Depending on how you felt about e-commerce before, current events in the tech world can inspire emotions ranging anywhere from despair to gloating. But before you decide that it’s perhaps a good time to stay away from the Internet altogether, a number of experts are saying this may be the best time ever for agents to market and advertise online.
“Right now, it’s a buyer’s market,” said Adam Boettiger, founder and CEO of I-Advertising.com in Portland, Ore., an Internet-advertising consulting firm. “The rates are dropping, competitors are going out of business, the market is correcting itself and everything is highly negotiable. Every dollar that you spend now on marketing and advertising is probably worth about $3 compared to what it was about three years ago.”
Now that everybody’s been brought down to earth vis-à-vis the immediate impact of the Internet on insurance sales, one practical question remains: How can retail insurance agents best choose and utilize the right e-marketing tools to stay viable, add value for their customers and increase profitability?
No more snake oil
“Independent insurance agents need to be very leery of the Internet hype,” Boettiger advised, adding that sometime in the next two or three years, many agents are bound to be approached by companies telling them they can reach millions of people on the Internet, and offering to build them a one-page website or put them on a mall.
“Agents need to be very cautious about how they spend their money, simply because a lot of these statements are quite untrue, very overpriced and won’t really accomplish what the agent wants to do,” Boetigger said. Instead, there are far better options for agents, like purchasing a domain name (which Boettiger suggests should contain no hyphen and be easy to understand over the phone), and having a full-page, functional website.
“If I were an independent agent, I would definitely have a website no matter what percentage of people were online,” Boettiger said. “In radio advertising you can always say, ‘Go to www” and then list your domain name…Perhaps you need to test the waters in radio or print or what have you. The key is to test, test, test—and then learn from it, and then test some more.”
While budget is always a major consideration, Boettiger said it is of paramount importance for agents to remember that any website is the equivalent of a storefront. “First impressions are lasting impressions,” he said. “In order for the first impression to be a good one, you need to not skimp on your website. By that I don’t mean that you have to have a 40-page website. I mean that you have to pay a professional design person to do it properly.”
But of course there is no one solution that will fit every situation. And advertising online is merely another way, along the lines of a print campaign and television, to communicate and establish a relationship with customers or new prospects.
While there are many different ways to advertise online, many people automatically associate the rectangular banner with Internet advertising, but there are numerous other vehicles that could produce qualified leads.
Agents can also purchase text links in insurance areas of a website. Or, for example, an agent living in Redmond, Wa., could purchase the keywords “Redmond” and “insurance.” Every time a person does an online search for something related to “Redmond” or “Redmond insurance,” the page of results would come up, but the agent’s advertisement would come up alongside or in line with those results.
“It could be a text ad that says ‘call so-and-so at this number for great insurance rates or for a free insurance quote,'” Boettiger said. “It could be an ad that runs vertically or on the right-hand side of a column [a skyscraper]. It could be a rich media ad where they are allowed a little bit more opportunity to interact with the advertisement.”
“Rich media” includes HTML formatting, which means the color and graphics of a web page can be brought into ads and e-mail. Included in that category is streaming video and streaming video e-mail, which can easily be imbedded in newsletters.
But Boettiger emphasized that there is no single “cure-all” that will work in every situation. Some nationally based insurance companies, rather than having regional agents purchase their own advertising campaigns, may let agents participate in an advertising pool with the carrier. In this scenario, the agent takes a percentage of his/her revenues and contributes them to the carrier, which does a national campaign. The agent then gets all the leads within a particular ZIP code area or a certain range of ZIP codes.
E-mail explodes
But perhaps the hottest e-marketing tool on the scene today is what is known as “permission” e-mail, often referred to as “opt-in” e-mail, where a customer or a prospect has indicated that he/she would like to receive e-mail newsletters or offers from a company or an organization.
“What we’ve learned in the last couple of years is that it’s 20 times more effective than banner ads on a cost basis—five times more effective than direct mail,” said Stephen Diorio, president of Stamford, Conn.-based IMT Strategies, which has done extensive research on permission e-mail and released the report, “Permission E-mail, The Future of Direct Marketing.”
“We also learned [permission e-mail has] brand implications,” Diorio said. “If you do it wrong—by not asking permission, not investing the time—you could just completely burn a client relationship…Our research shows if you ask permission and actually invest the time in building an online relationship, it’s very brand positive.”
The many advocates of permission e-mail maintain that it provides a fantastic opportunity for agents to reach all of their customers at least two to three times in a year and cross-sell more effectively. It is also a highly measurable medium.
“Say we mail it to a list of 50,000 people who have indicated that they would be interested in receiving information on insurance opportunities,” Boettiger said. “We can tell whether all the addresses were valid. We can also tell how many people actually opened it, assuming that if they opened it, they read it. Then we can further track how many people opened it and then responded to the offers.”
“Every e-mail becomes the front door of their agency,” said Andrew Witt, vice president, marketing and sales of Los Angeles, Calif.-based Insurance Broadcast Systems (IBS), which provides turnkey ways for agents to send multimedia e-mail to their clients. “They can have products in those e-mails that insureds can quickly scan and click through.
“Within this most powerful marketing tool…is something called Customer Relationship E-mail (CRE),” Witt continued. “That’s where the person receiving the e-mail has an ongoing relationship with the person who’s sending it to them, like an insurance agent. Insurance agents own those customer relationships. They are in a fantastic position to take advantage of CRE marketing.”
Witt also predicted that streaming video e-mail will become a big part of permission e-mail “because sounds and images just speak louder than words.” For example, an agent who wants to do a campaign on a certain type of coverage can go online and select a video from IBS’ library of streaming video content. After selecting an appropriate video, a text message to insureds can be composed and e-mail addresses entered. “They can send out that e-mail to one person, 1,000 or 10,000,” Witt said.
Permission e-mail is designed to be effective for even the smaller agents, according to Witt. In the case of IBS, costs start “at $1 per e-mail sent, but it can go down as low as 30 cents depending on the number sent,” he explained. “An agent can buy a bank account of e-mail that he can send at any time, including access to our entire video library.”
Sending online newsletters is another powerful, cost-effective way agents can communicate with customers on a regular basis and cross-sell products. Customers can click through on stories that interest them that also tie in with products they might want or additional coverages they might need.
“Let’s say I want to send out a newsletter every three months for my personal lines insureds,” Witt said. “There are lots of newsletter vendors out there that do these…It might be any topic, it might be car phones and auto safety. It might be how to install a baby car seat. It might be various home safety tips that a lot of people would find valuable and they might forward on to other people. A real key point for agents is providing that personal risk management, small business loss-control service to clients.”
Diorio added that perhaps an even greater opportunity lies in the fact that the insurance industry above all others, except perhaps the flower industry, has the greatest opportunity to take advantage of scheduled alerts, or what he termed “event-triggered marketing.”
“The insurance industry has a very high percentage of revenue that can be causally linked to specific events: the birth of a child, marriage, college graduation, the purchase of a car,” Diorio explained. “Any major life event that you can anticipate, the insurance agent has something to sell.” After collecting information about those events, e-mail programs can be developed in anticipation of the occasions, and offers can be built around them.
Gather ye e-mail addresses
Of course, nobody expects the average agent to go out, learn a new technology and start tackling all of these methods on their own; developing and producing, for example, a streaming video e-mail campaign from the ground up. A simpler start would be for agents to start gathering e-mail addresses in a systematic way.
“My informal survey…tells me that about 15 percent [of agents] are gathering customer e-mail on a regular basis,” Witt said. “Agents need to gather e-mails, but they have to do so wisely. That means they need to have a policy in place for how e-mails are going to be gathered and explicitly state what they’re going to be used for.”
One example of how this can be done is if an agent is communicating in an offline way with his/her customers, through, for example, a newsletter or a renewal letter that goes out once a year. There is an opportunity in that correspondence to inform customers that the agency is moving more of its communications online to improve the quality of service to customers and to request e-mail addresses.
Another current buzz word—”trickle marketing”—refers to the ability for agents to do marketing in a way that doesn’t inundate their customers and themselves.
“That means that [if] I’m going to send a blast e-mail to 2,000 people, an agent’s worst nightmare can be that 25 percent respond, because he/she doesn’t have the ability to do follow-ups on all of that,” Witt said. “Instead of enhancing customer relationships, the agent has angered those customers that have requested the agent to contact them on a particular coverage because nobody calls back in two weeks.”
E-mail marketing tools exist that let agents send things out in more of a “trickle,” allowing them to maintain ongoing communications and at the same time, gauge those communications so responses won’t overwhelm their employees.
“On the client acquisition side…you can’t just buy a list the way you could for direct mail because people do not tolerate unsolicited e-mail [spam],” Diorio said. “But there are credible ways of doing it. You can borrow relationships. You can tag along on somebody else’s newsletter. You could be invited into a chatroom, or you could do things like partner co-marketing, where you actually team up with another business and share their clients. There are plenty of matchmakers out there who get you invited to the party.”
Maximizing customer relationships
While the news that “e-mail is good” may not surprise a lot of people, the real news might be that a lot of the focus going forward is geared towards working on the customer relationship. After all, customers have to explicitly agree to have these ongoing relationships with agents.
“In addition, you have to manage things like frequency and content,” Diorio said. “You can’t arbitrarily send people 50 e-mails a month if in fact they don’t want to be treated like that. More and more companies are realizing that politeness implies giving people what they want when they want it.”
According to Rick Morgan, executive vice president for San Diego, Calif.-based ConfirmNet, the highest priority for agencies should be to do a better job servicing and communicating with their existing customers. He suggests that agencies could do surveys and questionnaires on their sites, to learn more about the needs of their customer base.
The agencies could then take that information and, instead of just collecting ACORD-type information, ask about such things as a customer’s hobbies, pets and kids—”all stuff that would give an agent an opportunity to better understand potential sales that could be made to those customers,” Morgan said.
Others have expressed the hope that a big trend in the future will be for agents to see more customer relationship management (CRM) tools, or links to those tools, incorporated into agency management systems.
G. Barry Klein, vice president-new business development, company products and e-commerce for University Park, Ill.-based Applied Systems, a provider of agency management systems, noted that the significance of a CRM system is that it allows everything known about a customer or about the customer as a set to be seen at a glance.
Choosing wisely
Of course, most people know what it’s like to hear about a great resource that can be used to build up a business, but once back at the office, that resource isn’t used or isn’t used consistently.
“Unless something is part of our normal workflow, it’s very difficult to find a home for it,” Witt noted.
“We’re getting past all the excitement about the web,” Klein concluded. “Raising $50 million to start an Internet-based insurance agency or…to start to an Internet-based sofa manufacturing company is really stupid anyway. Those are the guys that are going out of business. Everybody is settling down and all of the off-the-wall ideas are being shaken out. What’s being left are the usable things.”
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