John Hancock Supports Agents With Direct Term Sales

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The direct sale of term life insurance has enabled John Hancock Mutual Life Insurance Co. to reach new markets, secure quality leads for its agent-based sales force, and has convinced the insurer to test the approach for variable annuity and long-term-care products.


Marketplace by John Hancock, the direct response arm of the Boston insurer, dropped an approximately 500,000-piece test in the last week of April for its long-term-care insurance. The mailings were targeted to two audiences: potential LTC recipients 65 and over and children of potential recipients age 45-60, derived from lists provided by Hancock's affinity partner Source USA, a subsidiary of credit bureau Trans Union, Chicago.


Long-term care is the most complicated product to be sold through Marketplace and thus will be tested on a small scale over a long period, according to the company. Hancock has developed the LTC campaign and all of its Marketplace efforts in conjunction with the agency Ingalls One to One Marketing, Boston.


"We need to a get a sense of cycle time to see how long it takes people to make the purchase," said One to One vice president Terri Hayes.


Each piece contains a letter customized to the age of the recipient, a quiz on long-term care and information on requesting an application or more material. Consumers can call a toll-free number to speak with a licensed Hancock agent, mail in a reply card or set up a meeting with an agent in their area. The Web (www.jhancock.com.) is an added option for information or purchasing Hancock's term and annuity products.


Giving consumers choices and control over how they want to buy insurance was the goal when Hancock launched its Marketplace operation in 1997. Marketplace is the newest way Hancock is getting the best prospects into its funnel, explained Diana Scott, vice president of direct/electronic distribution.


"Selling insurance is a long process," Scott said. "It's not enough to just supply product, you need a whole back end to send people through the funnel."


The nexus of that back end is the company's agent sales force, which is being deployed in the company's 30-seat call center in Boston and also will staff a New Mexico center scheduled to open in July. Hancock has been selective in choosing which products to pitch directly to consumers to make sure it's not cannibalizing the work of its agents. It also chose to start with its simplest product, term life, to gauge reception of the direct approach.


So far, consumers have taken to the purchase of insurance much like they have self-service investing. Hancock seeks to sell simple products directly and then contact that individual over time with more targeted communications that cross-sell or upsell its more complicated products like whole life or universal life through leads to its agents in the field.


"We're entering and capturing a market we couldn't before by giving people choices," Scott said. "Consumers are more sophisticated and better educated. Now they can buy from us rather than sending them to someone else."


The Marketplace section of the Hancock site, with its portfolio planning and analysis tools, is the centerpiece of a direct sales effort that also leverages direct mail, data mining and DRTV. In 1999, Hancock projects a 1 percent response to its overall direct marketing efforts, a 20 percent application rate from initial responders and a 50 percent conversion rate from applicants who will pay an average premium of $400.


This year, the insurer will send 8 million mail pieces directly to the consumer and 5 million more through affinity partnerships. Those include partnerships with airlines to target their frequent flier customers and with most of the major online quote services to drive traffic to its site. Hancock is also the premier insurance partner for ISP/portal the Microsoft Network and has a partnership with Target Stores.


To mine its database of requesters and convert them into buyers, Marketplace sends a series of three postcards in waves two to three weeks apart. It also uses a PC mouse postcard to drive traffic to its www.apply4term.com site.


Marketplace will spend $2 million on 60-second DRTV spots targeted to parents, single parents, working mothers and baby boomers. Combinations of simultaneous DRTV and direct mail also are being tested as is the use of WebTV.
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