Getting To An Untapped Gold Mine: Your Customer Base
In the past, most insurance company information technology systems have not been designed to correlate and provide marketing data that would allow agents or carriers to take specific action.
While we have seen a trend toward investment in more flexible and advanced systems, often those systems have been contemplated with specific existing distribution channel methodologies in mind, limiting their use for policyholder marketing initiatives.
The challenge now is for insurance companies and agents to ask from where their new growth will come. As they ponder options, technology-driven policyholder marketing is often ignored or dismissed as conflicting with the face-to-face channels that drive the industry.
In reality, most insured customers receive no communication (except billing statements) from their insurance company or broker in any given year. Customers want and will purchase more coverage. We all know your best customer is an existing customer, and yet this phenomenon exists in the insurance industry.
If an agent or insurance company ignores the potential to sell their customers an additional product in a very short timeframe, there are clearly issues holding them back. These often include agent conflict, other resource priorities, inexperience (where to start?) or reliance on agents to own the customer relationship and drive communication.
The biggest mistake is the reliance on agents to be in close communication with their customers. When looking at policyholder marketing, we see that most agents do not have any type of system to contact existing customers on a mass scale. They are set up to deal with face-to-face selling.
Agents recognize they are missing opportunities but are more concerned with not being able to keep in touch with the smaller clients who helped them grow their business. With an expectation to add many new policyholders each year, it is no wonder agents on average are touching only a small percentage of their customer base annually.
It is clear that carriers and agents are not doing a good job of marketing to existing customers. Technology-driven marketing initiatives could boost their sales to existing customers (with lower acquisition costs), increase customer loyalty and keep them involved and informed.
Agents should embrace a technology-driven cross-marketing strategy, and insurers should make sure that:
Agents know the products being marketed, which policyholders are being targeted and when the campaign will run.
Agents receive compensation for the right to target their customers (but adjusted to reflect a reduced level of involvement in the program).