May 1, 2012 Leave a Comment
A LIMRA 2010 Life Insurance Ownership Study1 found that 35 million households have no life insurance of any kind. Just as it did 30+ years ago, this gap provides a huge opportunity for insurance direct marketing. We know this because another study2 in 2010 by the Life Insurance Direct Marketing Association and LIMRA, found that 20% of whole life policies are written via direct channels. How is it done, and is it done the same way as 30 years ago?
Like any direct marketing, an offer for life insurance has to meet a need, have a market large enough to sustain it, and be able to reach that market cost-effectively to establish the right value proposition with their target audience. In spite of rising costs, some resourceful insurance marketers have been able to do this…the ones that haven’t no longer exist.
Marketplaces change over time, but here are some conditions that have endured and helped life insurance direct marketers mine their markets profitably:
- Believe it or not, the NAIC Guidelines have been a stabilizing force that kept messaging and promotions consistent and focused on the core benefits and features of life insurance.
- Marketplace growth…according to the U.S. Census, the U.S. population grew 38.5% between 1980 and 2011, a staggering 86 million more citizens in 31 years.
- Groups (AARP, college alumni, credit union members, customers, etc.)… some groups come and go, but those that maintain membership size and a reason for being continue to provide the credibility that supports consumer trust and acceptance of insurance carriers.
- The celebrity spokesperson…remember Art Linkletter, Ed McMahan, Roger Staubach, and Sam Ervin? They all lent their awareness, popularity and credibility to one mass market demographic group or another, providing rich rewards for life insurance companies.
- The ability to craft an offer for either a one-step application or a two-step lead generator, based on which approach was more financially suited to the acquisition-to-conversion model.
But, the cost of doing business keeps going up for direct marketers, and life insurance is no exception. The increase in USPS postal rates, consuming an alarming percentage of the direct mail cost model, is just one example. What tools do marketers have to keep revenue and cost performance at a level that satisfies their bottom line and also keeps top insurance management happy? Here are just a few that are either new or have evolved over the last 30+ years:
- For the broad appeal DRTV marketers, what used to be only late night local broadcast media buy options has dramatically expanded into 24/7 segmented cable opportunities to reach out to viewers who have inferred profiles from well-defined and consistent program content.
- Third-Party Quoting Aggregators, DRTV Media Agencies, and Per Inquiry Bundlers have tightened DRTV efficiencies to capture more affordable leads for carriers.
- Marketers using lifecycle events are getting better at identifying, finding event data sources, and even creating lifecycle events for their target audiences…a reason to “consider” is always a better environment to have life insurance introduced.
- Better list segmentation, improved list hygiene, more flexible net name negotiations, solid database management, and innovative predictive modeling are leading-edge tools for effectively reaching your target audience.
- Direct mail graphic designers and production managers are taking advantage of innovative production equipment to develop more cost-efficient formats that do more for a direct mail package. How much message and offer can you pack into an 11 ½ x 17 inch sheet?
- Smart insurance marketers are looking on the product “shelf” for riders that can change the focus of a product, find a new market, or improve an existing one. And, consider that just by repositioning an existing product for a different need you can get a burial insurance offer to become a savings plan for a college fund!
- As people have become more comfortable with the internet, very astute insurance marketers have started combining internet advertising with traditional offline approaches to improve acquisition and conversion performance efficiencies. Remarketing has a significant demographic and geographic impact on SEO and display results…there’s no reason that life insurance can’t benefit from this, and the price is right.
Today’s life insurance direct marketers have a formidable combination of past experience and knowledge along with new technology and breakthrough marketing innovation. New cutting-edge marketing strategies, fresh well-crafted direct response creative, protection and strengthening of the brand, enhanced media channels that work harder, and more cost-efficient production all provide a power-packed new business bundle that can save thousands of test budget dollars on the way to that 35 million household life insurance marketplace…it really is “Back to the Future,” and it can be done even better today for a market that’s just waiting to be tapped.