No industry has gone untouched by technological advancement, including the insurance industry. In recent years, the push model of selling insurance has begun to flail and insurers are finding it increasingly difficult to sell and market insurance to customers. Omnichannel distribution models are gaining momentum in the insurance industry due to their ability to reach a multiplicity of customer segments, beyond an inch deep and a mile wide.
An omnichannel distribution model in insurance is an approach to sales and marketing that provides customers with multiple channels to purchase insurance from. This includes through an insurer’s website, via phone, in stores and over other online, mobile and social applications. The goal of omnichannel distribution is to provide customers with a seamless purchasing experience by combining different channels and workflows.
Here we look at a few reasons why omnichannel selling is proving to be of value to both the insurance industry and its customers.
- Targets Specific Customer Segments
The necessary degree of insurance coverage varies for everyone. With that in mind, insurance sales and marketing campaigns shouldn’t be the same, yet the quality of experience should be consistent across the board for all customers and potential customers.
For instance, look inside the households of varying generations–the silent generation, baby boomers, Gen X and millennials–their home locations, possessions and the number of and relation to household members will be entirely different from one generation to the next. A millennial is more likely to be living in cramped city quarters with a handful of roommates, whereas a baby boomer will most likely be living in a home with an attached garage alongside their spouse and a few children in sprawling suburbia. With entirely different lifestyles and needs, different generations makeup entirely different types of customers.
Omnichannels allow insurers to reach customers through different channel mediums with different types of content, all while ensuring an exceptional customer experience. Infosys, a company that specializes in consulting, technology, and outsourcing, notes that customers have changed preferences on service channel types over the last two years, and, as a result, agents must reconsider how to successfully co-exist with new digital channels. These channels can act as the conduits in which insurers can redefine or support service offerings and forge new customer relationships through campaigns that target specific customer segments.
- Opens the Gateway to the Millennial Generation
Millennials are especially difficult to sell insurance to. As we recently noted, they are a generation that increasingly resent traditional forms of marketing and advertising. Instead, they have a fondness and appreciation for sales and marketing messaging that is highly personalized. Adding to the difficulty of selling to this emerging segment, most millennials (employed or unemployed) don’t have to even consider purchasing insurance until the age of 26 when they’re forced to leave their parents’ plan.
And when they must abandon their parents’ plan, millennials won’t have the same sense of loyalty to that insurer. Instead, in their independence they search for insurance companies that appeal to both their values and budgets. To reach millennials, insurers have to offer them with a service they understand and care about. Insurers can build knowledge and credibility through the content found on their website, social accounts and mobile campaigns. These digital channels should be intuitive and limited in industry jargon because most millennials don’t understand insurance jargon, and rather prefer to understand what a policy entails at first glance. Agents can follow up on millennials’ engagement with advice in personalized emails or by sharing policies that are popular among millennials.
- Uses Data Intelligently
Omnichannel distribution models eliminate blindly grappling for customer leads in the dark. Using customer data, insurers can clearly locate and target customers with information particularly relevant to them. This eliminates arbitrariness, because, after all, if you try to market to everyone, you really market to no one. Insurers can now gain insight into data and make more informed decisions on the optimal channels and content to market to customer segments. This helps to quickly identify the business value hidden in vast amounts of data in the big data’s proverbial needle-in-a-haystack.
Aviva’s CDO, Andrew Brem, offers his take on data to diginomica. Brem advises that digital technologies now make it possible to find relationships in the data that weren’t previously visible, such as people who lock their windows carefully also have a tendency to drive more carefully. Data can help insurers understand customers’ risk value, but can also help to pinpoint what channel to best market the customer through, like direct mail, social media, advertisements, email campaigns or even cold calls.
- Keeps Insurers Connected
When used together, data and differing channels can help to develop highly personalized insurance offerings that drive quicker conversion. With a slew of devices, insurers now have the opportunity to remain connected with customers. Omnichannel distribution not only keeps insurers connected but maintains a customer centric experience that is of value and appropriate for the customer. Regional managers can distribute content that relates to their region or insurance specialty. Meaning that the right sales, marketing or informative content is sent to the right customers in the right context or format – either in person, print, digital or blended.
Infosys encourages insurers to create compelling device-agnostic user experiences with responsive and adaptive user interfaces that work across multiple devices. A responsive UI in conjunction with social tools and ad services can engage with context that interact with a customer’s geographical location, time of day, channel or device type.
- Measures and Improves Strategies
Omnichannel distribution models are very appealing to insurers because they offer the ability to better understand marketing effectiveness and customer behavior. Tangible, quantified measurements allow for the future of marketing and sales to assess the effectiveness of each channel to further improve marketing strategies. Some customer behaviors and interactions that can be measured, formulated or quantified can be represented by:
- Web, social and big data analytics
- Multivariate testing on segmentation algorithms
- Cross-generational policy trends
- Churn analysis dashboards and reports
Measuring customer behavior and analytics across a variety of channels provides insight on what channels to best reach customers on, the appropriate time to engage and the types of messaging to engage with. Insurers will be better able to accelerate forward or cut back on channel and messaging types based on the success (or failure) of omnichannel distribution.
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