how will State Farm reach this younger generation? Online seems to be the most likely channel.  According to the research mentioned earlier, over half (56%) of 18-24 year olds do their insurance research online, while 28% will call the company directly, 34% will speak with an agent and 37% will ask their friends for recommendations. State Farm's big online push with YouTube videos and the new micro site is a great approach, but with 37% asking their friends for recommendations it seems as though more robust social media strategies would have to be on the radar as well. (See what Allstate is doing.)

    Insurance market research

     

    Buying insurance can be confusing and daunting regardless of age, but even more so for the younger crowd. Like ING Direct did so well in the financial services space, there is a great opportunity for carriers to engage with Gen Y and Millenials through new messaging and media in an educational way.  And with brand awareness extremely high for all of the major carriers it seems time for many to move towards helping people buy with trust and confidence, even if the message is sent through Youtube.

     

    Posted by Josh Mendelsohn. Josh is our VP of Marketing and loves live music, tv, great food, market research, New Orleans, marketing, his family, Boston and sports. You can follow him on Twitter @mendelj2. 

    customer loyalty webinar

    Topics: insurance research, millennials

    CMB Research: Selling Life Insurance to the Under-30 Crowd

    Posted by Dan Gersten

    Tue, May 11, 2010


    Life Insurance: The investment product that protects more than just one's money

    I previously blogged the purchase of life insurance is driven by the values one holds important and not just by socio-economics and life-stage events, and that many in the "life insurance world" feel that life insurance is not bought; rather, it's sold by motivating people to want to take care of their loved ones or put another way, by appealing to their values of protection, family and tradition. 

    I also wrote this sold-not-bought orientation is primarily due to the notion that life insurance forces people to acknowledge their own mortality, something which people in general, and young adults with their whole lives in front of them in particular, would rather not contemplate.

    A recent online study Chadwick Martin Bailey conducted among 1,500 U.S. consumers this past February, showed people seem to transition from not being insured-to-being insured when they enter their 30's.

      

    Intuitively this seems to make sense and basis CMB's study:

    • 43% of adults first marry between the ages of 30 and 39 years
    • Between the ages of 25-29 years and 30-34 years there's a 27-point jump in the percent having a child 12 years-of-age or younger (19% vs. 46%)
    • The percent of adults considering "Family" an important value increases 7-points between the ages of 30-34 years and 35-39 years (74% vs. 81%)

    So, while adults in their 30's begin to buy life insurance, what can be done to sell coverage to adults less than 30 years-of-age, adults that, per Jack Weinberg, can still be trusted?  Motivate them to take care of their loved ones?   Perhaps, after all, 38% of those aged 25-29 years get married and 19% of them have a child 12 years-of-age or younger.

    Still, I can recall being that age, feeling rather indestructible, and asking this agent "Why in the world do I need life insurance?"  Especially since, if I were to die, my spouse was young enough to take care of herself and there were parents/grandparents around to provide whatever financial support might be required.  So again, "why in the world do I need life insurance?"

    Because, as I later learned, whole life insurance was more than just a way to protect loved ones; it was also a savings and investment product, building cash value against which I could borrow, if necessary, with little questions asked, since I was, in essence, borrowing from myself.  And, largely thanks to this, each of my children graduated college with no debt!

    So, how to sell life insurance to 25-29 year olds?  Per CMB's study, 32% of 25-29 years olds plan to invest in stocks, bonds, mutual funds, money markets in the next 12 months (ending Feb/March '11), suggesting that an effective approach might be to position and promote life insurance as not insurance per se, but as the investment product that protects more than just one's money!

    Segmentation Best Practices webinar

    Chadwick Martin Bailey's Brant Cruz recently presented Best Practices of Market Segmentationbased on his years of experience he has as CMB's segmentation guru working with clients like eBay, Electronic Arts, Plantronics, and Microsoft.

    Listen here.

     

    Posted by Dan Gersten, an Account Director/Consultant in CMB's Financial Services, Healthcare, and Insurance Practice. Dan is a published author and former reality TV contestant on American Inventor. You never know what Dan will come up with next!

    Topics: insurance research, Consumer Pulse, market strategy and segmentation

    Barriers to successful product innovation

    Posted by John Martin

    Mon, May 03, 2010

    Today's post is an excerpt from the LIMRA article: The Innovation Imperative, written by CMB Chairman John Martin and Walter Zultowski.

    innovationSuccessful innovation in business, in general, is a scarce commodity, although this is not for a lack of trying. According to Nielsen, there were over 122,000 new UPC's sold in the U.S. in 2008 through grocery, drug, and mass merchandize channels excluding Wal-Mart. Yet only 3 percent of these achieved more than $1 million in sales. Moreover, most of these were extensions of existing brands. Of the top 100 new items, only two were new brands.[i]                                                                                                                     

    Successful innovation in the life insurance business seems to be an even scarcer commodity.  Perhaps at the root is risk aversion.  Here we see a culture that on one hand today should welcome innovation, yet on the other hand has built successful organizations because of caution and the installation of risk minimizers.

    Discussion at a recent LIMRA meeting, however, suggests that there is a strong and growing desire for innovation among insurance industry executives, and many are thinking about, or have actually begun, initiatives aimed at jumpstarting innovation in their companies. In contrast to the consumer packaged goods business, the stumbling blocks to innovation in the life insurance business seem to be ones of both tradition and not knowing how to organize and manage the innovation function.

    So what gets in the way?

    The word "innovation" is prevalent in recent publications and conferences, yet most corporations are plagued by roadblocks preventing them from generating outcomes that are unique and well defined in terms of meeting target user goals.  Let's examine some of the main inhibitors:

    1. A cost minimizing business model that relies on following rather than leading: copying and enhancing what others have proven.

    2. A culture that dampens creativity, focusing on short-term issues such as process improvement rather than market breakthroughs. 

    3. Managers who believe that their technical advances are the only way to go.  A famous example is Edwin Land[ii] who produced a breakthrough with Polaroid film but then expended company resources trying to apply it to moving pictures.

    4. Top-down edicts that override customer-centric solutions leading to the creation of products that do not address market goals or unforeseen competitive countermoves.

    5. Highly controlled organizational contexts where information transfer is limited and suggestions from below are viewed with suspicion.

    6. A myopia that assumes the current product is adequate.  This results in the adding of features rather than a paradigm shift base on what people really need. For an example of this one only needs to look at the technology industry's products and its host of unnecessary add-ons.

    7. Sales organizations driving product development in many companies.  They are not usually interested in innovation but rather small changes in what they know sells or that addresses competitor advantages.

    8. Recognition programs that do not reward risk-taking but allow personal initiatives to flourish, such as increasing power.

    9. Errors in development such as overestimation of market size, product design problems, and the incorrect positioning of products.

    10. Lack of understanding about the position of competitors and unanticipated competitive actions.

    11. Overdue focus on market input, limiting advances to the mundane such as the "me too." For example, many of the greatest innovations started with consumers saying no, such as the Blackberry.

    12. Finally, there is the inability to effectively deal with the creative start for innovativeness.  This problem is compounded by a lack of understanding that people do not easily accept making large behavioral changes.

     


    [i] "New Products Generate $21 Billion in Sales in 2008." Nielsen Wire.  January 30, 2009.

    [ii] "Despite the tremendous success of his instant cameras, Land's unsuccessful Polavision movie system was a financial disaster, and he resigned as Chairman of Polaroid on March 6, 1980." Wikpedia.  November, 2009.

    Topics: product development, insurance research, growth and innovation