This is the third article within the Marketing Imperatives Series for Insurance & Wealth Management Executives
Insurance industry competition has long hinged on scale—carriers would compete for the best shelf space in the broadest agent/broker network with the winners building the most robust risk pool. This would create pricing advantage, which in turn would help expand distribution and initiate a virtuous cycle.
Other Posts in This Series:
Over the last decade, that model was challenged as both first-time buyers and switchers changed their buying behaviors—many chose to shop online and purchase direct. Early movers like GEICO (now larger than even Allstate) capitalized on and accelerated this trend. At the risk of losing market share, nearly all traditional players either acquired or launched direct channels. However, most of these experiments faltered or failed as direct entrants could not scale against niche underwriting requirements using broad reach media and “one-size-fits-all” engagement strategy. Customers were available, but new direct players struggled to implement the necessary tools to reach and engage specific audiences on a mass scale.
Today’s insurance companies—of all types—must revisit how consumers are engaging across distribution channels. Industry leaders are transforming their digital capabilities from broad reach to highly targeted and personalized media, integrated with the rest of the media portfolio. And, they must strive to make decisions at speed around strategic market segments.
How to get started
I’ve found that companies mastering the following capabilities are moving faster and winning against their largest traditional competitors:
Addressability at Scale (AAS): This is defined as the opportunity to create competitive advantage through the ability to deliver targeted, personalized experiences to consumers. In order to have AAS, companies must develop and executive strategy around these specific customer sets:
- Addressable media planning
- Online and offline customer data integration
- Identity management
- Personalized experience design across the marketing funnel
- Measuring effectiveness at the target segment level
Optimizing Digital: Your digital media program should be the star of your media portfolio. Today’s insurance leaders understand that digital investments and competencies must be achieved in order to establish competitive advantage. Not only are these players seeing financial rewards, they’re more informed in the following areas, which enables them to make better, agile decisions:
- Size digital opportunity relative to the target
- Gain a deeper visibility into media performance
- Optimize around your specific measures of value
- Monetize social media efforts
Direct Consumer Engagement: Today’s consumers are engaging across all distribution channels and expect a consistent brand experience. Therefore, many Life and P&C companies are launching new business models to move from a broad-reach approach to a highly targeted and personalized approach. To succeed in direct consumer engagement, insurance companies must adopt the following competencies:
- Establish a business case and road map with proof points
- Support their marketing teams with specific organizational designs
- Launch, manage, and optimize your media portfolio
- Drive analytics and insight
Learn more about these topics by downloading a free electronic version of Merkle’s 2014 Marketing Imperatives.