New York Life Weighs Risks, Rewards of E-MailSuppressing its skeptical tendencies, New York Life Insurance Co. is testing e-mail for customer acquisition and retention.
The New York company quietly is using e-mail to tap loyalty company Upromise Inc.'s member base. It also is dipping into its house files to push extra products aimed at college savings to existing customers.
"We're trying to see if we can use the Internet or e-mail to get responses from customers that we can then drive to our agents," said Patty Favreau, first vice president and chief marketing officer for life and annuity at New York Life.
Though online direct marketing is being used, the goal is not to recruit business directly. All marketing aims to generate leads for the career or independent agent, New York Life's main channel for selling life insurance, annuities and mutual funds.
But e-mail is being eyed with interest. It becomes the latest channel to solicit leads, along with a toll-free number, business reply cards, agents, mail and telemarketing.
New York Life is cagey about disclosing actual numbers or delving too deeply for fear of disclosing competitive information. But it admits that e-mail is targeting a demographic being overlooked by the company: younger, more Internet-savvy professionals. Plus, older customers now may be comfortable with e-mail. It also adds to frequency of contact. Biggest of all, e-mail is cheaper to send across a large number of policyholders.
"[E-mail is suited] for someone who has a new need and is maybe crossing into [a new] category or someone who's become a new parent," Favreau said. "We might be losing that subsequent sale. In fact, we're losing that customer sale in a lot of cases."
Handled by e-mail marketing firm Digital Impact, the insurer's campaigns clearly serve different mandates.
Take Upromise. New York Life is one of many partners participating in the Boston-based network. Upromise members accumulate savings for buying products and services from its partners. It is this base that New York Life has been e-mailing to since April.
E-mails to Upromise members are for acquisition. Messages urge these consumers to click on the link for more information on life insurance or annuities. Upromise sends the messages on New York Life's behalf, keeping the member list to itself.
"I think that could be something that we do more of with them and other affinity groups that have an Internet membership base," said Bob Ellwanger, corporate vice president for life and annuity at New York Life. "That's the one we're working with right now. There could be others in the wings."
The e-mail effort for college savings began in November. New York Life segmented part of its house files to identify candidates. These customers are asked to prepare for their children's college education costs. Life insurance, annuity, mutual funds or 529 plans are offered.
As with the Upromise messages, the college savings e-mail links to a landing page on www.newyorklife.com that ultimately directs recipients to a New York Life agent.
"If e-mail marketing were proved to be successful for us, we might consider using e-mail to drive up customer acquisition on the credit card side," Favreau said. New York Life has a credit card program with Bank One.
The company did not disclose frequency of e-mailing, nor the quantities dropped. But it admitted that it was late to the party.
"It took a long time for us to believe that we could generate excitement using e-mail," Favreau said. "We hadn't seen any evidence. We know that e-mails are cheap. So if they can work, it'll be great for us.
"But our business is very face-to-face, personality intensive, and we just found that it was very difficult to communicate the brand via e-mail," she said. "So we're just running a series of tests this year to see if that can do anything for us."
For the moment, direct mail seems to perform for the company. Advantages over e-mail include a tactile association and the ability to more clearly reflect the firm's logo.
"People feel more personally connected to the mail they receive versus the e-mail they receive electronically," Favreau said, citing a recent Pitney Bowes study.
And e-mail will have to measure up to mail's return on investment.
"The metric we're looking for is $3 of commission for every dollar that we spend on our marketing campaign," she said.