Competitive Advantage through Digital Marketing

How insurers can drive outstanding results through automation, personalisation, and omni-channel experiences

In brief

• Insurers looking to capitalise on increased demand for protection products must enhance their digital marketing capabilities.
• Automation, personalisation, and omni-channel experiences are the key capabilities for insurers looking to boost their digital marketing results.
• With the right data, insurers can generate actionable insights to infuse all of their digital marketing activities and drive conversion.

With more business being done digitally and people spending more time on their screens, digital marketing has never been more important to driving growth for companies across industries. Because insurance is usually sold and not proactively purchased, targeting the right customers is all the more important. Done properly, digital marketing allows organisations to reach the right audience in the right place at the right time, with tailored messages and offers for specific segments.

That promise is why digital marketing investments continue to expand dramatically. eMarketer predicts that digital marketing will comprise nearly half of the $30 billion that will be spent on B2B marketing and advertising in the U.S. in 2023 U.S. Another media agency forecasts that 55% of total global ad spend in 2022, will be attributed to digital marketing.

Certainly, insurers are going all-in on digital marketing. According to a recent forecast, insurers will spend a higher proportion (45.6%) of their marketing and advertising budgets on digital channels than will banks and wealth and asset managers. These investments represent a profound shift from traditional marketing practices.

Demand for insurance products has risen in the wake of the pandemic, and that demand is coming through digital channels. Consider that searches for “insurance near me” are up 100% in the last two years, according to Google. To seize the upside, they must adopt leading practices and deliver the efficiency, personalisation, and quality digital experiences customers are looking for.

Overcoming traditional challenges

Traditionally, the Insurance industry has relied on push-based advertising such as television, radio, and outdoor. The drawbacks of this approach – lower interactions with the target audiences, poor conversion ratio, difficulty in measuring ROI, lack of feedback and engagement, and high costs – are well known. Traditional marketing practices present three major business challenges:

• Acquisition inefficiency: Customers research insurance through multiple channels and portals, which means insurers must establish a presence in many different places to meet potential customers everywhere they are. And more informed and demanding customers lead to higher acquisition costs, as well as lower retention rates over the long term.
• Limited access to data: Customers expect personalised offerings from every company they do business with. But insurers may not have complete data for all of their customers, especially those who work with agents.
• Spend optimisation: Because it is difficult to predict the success of traditional marketing practices, companies burn cash on expensive campaigns that are targeted at the masses and offer little visibility into performance.

What it takes to win with digital marketing

Success with digital marketing starts with understanding what’s possible with best practices and advanced techniques:

• Personalisation: Data-driven insights make it possible to understand what potential customers want and then categorise them and provide personalised communications and offers based on their preferences. Personalisation is critical to satisfying customer expectations and driving higher conversion rates. The potential benefits are enormous, including higher revenue, large gains in customer engagement and increased effectiveness within broker channels. One Fortune 100 insurer developed full, 360-degree views of their customers to enable more precise customer segmentation and targeted offers, as well as more effective cross-selling and up-selling and stronger lapse prevention.
• Omni-channel experience: In the multi-device world, users expect a seamless buying journey across all channels (e.g., social media, company apps, websites). Insurance customers use an average of three channels to research and buy insurance, according to Capgemini research; that means insurers must become experts in connecting and transacting in multiple channels. A multi-line insurer saw a 30% reduction in campaign execution costs by creating a centralised team to unify the customer experience across channels. It also generated 1.3 times more leads.
• Automation for cost reduction: With a clear understanding of different customer profiles and the economies of scale that social media and other channels provide, overall acquisition costs can be drastically lower than with traditional forms of advertising. The cost advantages of digital marketing increase exponentially for firms that automate key marketing processes and integrate their marketing technology. Implementing and integrating a MarTech solution helped one global insurer reduce marketing costs by 34%.

The bottom line is that marketers need to understand customer needs and preferences and efficiently execute their strategies in ways that satisfy customer needs and meet customers in the channels they prefer.

Designing, executing, and measuring effective digital marketing plans

A robust digital marketing strategy and framework will help address and capture customer mindshare and drive sales. It can even help transform the perception of insurance as a category – from transactional and non-engaging to approachable and highly valuable.

The first step is understanding customers’ needs and behaviors. It’s no overstatement to say that the better the data, the more deeply insurers can understand customer needs. The combination of behavioral and transactional data is necessary gain insights into why customers buy, how they prefer to buy, and what value they generate. The right systems must be in place to ingest data from external sources.

With the right data, insurers can generate actionable insights to infuse all of their digital marketing activities and drive qualified leads. Artificial intelligence (AI) can help insurers go beyond basic scoring methodologies to segment customers based on meaningful behavioral patterns. These insights may not be easy to generate, but their value more than justifies the effort. Customer profiles that are designed around these principles and insights are proven to generate tangible gains in retention rates, upselling recommendations, and overall sales.

Those gains often come through the effective use of content marketing across the customer journey. When insurers know what customers and prospects want, they can share targeted content via social media, email, or other channels to advance them through the marketing funnel. Content management systems have advanced considerably in recent years and allow insurers to be more cost-effective in their development, tailoring, and multi-channel distribution processes. That means higher overall returns on content investments.

With insight-driven digital marketing strategies in place, insurers can turn their attention to efficient execution. Automating marketing workflows is critical to reducing spend across platforms and media and lowering customer acquisition costs.

From lead management and content distribution to campaign management and optimisation, to feedback collection and performance reporting, there is very little in digital marketing that can’t be automated today. The payoff comes in the form of higher lead conversion, increased engagement, and, of course, lower costs. Senior marketers will also like that they can spend more time on strategic planning and less time on administrative tasks.

To measure the impact of their digital marketing investments, insurers need to set up robust performance metrics in alignment with their marketing goals. The right metrics and performance measurement tools not only track progress but also identify improvement opportunities.

A mix of key performance indicators should track customer impact (e.g., satisfaction, Net Promoter Scores), operational performance (e.g., lead generation, close ratios), and brand value. Ideally, these metrics can be tracked in real time via intuitive dashboards that offer views of performance by channel, and in line with sales and marketing targets and campaign budgets.

When insurers have good data on these measures, they can make better investment decisions, allocating resources to optimise overall digital marketing performance. Here again, the better the data, the better the results are likely to be.

In conclusion

With economic uncertainties hindering near-term growth, marketing functions are under pressure to rationalise their marketing spend, improve outcomes, increase efficiencies, and accelerate time-to-market. Such imperatives demand a marketing model that is adaptive and efficient and that can deliver rich and intuitive experiences to all customer segments. Robust content and campaign management solutions should be the top priority. Insurers need to achieve excellence in digital marketing by employing richer customer data, workflow automation, and advanced analytics to deliver highly relevant experiences across channels.