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McKinsey advice to insurance companies? Use digital marketing to convert users into customers

Profiling, customisation and testing: those who have understood how to take advantage of the online world are already beating their competitors. Digital marketing can even help insurance companies to increase the conversion rate of online customers six-fold. Immediately.

09 Sep 2017

The digital marketing for insurance companies is not easy to get to grips with and statistics seem not to help. The figures reveal that most of those visiting insurance websites are between 55 and 64 year olds who simply surf to get information but, to get a quote and possibly complete a transaction, they always prefer to meet an agent. In summary, online conversions, i.e. conversions occurring exclusively via digital channel from the initial visit to the completion of a policy, are very low.
“When insurers have to explain their difficulties in digital marketing and, in particular, in converting online visits into actual policy sales, mainly point out the age and income of their customer base as the main hurdles – says Mila Adamova, senior consultant at McKinsey. – The problem is linked to a demographic issue: according to them, the majority of website “surfers” is long in the tooth and typically do not want to buy insurance online. Yet the success of digital marketing, achieved by those few more experienced insurance companies, suggests that demography cannot be the sole factor. For example, we have recently conducted an analysis for one of the leading U.S. companies operating in the Property & Casualty sector, entitled Digital Opportunity Scan. Data revealed that an online-only company was able to convert its potential customers six times faster than a much more well-known competitor”.

In short, even after adjusting the demographic differences between the several user bases of other competitors, this carrier managed to beat the online conversion rate of any other insurer under review, succeeding in developing impressive margins. As the expert points out, the higher online conversion rate, in fact, always results in actual profit.
“We found that a car insurer with $10 billion in annual premiums can generate $400 million in additional premiums, increasing the online conversion rate by 20%. – said again Adamova. – It’s a value that gives insurers a powerful inducement to bridge the digital capacity gap between them and the best performers. How can insurance companies make a difference online? Easy to say: starting with basics”.

Content customization is worthwhile
Making the most of even the simplest digital marketing techniques allows insurance companies to increase their business value. First of all, customize the web content, targeting those customers who are more likely to buy online so as to offer them a better digital experience.
“Customization is worthwhile – said Adamova -. Even though most visits come from the 55/64 target group, young people between 18 and 24 are most likely to be online converted. For this reason, customizing the website content for this younger target group strikes a balance. Insurers may link data collected from visitor click flows and cookies with data from third parties regarding demographics, attitudes and user profiles. This information enables insurers to adapt the content of their website in a flexible way so as to better tailor the offer to a more targeted audience. How? Using a tailored and structured masting (i.e. organization of the website content), using automatic learning tools helping not only to optimize the overall graphics of the website in terms of images and texts, but also calibrating (in relation to the customer) the offering”.

Using profiling tools and making tests
Through the use of specific digital marketing techniques, insurance carriers can thereby capture the customers most likely to purchase. Information available to companies on consumer profiling is increasingly detailed and precise. According to many surveys, for instance, many online purchasers are women, increasingly at the forefront of financial decision-making.
“We found that women are twice as likely to visit an insurance website – said Adamova – and, to a marginal extent, more likely to start or complete the online purchase process compared to men. Furthermore, millennials and families with children are more likely to start or finish an online price quotation compared to families without children. Insurers can use the most innovative tailoring technologies to attract this segment”.
Assessing whether or not insurers are successfully targeting the appropriate digital customers, a range of automatic audits can be performed on all digital initiatives undertaken: advertising, landing pages, dems, newsletters or other types of content, using random test groups. A number of automatic platforms on the market are able to measure the results of this type of test with the utmost precision.

Ongoing improvement of the customer experience
Top performing online marketers use digital tools to learn what potential customers want from a website, what they don’t like, what discourages them from completing their conversion and what persuades them to complete a quotation.
“This type of information is used to improve the website regularly – ends McKinsey consultant -. The aim? Simplify the customers online process, removing any critical elements to simplify user experience to the utmost. For example, at least one online-only insurer uses the customer data collected to partially fill out application forms and minimize the need for manual entry by the purchaser. It may seem like a small detail, but even such small details can make a difference when it comes to the purchase decision. Our Digital Opportunity Scan reveals that some insurers are getting smart decisions, leveraging digital marketing strategies better than their colleagues, and gaining greater market share”.

(original source of the article)

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