Getting To An Untapped Gold Mine: Your Customer Base

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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).

Agents have the ability to “opt out” some of their key clients from direct contact.

Agents should also look for systems that allow them additional functionality, such as the ability to extract a target database, create a fast path for fulfillment routines and track responses to campaigns to develop future targeting strategies.

Mainframe systems are not designed to accommodate many of the activities fundamental to a successful policyholder marketing initiative. Fortunately, with the advent of the Internet, valuable technology tools have arisen.

For example, with a Web-enabled database, data can be extracted from mainframe systems to an environment that is much more flexible. Once the data is in the database, opening up different views of the data to different user groups is easy.

Whether it is an agent that sees client activity, commission roll-ups or product/program information, or the carriers marketing department undertaking campaign analysis, Web-enabled databases can support each user seamlessly. Linking proactive marketing channels, such as direct mail, telemarketing, statement-based marketing, or Internet/e-mail marketing with existing channels (customer contact center, agents, company Web site) is a way to truly maximize the potential of policyholder marketing.

Another potential tool for agents is CRM systems. “CRM” conjures up different definitions from each individual, with an overriding skepticism of the end value vs. price to build. If a company has invested in a CRM system, to assess how well that system supports a policyholder marketing effort, it might ask whether the system:

Allows third-party service providers (telemarketing bureaus, fulfillment organizations, third-party administrators) to integrate their data.

Allows them to open up views of a campaign to an agency force operating on different systems.

Allows them to track campaign response metrics and store historical response results.

Allows an analytical model to be developed to drive an ongoing marketing effort (flexibility).

Many current CRM systems were not developed for policyholder marketing efforts. Rather than looking at this as a failure of the CRM system, one should see it as an opportunity to work with enhanced data that has been “cleaned up” and is accessible. Integrating specific policyholder marketing software tools is easily accomplished in most cases.

There is an untapped gold mine in your customer base that should not be ignored. Current technology tools make it easy to maximize the value of your most important asset.

is president of ReMark North America, based in Toronto, Canada. He can be reached at Brad.smith@remarkgroup.com.


Reproduced from National Underwriter Life & Health/Financial Services Edition, October 31, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.