Insurance Agent Web Power

What Kind of Internet Marketing Should Your Insurance Agency Be Doing Right Now?

I’m going to vastly oversimplify the exercise of choosing internet marketing components by making these assumptions:

• You know your insurance agency’s target customers, your key products, and your geographic marketing area;
• You have decided upon which traditional marketing programs you will use -direct mail, print advertising and the like;
• You have a budget for marketing and you know how much of that budget is available to you;
• You also know which programs will be implemented in-house and which ones will be outsourced.

So it’s August already…and your insurance agency is coming up a little short on some sales commitments that could cost you some contingency income and maybe some other preferential treatment from one or more of your insurance companies.  Your problem is short term in nature and you need a short term fix.

For most agencies, the main internet marketing options are these:

• Email marketing (in the short term, this would be confined to your current list)
• Local Search Optimization
• Organic Search Optimization
• Social Media Marketing
• Pay-Per-Click (or PPC)

On a relative basis, the costs for reach line up something like this:

Since we assumed you know your insurance agency’s available marketing budget, you may be able to rule out an option or two at the outset.  But budget aside, each program has different lag-time to sales and each program has a different sales production curve as you move to and through program maturation.   The next illustration shows the different lag times as you move through implementation phases:

This should make your choices fairly easy.  In the short term, Local Search Optimization and Email Marketing are probably your best bet.*  If you don’t have a good email list, one that has been updated, then your option may winnow down to just Local search optimization.  But September is right around the corner and your insurance companies, if they haven’t already done so, are going to start talking to you about marketing plans and commitments for next year.  So it’s a good idea to also consider the longer term sales potential of some of these programs.  Relative to each other, that potential over time looks like this:

When you have the luxury of time, return on investment (ROI) should enter into your decision criteria.  The chart below shows ROI ranges for both social media marketing and SEO.  There is some risk associated with each tactic for multiple reasons (I may blog about that later, if someone asks me to).  But the range of risk is something like good-to-great as opposed to horrible-to-good.  Risks associated with SEO and social media marketing are something most of us can accept and still sleep at night.  PPC would appear to be another matter.   PPC can produce acceptable ROI, but because insurance keywords are so expensive, pay-per-click ROI is unacceptably low for many insurance products.

*although as your short term gets shorter your only option may be to purchase leads

I recently attended a series of insurance company events during which one of the vendor presenters repeated this statistic:   85% of insurance consumers start their research with the search engines.  That sounds plausible; the problem is, it’s not true.  A 2010 study by AIS Media found that only 32% of consumers begin their insurance quest with the search engines (not that that’s insignificant, it’s just not 85% – by any method or rounding up).  The number one place where consumers start their purchase research?  By asking family, friends and other acquaintances where they have their insurance.  As noted in Confluency’s June newsletter, this behavior is the reason referrals are the number one source of new business for most agencies at 69%.  But there’s even more.

An article posted by eMarketer today cites data from surveys performed by Knowledge Networks and MediaPost Communications who find that 37% of social media users trust what friends and family say in social media about a product or service.  That percentage is strikingly similar to the AIS Media survey results:  the percentage of consumers who begin their insurance research by checking with friends and family is 37.5%.  And there’s more.

Mobile search is on the rise, but is still less than 10% of all search (that’s projected to change rapidly in the coming two or three years); however, 40% of social media users access social media via mobile devices on a regular basis.  Think about the typical scenario…I’m out shopping, maybe for a car, and the topic of insurance comes up.  Or I’m about to close on that home or refinance and the realtor or mortgage broker brings up insurance.  Or I’m at work, grousing about that that insurance premium rate increase I got in the mail yesterday.  Who am I going to turn to?  If I’m like 37% of the population (or 37.5%) I’m going to check with my friends and family – my social network – and there’s a pretty good chance I’m going to do it on my smart phone by accessing social media.

So the question most insurance agents should be asking is this:  Will my customers’ friends and family see my agency when they engage with my customers through social media? For those agents who have established profiles on Facebook and other social media, and have been engaging their customers there, the answer is probably yes.  For the agents who have not, the answer is less clear.  But I’m willing to bet that the level of referral business will drop for agents who do not engage  in social media.

A lot of insurance agents are reticent about establishing social media profiles, let alone engaging in social media marketing.  But as the slide show below illustrates, you can suffer a social media disaster – even though you aren’t actively participating in social media.  There is some language used in the slide show that I might not normally use here, so if you are squeamish about that sort of thing, skip viewing.  But I hope you will take a look and take some of the lessons to heart.  In particular, look at the insurance promotion hoax starting on slide 29 – an update on George Orwell’s War of the Worlds…

Here’s what Wikipedia has to say about ecommerce, ‘… (it) consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks’.  They say a little more of course, and concede there is often a physical deliver component, but for the most part, the classic definition of ecommerce involves little more than circuits and networks.

The Seduction of Insurance Ecommerce

And the idea of ecom is alluring, how can it not be?  You set up a website, humans find it and enter information, get coverage and pricing information, and then enter payment information.  On the other end,  money comes out, straight into the pocket of the insurance provider.  And there’s flaw number one with insurance as ecommerce from an insurance agent’s perspective:  There is no role for the insurance agent in the foregoing scenario.  If insurance consultation and purchase could be conducted this way, why would anyone need an agent.  This view of insurance and ecommerce was pretty much the thinking in 1995 and it hasn’t come to pass yet.

Life Insurance and Auto Insurance for Basic Needs Consumers

That isn’t to say that some insurance sales have gone mostly online, term life and personal auto are two examples.  But even there, many consumers would be better served by involving a trusted adviser.  I sometimes ask agents how often coverage options on an original car insurance quote submission end up the issued policy limits.  The answer is almost never.  That’s because, even for basic auto insurance, consumers don’t understand how to determine coverage needs or the interplay between deductibles and other credits.  And while term life quote requests are easy to complete, not every company offers advantageous rates to consumers with health concerns or  a little long in the tooth.  A little experienced guidance would come in handy for many term life prospects.

A Shot in the Foot?

Advertising by term life insurance companies, and particularly advertising by the likes of direct marketing giant GEICO, lead people to believe they don’t need an agent.  And that mentality extends beyond just those two products.  Insurance agents have lots of opportunities now to participate in ecommerce through auto and home rating portals for comparative rateers, like EZLynx and Silver Plume, and company provided website widgets that allow website visitors to quote and buy online.  But if we just throw these on our websites indiscriminately aren’t we just reinforcing the message being pounded out by GEICO?  Are we shooting ourselves in the foot?

Internet Communication with a Sprinkle of Ecommerce

Most agents are local businesses and are no where close to fitting a traditional ecommerce model.  Most insurance agents can deliver benefits that can’t be matched by ecommerce alternatives but they need to make the case for agency value proposition and that’s where internet communication comes in.  Using email, the agency website, and social media agents have multiple low cost channels through which they can reach out to customers and prospects and communicate differentiate value propositions; but we need to actively communicate and those communications need to include a clear and advantageous alternative to quoting and buying online.

There is evidence that consumers want, and maybe even expect, to be able to get comparison pricing online.  So let them do it, but also let them know that going lone wolf may not yield the best combination of price, protection, claim paying ability and service, and convenience.  And let them know you have a good alternative – your insurance agency.

Putting the Role of Your Agency Information, Website, Blog, and Local Search in Perspective

A picture is worth a thousand words, as the old saying goes.  In my case, a picture is worth about 10 webinars, 2 guides, 8 blog posts, 3 newsletter articles and more emails and conversations than I could possibly recount.  For years, I have tried to impress the importance of consistency in your basic agency information across the vast internet – and it is possible, in fact very manageable, to control the appearance of your insurance agency name, address and phone number in web directories and local search engines.  Through numerous blog posts, guides and  webinars I have tried to put the relationship and synergy between local and organic search results, your insurance agency website and blog, and now social media, into a comprehensible context.

And now, courtesy of Mike Blumental’s blog on Google Maps and local search, comes this infographic.  Kaboom!  All the many years of trying to communicate how all these work is captured in one tidy graphic.  It does a nice job laying out how the various manifestations of your insurance agency’s web presence fit together and it does a nice job integrating the concepts of search and social.

You can skip on over to full post on Blumental’s blog for a full explanation of the diagram, and I recommend it, but here are a few essential points captured so cleverly in this one image:

• The rings closest to the center of the ‘web equity wheel’ are most within your control – so control them
• Make sure your business name, phone number and website domain name don’t change  – that’s at the very center
• In the second ring, keep track of user names and passwords that access your directory listings and accounts where your business information appears.  I cannot tell you how many insurance agents had a (former) employee set up their Google Places account, later to find they cannot access their information to correct or update it.
• Insurance agency owners and managers should have complete control of your website and blog, so no excuses for not getting your basic business information right here, and no excuse for not promoting the kind of information about your products and services, the way you want.
• N.A.P., as it appears in the third and fourth rings out, refers to your agency name address and phone number, which also appears in the very center of the diagram.  This information shows up again to highlight the importance of controlling this information at the headwaters – those data providers that populate (hundreds and hundreds of) directories and local search listings downstream.  Again I say, to those insurance agents who represent Progressive, take advantage of their List Agent program and will make quality controlling your N.A.P. information a *lot* easier

I’m going to stop there since there is already a thorough explanation of the diagram at Mike Blumenthal’s blog.  But you get the picture (heh, heh, no pun intended).  A few questions I’d like to leave you with:  1.  What kind of progress have you made building your agency’s web equity?  Are you stuck in the middle?  2.  If you are working on your social media presence in rings four and five (Facebook, Twitter, LinkedIn, etc.), have you skipped over some of the details in the inner rings?

There are more than a few Facebook time lines that can be found on the web…some, highlight all the often controversial changes to Facebook’s privacy policy, others highlight the meteoric growth in popularity of the social media phenom, and several include changes to Facebook features.

More recently, in February, Facebook made major changes to page layouts including doing away with tabs, announced the wind down of FBML,  but added the ability for business pages to feature ‘likes’ and included a new ‘photostrip’ at the top of Facebook pages.

In the second half of 2010, Facebook added a Places feature, with the ability for Facebook users to check-in to a location with a mobile phone but did away with Facebook Connect.  In all, Facebook has averaged 5 – 10 significant changes per year, all of which require some thought on the part of page administrators and many of which change the way in which insurance agencies use Facebook.

click to see complete infographic

To some, the constant change and Facebook flip-flops are disconcerting.  But not to those who developed a social media marketing strategy before jumping into Facebook…or any other social media channel.  If you haven’t already created a social media strategy for your insurance agency, here are some considerations to help you along that path and minimize the angst of the constant Facebook changes:

1.  Who do you want to reach through social media?

• customers
• potential business customers
• potential personal insurance customers
• age groups, sex, other demographic criteria

2.  What social media do your targets use?

3.  How will your use of social media integrate with your insurance agency website and other marketing and communication initiatives?

4.  Who will be responsible for updating your social media channels and how much time and expertise do they have?

5.  What objectives will you set for social media marketing success and how will you measure those objectives?

I don’t like to use this blog space as a commercial for Confluency Solutions, but I couldn’t help it this time.  In a  recent video blog post Google’s Matt Cutts answers the question:  what are the three things you would do to optimize SEO for 2011.

Number 1: Optimize for speed; it is a page rank factor, but more importantly, all evidence shows that, when web pages load quickly, site visitors do more on your site, resulting in better ROI.  Confluency has done a lot of work over the last 12 months, making our sites faster and faster.  Right now, nearly all of the websites Confluency has engineered rank in the top 1% of the fastest websites in the world.

Number 2: Make sure everyone in your organization understands good content management practices and make sure you are using good internal linking strategies within your website. Confluency recently added an automatic linking feature within our website CMS to further improve internal linking and we just kicked off a new process to make it more simple than ever for agents to understand and engage in sound content management practices, all at the cost of 20 minutes a week.

Number 3: Engage in social media marketing.  Social media activity can result in direct traffic to your insurance agency website and will also mean occasional back links to your website, which is good for SEO.  Confluency has long provided guidance to the agents we work with on using social media as a business branding and marketing tool and we are now rolling out a service to provide social media marketing directly for those agencies who want those marketing initiatives handled for them.

Three for three.  Not bad for a day’s work

Are you thinking about hiring a full time blogger and social media marketer?  According to Socialcast, the median salary for a Social Media Manager is $45,501.  Toss another 20% on top of that for benefits and other head count related costs and the cost of a full time social media manager could be over $54,000 a year.  For most insurance agencies, that means another 200 policies a year have to be written each year just to recover these new costs.  That’s real money and real production.

Facebook and other social media, as I’ve said here before, aren’t sales mediums – they are branding channels.  But an an ongoing expense like a Social Media Manager requires some justification – especially if new personnel costs are layered on top of additional new costs.  Before you foray out beyond dabbling in social media commitment, a strategy and cost justification and ROI method should be put in place.

Source:  Social Cast

Take a look at the chart above and notice that 77% of Social Media Managers have four years or less experience (and probably no experience as an insurance agent).  That means that you may not be able to rely on your new hire to come up with a compelling case for social media return on investment.  Social media campaigning for restaurants, entertainment-based business, and consumer products is not the same thing as social media marketing for insurance.  The principles are the same, but the positive emotional attachment to insurance products and services are different, requiring a different approach and justification for insurance agents who are ready to dip more than a toe in the social media waters.

None of this is to say that insurance agents should eschew social media, only that a well thought through strategy and a way to tie social media success measures (number of fans, e.g.) to increased net revenue needs to be the first step.

Insurance agents, and businesses in general, sometimes have a hard time getting their heads around ROI (return on investment).  Confluency Solutions measures what I would call direct website ROI:  calls, and online requests for insurance quotes; conversions to policies and average commission.  And the ROI numbers are good.  Annual reviews identify areas where insurance agency website ROI can be increased.  These generally fall into three categories:

1.  More website traffic;

2. Higher levels of traffic conversions (% asking for quotes and better quality prospects);

3. Support for other agency marketing and customer development initiatives. The reason many of us have a hard time getting our heads around ROI is that most of these measures (like website traffic, e.g.) don’t have a place in ROI calculations.

Social media, like Facebook and Twitter, are even murkier.  Where do increased numbers of Facebook fans or Twitter followers enter the P and L statement?  The short answer is that they don’t.  However, social media and website activity does contribute to ROI – the measures mentioned in the preceding sentences would fall into the category of ‘transactional precursors’ or what we sometimes call leading edge indicators.  Put another way, if your website visits increase, at some point you should expect a net increase in quote requests, insurance policies written and new sales commission.  Ditto for Facebook fans and so on.

If you are interested in quantifying your insurance agency website and social media activities in a hard-nosed, bottom line way, then take a look at the excellent slide set on the topic from Oliver Blanchard.  Not only does it contain good information, but it’s pretty darn entertaining as well:

GEICO is the Insurance Watson

It isn’t news to most of us that IBM’s super computer, Watson, recently matched wits (or more accurately, databases) on Jeopardy with two of the worthiest opponents the human race could offer.  The results of that game are neatly summarized in a recent Mashable post:

IBM supercomputer Watson has defeated two of Jeopardy‘s greatest players, and it wasn’t even close.

But some weaknesses in Watson’s otherwise impressive capabilities were revealed.  So you can look at the Jeopardy spectacle in two different ways:  1) Singularity is right around the corner so suck up to the machines to make sure you get a good slice of the pie in our cyborg dominated future; or 2) We need to change the rules of the game so the humans win, not the machines.

An article in CNN Tech provides some further insights into those weaknesses:

At the end of the day, Watson is not really conceptualizing a clue’s meaning. It simply number-crunches its way to the right answers by comparing vast amounts of data. This is why it dominates the “fill in the blank” knowledge clues (Aeolic, spoken in ancient times, was a dialect of this), but falters on some more “common sense” deductions.

So, to all you humans who like to be humiliated by wires and circuits:  go ahead and play jeopardy with computers (and the future *is* written).  Or perhaps you would rather compete with computers in a game where the questions were framed by common sense clues instead of straight-on facts and data?  I would.  I like winning.

So what does all this have to do with a blog about insurance marketing?  It has to do with an observation I make from time-to-time, that is, I see insurance agents trying to match the value propositions of insurance marketing equivalents of Watson – GEICO and Esurance.  While it may be true that your agency can also save new customers 15% or more, and you do it just as frequently as GEICO, competing on that value proposition is a losing proposition.  GEICO is really good at it, and while they promote the 15% or more savings, they simultaneously devalue relationships (what are those anyway?), one-stop convenience and other value propositions that most local insurance agents could be cultivating.  GEICO is Watson.  Don’t compete with them in a game dictated by rules that work to Watson’s advantage.  Come up with your own rules, and beat the borg.