Over the past decade, local insurance agents for home/auto policies and employee health plans have been challenged by the arrival of national direct companies, which enable consumers to comparison-shop for insurance in the same way they shop for any other service.
One of the results of this industry change has been a boom in direct marketing by regional and national insurance companies, aimed at both individual consumers and businesses. Larger insurance firms, who have traditionally relied on general advertising to drive brand awareness, are increasingly implementing direct marketing campaigns emphasizing value.
“The local agent is still a factor, but you’re seeing a lot less loyalty — so many companies are using direct marketing to establish their brand,” notes Grant Johnson, president of Brookfield, WI-based marketing agency Johnson Direct, which recently completed a direct mail campaign for Blue Cross Blue Shield United of Wisconsin. “[There is] a lot more niche insurance out there and, therefore, a lot more niche marketing.”
Given the sheer number of different policies, insurance companies and resellers all operating in a complex, competitive market, it’s not surprising that direct marketing in the industry runs from cutting-edge to old school.
Michael Nixon, president of Birmingham, MI-based insurer AGIS, primarily works with traditional insurers to offer group health packages to businesses. Identity Marketing has worked with Nixon on primarily offline direct marketing efforts.
“While we do offer an online newsletter, our recent campaigns have been a little retro, focused on direct mail postcards followed up with phone calls and maybe a blast fax,” Nixon explains.
Even the larger insurance firms, who have heavily relied on general advertising, have turned to direct marketing to fine-tune these messages.
“It’s a soft insurance market, so our marketing has to show that we’re adding value,” says Angela Kauffman, director of US marketing operations for Chicago-based Aon Insurance. She explains that Aon combines offline mailers with online tools such as e-mail and webcasts to “hit people from multiple angles.”
In the consumer space, Johnson suggests that while the insurance industry is relying more on direct marketing, it is aware that its audience tends to be older. He explains that “Insurance companies are moving into emerging technologies like social networking at a much slower pace than other industries, like travel or retail.”
But, the growth in niche insurance is placing an added premium on improved back-end tools to better identify and track potential customers.
“You’re seeing a lot more segmentation with specialty insurers,” says Johnson. “So you’re seeing better list management, better targeting, better e-mail and better Web sites.”
Of course, businesses or individuals are often receptive to insurance
offers for only a brief window every year — during the time when their current policy is up for renewal.
“Our branding and awareness campaigns tend to run throughout the year,” Nixon explains. “But, timing is everything when it comes to insurance — you need to continually accumulate information for your database, including when [a customer’s] policy is up.”
Aon Insurance: Direct mail poster
The company sent out a direct mail poster
to businesses as a teaser for a campaign
based on an offer to benchmark a company’s current insurance for free to determine if they’re paying too much. It followed up with an e-mail and then a call. The company had a high recall rate — 25% — from the successful direct mail piece.
Blue Cross Blue Shield United of Wisconsin: Self-mailer
A self-mailer for a Personal Choice healthcare product had a 2.13% response rate, double the rate of previous direct mail pieces. According to Grant Johnson, head of Johnson Direct (which handled the campaign), the mailer’s success was primarily due to the testing of formats and content, which eventually determined that comforting, easy-to-understand headlines generated the largest consumer response.
TAPCO Underwriters: Postcard mailer
Identity Marketing created this postcard mailer as part of a six-pronged direct mail campaign targeting local brokers and agents, with a goal of positioning TAPCO as a resource that remains top of mind. The company says it often varies the delivery channel, using postcards, letters, e-mails and faxes for the same campaign.