Social Media Forum

Social media-it ain’t goin' away

Facebook, Twitter et al. provide useful connections to clients and customers

By Tom Wetzel

Social media. For many insurance companies and producers, the term conjures confusion and skepticism. For a smaller but growing group, social media spells opportunity—to strengthen their brands, generate leads and retain more of their customers. In what we hope will be an ongoing conversation in these pages, we will shine a light on social media, cut through the hype and discuss what participation in social media can and cannot accomplish for producers and the companies they represent.

For those who still believe that social media represents a fad that will disappear at some point or that it is only for the young, let me dispel those notions at once. Aside from a wealth of statistics that document the popularity and exponential growth of sites such as Facebook (350 million active users as of January 2010) and Twitter, and that one of the fastest-growing groups of social media users is over the age of 50, social media has staying power because users have control over much of the content and what they choose to access.

In an age in which consumers are bombarded every day with thousands of messages via the Internet, billboards, smartphones, radio and TV, this heightened ability to pick and choose is empowering. As a consequence, social media is transforming the way individuals of all ages and demographic groups gather and disseminate information. Businesses that fail to recognize the influence of social media and take steps to understand how to use it face the loss of market share and brand strength.

The question, then, for producers and insurers is: “What’s in it for me?”

First, social media is not just Facebook and Twitter but, in fact, hundreds of sites in multiple categories in which users find friends, create interest groups, publish their own text, photos and videos. Businesses of all types, including insurers and producers, are using these sites in various combinations to reach their customers and prospects.

Let’s acknowledge for the sake of argument that social media is a powerful communications tool. However, it is also a way of thinking that runs counter to how people in the insurance business typically communicate with policyholders and prospects. We think primarily on a purely transactional basis, so we talk to policyholders only when making a quote, processing a claim, requesting a premium payment, or when modifying, cancelling or non-renewing a policy.

Many of these transactions are not always positive experiences for policyholders and can become adversarial. Social media represents a unique opportunity to establish an ongoing dialogue with an agency’s policyholder community, inject a more human connection between producer and policyholder, and “sell” the value of insurance (and the agent) in more subtle, incremental ways.

Social media is also more about listening to policyholders and not preaching to them. In other words, social media is not just another tool to push out the agency’s message (or an insurer’s message for that matter). It is a mechanism by which a producer acknowledges that consumers are worth listening to and openly invites comments, questions, criticisms and praise.

Many agents and insurers recoil at the idea of creating a platform from which consumers can complain. However, those complainers are out there participating in the social media landscape whether or not the agency or the companies it represents are participating. One insurance marketer told me that he wants to hear from the complainers so that his company is in a better position to address any problem. I have talked to a number of agents and insurers who use social media. They report that negative online comments comprise only a small percentage of the total.

Another critical point to understand is that policyholders will influence each other more than the agency can influence them because today’s consumers are simply overloaded with “institutional pitches.” Consumers increasingly respond more quickly to recommendations from their peers rather than from business entities themselves. Agency owners can no longer think of their corporate Web site as an “electronic brochure.” It is now necessary to fashion an agency’s Web site as part of a chain of “shared connections,” of which social media participation is a critical part.

There are insurers and producers who have elected not to participate in social media, often in the mistaken notion that non-participation reduces or eliminates their liability. It does not. If an agency makes the decision not to participate on social media sites, it can be argued that it has, in effect, accepted whatever conversations take place about the agency. Producers who sit on the sidelines increasingly lose their ability to protect their reputations and shape how social media affects them.

The best way to defend an agency’s brand and mitigate liability exposure, therefore, is to monitor what is being said about the agency online, become actively involved in those conversa­tions, and develop a clear usage strategy and appropriate guidelines for their employees that are enforced.

Social media can play a critical role in communicating with policyholders and other stakeholders. However, participation also requires taking steps to maximize its effectiveness in a risk-averse manner. Ask yourself the following questions to determine where your agency is situated with respect to social media:

1. Do you monitor continually the activity on social media sites that mention your agency’s name and the products and issues you manage? If so, do you use a variety of online tools to assure a broad, comprehen­sive analysis?

2. Do you participate on social media sites based on specific written strategies and measurable objectives?

3. Do you coordinate your social media participation with the agency’s other communications activities?

4. Has the agency undertaken a review of its liability exposure based on its social media program? If the company has not yet elected to participate in social media or has decided not to participate, has it evaluated the greater risks of non-participation? Has the company developed procedures on how liability issues will be addressed?

5. Does the agency have guidelines in place governing the use of social media sites by employees? Were these guidelines developed specifically to cover social media activity?

6. Has the company developed a mechanism with which to evaluate the value of its participation on social media sites?

7. Does the agency coordinate in any way its social media participation with those of its companies?

Social media is not for the hard sell but, rather, for finding hundreds, even thousands, of new prospects, cultivating new and strengthening existing relationships, and building an online brand that can stand head and shoulders above your competitors.

We hope this column will stimulate an ongoing conversation about how social media participation can benefit Rough Notes readers. If you have comments or questions, please e-mail me and I will respond in subsequent columns.

The author
Tom Wetzel is president of a full-service, insurance-exclusive marketing communications/public affairs firm with a special practice devoted to social media in the insurance industry. He can be reached at twetzel@wetzelandassociates.com. The company’s Web site is www.wetzelandassociates.com. He is also on Facebook and Twitter.