Consumers have adopted social media at a remarkable pace. Since its launch in 2004, Facebook’s 825 million active users (425 million of whom are active on mobile devices) represent a 200 percent annual growth rate. Twitter was launched in 2006 and boasts growth of 800 percent per year.
Despite these numbers, the insurance industry has been cautious with social media, and the industry is only now starting to explore the potential of integrated social media campaigns.
Benefits for insurers through social media
Social media offers the opportunity for insurers to have a continuous, interactive relationship with customers. It’s a chance to listen to customers and engage in highly personalized dialogue. Social media enables insurers to:
- Enhance their brand by recognizing and empowering influential brand advocates; listening to and answering customer questions and complaints; and reacting to issues in a timely fashion to mitigate reputational damage.
- Reduce costs by letting consumers help each other, thereby lowering call center costs. It can also help insurers allocate resources within customer service to more critical issues; however, close supervision is necessary to make sure that customers get the right information.
- Influence customer behavior by amplifying word-of-mouth marketing from satisfied customers.
- Increase customer satisfaction by monitoring social media to quickly identify and address emerging issues.
- Increase sales through product ratings and reviews. User-generated feedback can also help identify potential new customers.
- Support innovation by gathering customer insights and real-time competitor intelligence, as well as identifying partnership opportunities for new initiatives.
- Introduce new insurance products, such as offerings that protect users’ public information and social media accounts.
New challenges and risks
The expansion of digital and direct channels offers insurers the opportunity to better engage their customers, but it also fragments the conversation and makes it difficult to establish a unified relationship. Further, the rapid adoption of social media encourages radical changes in customer behavior. To succeed in this fast-paced market, insurers must move beyond traditional marketing and customer service to adopt more continuous relationship-building with their customers.
Next week, I’ll share tips for how insurers can adopt a successful social media strategy.
To learn more, visit our social media in insurance coverage.