Insurance Direct Marketing 101

Insurance direct marketing is incredibly complex but there are a few fundamentals everyone should consider:

Know your audience

In order to generate sales or qualified leads, you need to know your audience. This means knowing the needs and wants of individual customers and prospects.

Target the right prospects

You can have the best product and the best offer and still fail if you target the wrong insurance prospects. Segmentation profiles and statistical models provide sophisticated ways to ensure the right offer gets to the right prospect. And some good old common sense rarely hurts either.

Use a clean, updated list

Having a clean list just makes sense -- but may also be mandated by law. Keep your lists current by following established state and national rules related to privacy. The Direct Marketing Association (DMA) can point you to services that can update your files on a consistent basis. Clean files pay dividends.

Test your creative

Testing is the cornerstone of direct marketing yet many people neglect this step. All direct marketing programs (mail, print, inserts, broadcast, and Internet campaigns) should have a “control” (standard, benchmark). Testing should involve pitting the control against an entirely new offer or one that changes one or more aspects of the control.

Personalization works

Done properly, personalization can significantly improve response. In direct mail and email marketing, getting the envelope opened is the key to getting it read. Direct marketers should live by the "four-second rule." A consumer will spend, on average, four seconds with your mailing. When it comes to e-mail, the average interactivity you'll have is three clicks of the mouse or nine seconds of time. In breaking through the clutter, first impressions really do count!

Magic words

In direct response advertising, there are a number of magic words can help create effective messaging that gets results. Examples include "New," "Free," "Now," "Easy," "Today," "You," and "Guaranteed." Using these words in a purposeful way can help you to generate interest and a response. For mail marketing, there are magic words to avoid -- words that are often blocked by spam filters. For more information, see “Web Site Marketing Tips -- Avoiding the Spam Filters”

Measure and track your results

In direct response, "It's not worth doing if you can't track results." Direct response marketing allows you to measure response in a number of ways that make sense for your business—such as by acquisition cost per customer, by list, or by distribution channel—and then adjust your approach based on the results. Remember, in direct response, every dollar has a targeted income.

Insurance direct marketers who consistently apply the fundamentals of direct marketing will be the ones to succeed in an increasing difficult environment.

Dollars for the Taking

LIMRA just published a great new report on Search Engine Optimization (SEO).

Most of the findings catalog how life insurance companies use various SEO techniques (mildly interesting) but LIMRA also gives the reader specific advice on what they can do to improve their company website like (I'm only listing a couple so they don't get made at me for giving away the farm):

• Keep the customer in mind. Content is king. Web site content that is fresh and relevant is likely to increase your rankings in search engines and will provide potential customers with the information they are searching for.

• Use text whenever possible. Don’t hide the words on your Web site in images, flash, java script,or AJAX-based content that search engines may have a hard time viewing. By focusing on text based content, you’ll benefit from having keyword-rich content on your pages.

• Don’t disregard description and keyword tags. These tags can be used to help keep content organized, well-thought-out, and pertinent to the topic.
  

A good read at limra.com -- LIMRA membership required : (
Dollars for the Taking -- Use Effective Search Engine Optimization to Drive Customers to Your Web Site

Some other LIMRA titles you might be interested in include:

Optimizing Opportunities With Online Consumers (2007)

Catching the E-Marketing Wave: E-Marketing Company Practices (2006)

Distribution Fragmentation

Although there are lots of interesting things happening on the product front, I personally think innovations in distribution are far more interesting. One example is Life Insurance Direct Marketers -- distributors selling fully underwritten products (mainly term) through some combination of advertising, online quoting and call center agents. This small niche has been gathering steam and today accounts for a noticeable slice of term insurance market share.

Dating back to the pre-web days, pioneers like Quotesmith (now called Insure.com), SelectQuote, Matrix Direct and Accuquote began advertising in print and radio. The Web changed everything and these entrepreneurs quickly embraced the new technologies. New competitors joined the fray, including Reliaquote, Intelliquote and eFinancial. Online auto insurance marketers, like Insweb and Answer Financial, got in on the act.

Many marketers came and went (anyone remember InsureMarket?). Some timed the Internet bubble and went public in the late 90’s (Quotesmith, Insweb). Many have “merged,” formed alliances, joint ventures, etc. Some have received financial backing and or have been purchased outright by carriers.

The most successful model involves providing customers with limited choice from the best carriers, drive enough volume to a couple of carriers to get top tier compensation and focus like a mad man on operational efficiencies. Advertising expertise is also a critical factor and each of the leading marketers has their own “secret sauce.”

Another model involves carriers who operate their own call center sales center marketing to some type of affinity market or association. Degree of affinity and operational excellence are critical to their success.

Where this market will go is anyone’s guess but I think it has a bright future. One thing holding the industry back are the application/underwriting/case management processes inherent in fully underwritten products. Some carriers and marketers have developed simplified issue products and have had some success. However, as long as these products cost significantly more (and they do), they will only appeal to a limited (generally less healthy) segment. Teleunderwriting, electronic signatures and electronic policies and other forms will certainly help. Most major term carriers are working on these and eventually we will see progress.

Those interested in learning more should check out, LIDMA (Life Insurance Direct Marketing Association), the new association dedicated to this channel. Some of LIMRA’s research can be helpful as well.

And of course, post your comments and questions here. Many of the Direct Marketers mentioned here have Blogs so check them out too.

PS - My apologies to Don Jackson who would tell me that this form of distribution only represents a sliver of the the entire life insurance direct marketing universe. I'll weigh in on other areas another time.

Where to start?

I've been meaning to do this for a long time. One thing that always stopped me was deciding where to start so I decided I'll just start with what's on my mind today.

One reason for creating this blog is to expose life insurance marketers to thoughts, ideas and resources that you might find useful. I'll probably go off on tangents and talk about stuff unrelated to life insurance but maybe you'll find some of those things interesting too.

I urge you to come back often, tell us what's on your mind and let your colleagues know about my blog.

So today I'm thinking about all the great stuff on the web that life insurance marketing people don't know about and should. I'll add links to these kind of places and try to keep them current.

Sure there are raw news feeds like Insurance News Net, but, if you're like me, you'd be lucky to find 1 or 2 things a day of interest and it's mostly press release stuff.

What about the A.M. Best website? Everyone knows AM Best. You probably read Best Review, but have you been to their website? It's a fantastic resource. Although much of the content is for subscribers (if you get Best's Review in print, you can get access to the site), some of it is for free. One thing you might like is their Life/Health Center news feed. They also have a great selection of podcasts. A.M. Best produces a series of podcasts on a variety of topics. They're ideal for listening to on a plane, commuting or listening at your desk. Here's what's available today:

BestDay Audio -- Get a recap of the day's major insurance news and rating announcements, along with in-depth interviews on timely industry topics. Available each weekday morning.

The E-Fusion Podcast -- Share the thoughts of leading insurance technologists, researchers and participants in A.M. Best's annual E-Fusion Insurance & Technology Conference.

The Insurance Law Podcast -- Hear leading attorneys and legal experts discuss current developments in insurance law, significant court cases and legislative issues. The discussion is led by the editors of Best's Directory of Recommended Attorneys and other members of A.M. Best's communications team. Produced biweekly.

The Insurance Marketing and Advertising Podcast -- Hear best practices in product, brand and image marketing from the top insurance marketing firms, insurance leaders, agents, brokers and other participants in the Insurance Marketing and Advertising Summit, an event co-sponsored by A.M. Best and the Insurance Media Association.

I found the interviews with Jay Jaffe ("Why Insurance Marketers Need to Take an Actuary's View of Products and Promotion") and Don Jackson ("Don Jackson Reviews the Highs and Lows of Direct Marketing by Insurers") particularly interesting.

Well that's it for today. Drop me a line.