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Marketing Matters Marketing commercial lines insurance successfully Tips on how to counter the commodity perception, increase brand awareness, and provide a customer benefit focus By Nanci Evarts At the annual meeting of the Insurance Marketing Communications Association (IMCA) in June, an interactive roundtable focused on how to successfully market to commercial insurance buyers—be they Fortune 1000 and 2000 risk managers, middle market CEOs and CFOs, small business owners, or groups and associations. IMCA (www.imcanet.com) is made up of marketing, communications, advertising, sales promotion, public relations and media relations specialists for the nation’s top insurance companies, brokers, wholesalers, reinsurers, and other related firms. Those on the panel represented a cross-section of insurance companies, brokers and third-party providers to brokers and insurers. They identified some of the critical “drivers” for the commercial insurance buyer as well as how insurance companies, brokers, and others can effectively respond. One element of discussion concerned the different drivers behind the commercial customer’s buying decision. There are both tangible and intangible factors to consider. Among the tangibles, of course, are the obvious: price, product, process value, and service. The intangibles involve the not-so-obvious pressures on today’s insurance buyer. For the risk manager, there are increasing pressures from the corporate suite—and even boards of directors—to better control enterprise risk and to better manage the entire insurance transaction including, but not solely, cost. Today’s risk manager must identify company-wide exposures and manage a complex “bench” of resources—or sources of information: brokers, underwriters, reinsurers, wholesalers, TPAs, etc. For the middle market or small company buyer, there are significant issues of what to buy in the first place, the affordability and level of coverage required, etc. Groups and associations have to concern themselves with finding coverage, programs and costs that fit the breadth of member needs. Addressing these drivers by easing their impact is the key to successfully working with commercial buyers. Trust, confidence = brand Whether we’re talking Fortune 500 giants or the mom and pop dry cleaner down the street, insurance buyers have important needs in common: trust and confidence that their insurance advisor and provider has the knowledge and increasingly specialized expertise to address their needs and come up with the best solutions at the right cost. Trust and confidence influences not only the initial sale but each renewal as well. Trust and confidence is certainly driven by one-on-one relationships with brokers and underwriters. However, it can be significantly advanced by effective communication and promotion of the brand that stands behind the products and services. A clever slogan is not enough. The brand must be carried out and “lived” by the people serving the customer. Ongoing marketing communications to those customers further establish, highlight and educate your customers about your credentials and value. These concepts apply to brokers, underwriters, TPAs or other service providers. There’s no doubt that price is a critical driver, especially during a soft market. But if prices are all equal, isn’t there an opportunity to sell based on the value-addeds that brokers and insurance providers bring? If you don’t think brand influences buyers, think Budweiser, or the Toyota Prius. Budweiser owns an incredible 50% market share of all beer sales, but they still feel the need to spend millions of dollars each year on a new Super Bowl ad. A recent article reported that Prius’ success was not due to achieving lower cost for gas, but because its buyers wanted other people to see them driving a hybrid! An emotional buy; not a price buy as one might first assume. Are we selling a commodity? In any industry, a salesperson’s worst nightmare is selling a “commodity.” When widgets are “equal,” price is king. A lively segment of the IMCA roundtable centered around this issue. Are we selling commodities? Do we as an industry create this problem or just react to it? How does one counter commodi-tization and strive to create value and differentiation? Roundtable participants ticked off any number of positive approaches to counter the commodity perception, such as focusing on: innovative pre- and post-sale service, responsiveness, flexibility, creativity, technology support, superior claims and loss control assistance. These could apply to either brokers or companies. Promoting expertise, and specialization are two additional ways that both brokers and providers can dig themselves out of the commodity rut. When threatened by a price-driven marketplace, there is only one answer. Do a better job of understanding the priorities of the buyer’s “tangible” concerns. Then tap into those intangible drivers: better satisfy customer needs and better establish your company brand awareness, trust and loyalty. More and more insurance companies and brokers are allotting the time, putting forth the effort and taking on the responsibility for financial investment in order to focus on their brand, a concept or all-encompassing position behind which the company stands in word and deed. Several major companies have “renewed” their brand position of late. Participants cited Travelers and Liberty Mutual as recent examples of both creative and strong branding. What’s more, companies like Travelers and Liberty have even turned to mainstream TV broadcast to deliver these brand messages. Even companies that don’t sell directly to the commercial buyer, such as E&S companies like Scottsdale and Markel, have invested in brand image campaigns. Pull-through branding One of the panel’s broker participants mentioned that very few of their insureds ever request a quote from a specific insurance company. Does it really mean that insureds think “any company will do,” or is it a case where company name and value just don’t stick in the mind of the commercial buyer? Either one has to be a somewhat troubling thought to insurance company providers. If no brand awareness or loyalty is established, why are we surprised when customers seem to buy solely on price or switch so easily from an incumbent? When asked who writes their insurance, why do so many insureds respond with the broker’s name, not the company? More and more insurance companies are trying to rectify this situation by creating a branding and marketing presence in the marketplace on their own, in addition to letting the broker carry their flag. Another participant in the workshop—a specialist in commercial auto—said a “pull-through” strategy has paid off well for his company. An aggressive strategy and ongoing presence and tactics have built a solid reputation and market share with truckers. Truckers do ask their brokers for a quote from this company. The company’s knowledge of the marketplace has led to creative development of value-added services that differentiate its product from others in the marketplace. Capturing attention and interest In a crowded marketplace, it takes a sustained effort, investment of people and dollars, and creativity to have an impact with the commercial buyer. Customer benefit focus. Marketing efforts need to be focused on “real world” benefits that customers will get out of the relationship—unique or more innovative solutions, protection for potential disaster or problems, resources that fit their particular business or industry. A broker participant said the most valuable material he gets from insurance companies is educational material he can put in front of his clients. What kind of material is valuable? Some participants suggested “information that helps the client look down the road to the future.” This educational focus was validated by others in the room who had found that—in addition to the traditional marketing tactics mentioned above—seminars had proved to be highly fruitful, both in supporting present customers and in prospecting for new accounts. A workers comp company had found sustainable ROI for its annual seminars across the state that focused on safety, loss control and claims management. By taking an educational approach rather than “trying to sell something,” the company has solidified its brand value with customers and this has resulted in better account retention. What a great tactic to employ in a line of business considered to be a commodity. There is another value to this process, if you can formalize such effort. Impressed and happy customers refer their business colleagues to such providers, thus greatly reducing your new business acquisition costs. Segmentation. Whether you are a broker, an insurance company or another kind of insurance services firm, market segmentation is a proven strategy in winning the business of commercial insureds. This involves prioritization of your customer base and identification of “like” drivers for different groups or types of customers. This typically involves data mining of your customer, prospect or policyholder base. Once you have laid this out, identify specific tactics and messages to “like” groups of prospects and existing customers. You’ll gain greater traction this way rather than by trying to make a “generic” message work for everyone. Too many times a generic message ends up being more about you than about the customer. Creativity—new directions. There is no doubt that the commercial customer is evolving in age, background and expertise. This fact demands that we begin to evaluate additional means and styles of communicating with our clients. Commercial insurance buyers certainly are “sold” their broker’s services and insurance company operations on an annual basis when the account is reviewed and shopped. Several workshop participants, however, brought up the importance of creating “brand ambassadors” throughout an organization post-sale. Creative carriers talked about the marketing training they provided to their claims and loss control depart-ments so that interaction would be perceived as a positive, “valued benefit” rather than a negative. Such efforts bolstered account retention. In a future “Marketing Matters” column we will discuss the partnership between insurance providers and the agents and brokers who distribute the product. * |
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