Most insurers rely on traditional underwriting, accident prevention and claims tactics to bolster their bottom lines. However, savvy insurance leaders know that strong results require another critical component: powerful insurance marketing communication.
Whether you’re focused on new business growth, or would just like to be more profitable, results-oriented marketing may be the difference between success and failure. Powerful communication creates brands that entice desirable business and command adequate rates.
You probably think of marketing as a critical tool for generating new business. But did you know that marketing can also hike profits by increasing business retention, improving loss ratios and stabilizing employee turnover? It’s true.
Don’t make the expensive mistake of leaving marketing out of your strategic plan – or worse, leaving your marketing up to someone else. Unlike many other aspects of the insurance business, insurance marketing is proactive instead of reactive, and a purposeful way to add dollars to your bottom line.
The following points will tell you how to increase quality submissions, improve loss ratios and retain profitable customers – All without adding to costs!
One specialty carrier was able to decrease its marketing budget by 35% while at the same time tripling its revenues and boosting brand awareness within its target market. This company began by calculating the cost per exposure and cost per lead for each of its marketing activities. Here’s what the company learned:
- Tradeshows and golf sponsorships had extremely high cost per exposure and cost per lead.
- Advertising had low cost per exposure, but high cost per lead (it was hard to identify that any leads were generated).
- Direct mail had moderate cost per exposure and the lowest cost per lead – plus prospects and marketing activities could easily be tracked throughout the sales cycle.
- Published articles had lower cost per exposure than advertising and high cost per lead (again it was hard to track leads).
The company drastically revised it marketing approach by attending four tradeshows per year instead of 28, sponsoring five golf tournaments each year instead of 22, eliminating the bulk of its advertising, and allocating the majority of its marketing budget to direct mail and published articles. The results speak for themselves – three times the revenue at two-thirds the cost.
A while back, Progressive Auto Insurance did something unheard of in the insurance industry. It provided its customers with price quotes from the competition. Then, it counseled customers to go with the company that could save them the most money – even if it meant not choosing Progressive.
Why did they do it? Because it was unique, it generated attention, and it cultivated an amazing amount of customer loyalty. This is an example of a unique selling proposition (USP) in action.
To hone your company’s USP, carefully review your competition to ensure that your offering is truly different. Most insurance companies sell peace of mind. So, if you want to command a higher price, you’ve got to go beyond peace of mind. If you think service sets your company apart, then describe the aspect that is different rather than generalizing. Think of State Farm’s “Like a Good Neighbor” and “Here to Help Life Go Right” or Allstate’s “You’re in Good Hands with Allstate.” Each of these companies could have said, “We give great service.” What a difference!
Next, make sure that your offering specifically relieves your customer’s pain-point. In the words of Bill Gates, “Your most unhappy customers are your greatest source of learning.”
In a nutshell, if you take the time to learn your customer’s pain points and hot buttons, then you will know how to structure your offering so that it’s worth more to your purchaser. You may find that some items with high-perceived customer value, have low delivery costs.