Social media’s popularity has transformed the way customers interact with insurance ﬁrms. It oﬀers a whole new touchpoint and an eﬀective digital marketing, sales, and customer service channel. Progressive insurance companies are proactively using social networks to enhance loyalty, improve turnaround time, and reduce cost-to-serve. Though the ROI for social media initiatives can be diﬃcult to measure, communicating with clients regularly creates a consistent message and enhances customer engagement
Unleashing the Power of Social Media
From large global corporations to small-time stores-around-the-corner there is a scramble to get on the social media bandwagon. The ‘social’ phenomenon has swept the online culture in the past few years and captured the imagination of businesses. The opinions they express in social media are highly trusted, widely shared, and can have a signiﬁcant short- and long-term impact on your brand. Here are few quick statistics:
By 2017, the number of worldwide Internet users will reach 3.5 billion, half of the global population—Forrester Research There are more than 1.5 billion active social networking users globally—McKinsey 90% of young adults, aged 18 to 29, use social media—CMO Survey 57% of consumers say they are inﬂuenced to think more highly of a business after seeing positive comments or praise online—CMO Survey About 25% of angry customers use social media to vent about their experience—Shankman As of 2015, Facebook has 1.59 billion active monthly users—Statista Twitter had 320 million active users at the end of 2015
It is no surprise that insurance players consider social media as a game changer, making a signiﬁcant impact on the way they do business. Social Media supplements traditional sources with a wealth of information, providing a signiﬁcant value proposition. Blogging, networking, and instant messaging facilitate meaningful dialogue between customers and businesses.
Typically, social media allows users to create, distribute and receive specialized content. It also gives control to the end users, where they can provide feedback, participate in discussions and in turn form deeper, more meaningful relationships with businesses. The reach of social media is extending every day and insurers have realized the importance of adapting to social media platforms and signiﬁcantly increasing their online presence.
This whitepaper examines the areas where social media has a signiﬁcant impact in the insurance industry.
Social Media can Inﬂuence Customer Decisions
Social media is seen as the most inﬂuential marketing tool—one that allows customers to post their experiences, blog, and tweet on a range of topics. Insurance companies are investing signiﬁcantly to develop social media capabilities to understand how customers feel about their products and what they can do to enhance customer satisfaction.
In the insurance industry the immediate impact of social media is felt in the following key areas:
Marketing: Having a sound social media marketing plan and presence allows you to connect directly with your customers. If done right, businesses can build strong customer loyalty, increase their net promoter score, and customer base. This not only reduces the costs, but also gives insurance companies the opportunity to reach out to prospective buyers. Here are some key areas where social media can be an extension of your marketing team:
Cost-eﬃcient Route, when compared to conventional channels like agents, tele-callers and sales representatives. Blogs and interactive sessions can help companies reach prospective buyers very easily. Customer Education: It is a strong medium for educating customers about the importance of insurance and the suitability of diﬀerent types and ranges of insurance policies for them. Besides, the informal style of communication, supported by real-time, active content on risk prevention measures (for example, good lifestyle for health, eﬀective self-maintenance for vehicles, and industry best practices for safety) generates the scope for enhanced interaction with customers, which is not possible through conventional channels. Customer Service: Providing active customer support through Facebook, Twitter and YouTube to existing customers can help companies develop good long-term relationships with them.
Analytics: Not only do social media platforms give companies easy access to customers, it is also an opportunity to gain actionable insights on industry trends and customer demands. Insurance companies often rely on past data to understand their risk exposure through their insurance products. Gaining insights into future trends and making accurate predictions is one of the most powerful advantages of social media. The experiences and expectations revealed by customers on social networks are an unprecedented data resource for insurance companies
For example, in the health insurance sector, information about the lifestyles of customers can help companies gain valuable insight into upcoming trends. With the proﬁle information of the existing and prospective consumers, companies can also design a ‘Dynamic Premium’ for their customers and enhance customer loyalty.
Knowledge Sharing: Social platforms allow and promote knowledge and information sharing within the insurance fraternity. Portals designed for the exclusive use of insurers and agents can help companies share information with each other discreetly, and thrive in the constantly evolving industry landscape.
A Four-Pronged Approach to Social Media
The key to a successful social media strategy rollout is to have a road map for where these technologies can be used. At a higher level, the critical focus areas where social media engagements prove beneﬁcial are:
Strategic: Dedicating resources to social media is a strategic investment in the long run, considering the changing industry landscape.
Transactional: Social media platforms help insurance companies cut transactional costs involved in acquiring customers and selling insurance products.
Informational: Social networks help in building a strong database of prospective and actual customers, along with demographic and behavioral information.
Infrastructural: Insurance companies can leverage social platforms to collaborate and build an infrastructure for the shared services oﬀered by the companies.
Challenges to a Successful Social Rollout
Even as social media opens up a world of opportunity, it brings its own set of challenges for companies. Here are the key challenges they face in social media implementation:
Data Security assumes grave importance with customers sharing a lot of their personal information on the Web
Deﬁning and Rolling Out a Comprehensive Social Media Roadmap is a must to educate and train individuals
High Cost of developing a new insurance product and brand requires tweaking of social media strategy
Social Media is Integral to a Robust Insurance Marketing Strategy
Since the ﬁnancial crisis of 2008, insurance companies are faced with the uphill task of rebuilding their brand and customer loyalty. Given that the insurance business is based on low-interest, low-engagement commodities, customer engagement is the critical diﬀerentiator whether you win or lose a customer. There has long-existed a notion that insurance is sold and not bought. With a comprehensive social media strategy, smart insurance players are set to change this thought. Social media platforms will allow customers to :
Social media platforms can be used for:
Blogs and Public forums: Opinion pieces provide a strong basis for companies to actively discuss insurance products and policies. The marketing team invites Subject Matter Experts (SMEs) to write blogs or publish their video interviews on the products to create awareness and generate interest. This can help support and educate customers.
Employee and Agent Portals:Employee and agent portals are catalysts for collaboration, enabling eﬀective and meaningful communication amongst employees, as well as between employees and agents, for knowledge management. Social networks provide platforms where employees can share and discuss suggestions for a product released and bring relevant changes to improve customer satisfaction. They help integrate innovative insights in real-time, improving the overall productivity of the workforce.
Customer Self-service: Social media has opened alternative channels for educating customers and reducing overall marketing costs. As customers rely more on social networks to ﬁnd out about products and services, enterprises have to form a holistic relationship and encourage customers to use their portals and products.
Social media is a critical marketing tool that can help insurance companies not only in marketing their products to customers at reduced costs, but also in gaining visibility into market trends and inﬂuencing them. However, for its successful implementation and use by a company, it is extremely important to encourage, educate and empower employees to share their opinions and advice on social media.
As customers go online, social media platforms enhance customer experience, build brand loyalty and increase customer base. Social media is not just a tool that complements business and marketing strategies; it has changed how the insurer sells and how the customer buys. By being part of the social inﬂuence network insurers can start conversations that focus on consumer concerns rather than product features.