Marketing is becoming more important as customers gain more power, but are insurers missing an opportunity?
Marketing has always been important, but that importance is growing as the customer becomes more powerful. This shift in relative power is one of the dramatic changes put in motion by the Internet, which has placed information into the hands of consumers, combined with the processing power and communication channels to make good use of it.
As our Accenture 2013 Consumer-Driven Innovation Survey shows, insurance customers are no exception. They want consistent, relevant experiences across a range of channels and they want their insurers to do more than insure them—they want insurers to play an expanded role as risk managers.
In this mindset, broadcast marketing simply won’t cut it. The Consumer-Driven Innovation Survey shows that a large “switching economy” of up to $400 billion exists, comprised of customers who are likely to switch providers to get what they want.
The flipside—in theory—is that insurers have much more information to identify customers’ wants more precisely and the digital channels to reach them more directly.
However, despite the fact that they are spending ever larger amounts of money on marketing, it seems as though insurers are not really using these new technologies to their best advantage. Indeed, most seem to be still basing their marketing strategy on the “purchase funnel” approach (see diagram below, which contrasts the linear purchase funnel with the emerging “dynamic” model), and are busily engaged in an arms race to run more and more advertising that aims to build the brand “out there”.
Unsurprisingly, auto insurance is the single biggest vertical category in Google’s Adwords, with three insurance companies alone accounting for $110 million in keyword advertising in 2013.
Additional confirmation comes from CMOs: Time for digital transformation, based on the insurance-specific data from the Accenture 2013/4 CMO Insights Survey. The survey shows that while insurance CMOs are embracing digital channels with fervor—Gartner predicts they will spend more on digital technologies than the CIO by 2017—only 53 percent believe their marketing functions can meet the company’s performance expectations, and only 19 percent believe their company will be viewed as a digital business in five years’ time.
And, as the 2013 Digital Insurance Survey showed, only 40 percent of European, Latin American, and African insurers have a digital value strategy that spans the entire value chain.
So the real question is: how can insurance CMOs really get value from their marketing spend, and use digital technologies to deliver the right marketing message to the right person at the right time? Next time, let’s consider some new thinking from the Accenture Institute for High Performance that suggests manufacturing holds some lessons for insurance marketers.
For more information, download Just-in-time marketing: How insurers can cut costs while boosting effectiveness.