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Social Media Forum
Winning at social media
Moving ahead with new tools
By Tom Wetzel
It seems that every day one can read an article extolling the unlimited virtues of social media. These articles imply that all of one’s marketing problems can be solved with the use of social media. At the same time, when talking with some agents and company decision makers, one could get the impression that social media is so fraught with danger (angry policyholders, intellectual property and privacy concerns) that anyone with an ounce of sense ought to run for the exits.
There is an element of truth in both viewpoints but, as is often the case, the realities are far less extreme. To use a sports analogy, the best way—and indeed the only way—to use social media in a regulated industry is to play both offense and defense at the same time.
Offense—Social media presents an enormous opportunity to reach out to policyholders in subtle, incremental, and non-confrontational ways. The insurance industry constantly laments that it ranks low on the public trust scale and that there is nothing it can do to change the situation.
Social media, however, is a perfect vehicle with which to listen to policyholders, tell the insurance story, and to help create bonds that are less breakable during the entire market cycle. Agencies and companies can benefit equally in strengthening their respective brands while providing valuable information to prospects and policyholders in an easily digestible form.
Social media is also an effective and low-cost means to reach target markets, including both broad demographic groups and smaller communities of individuals with common interests, such as motorcyclists and truckers.
A May 2010 report by J.D. Power & Associates identified key trends among Generation Y auto insurance shoppers (those born around 1980 through early 1990s). These trends indicate that Gen Y shoppers tend to be less sensitive to price than Baby Boomers (68% compared to 83%); more than one-half (58%) of Gen Y shoppers have used insurers’ Web sites to gather information compared with 46% of Baby Boomer shoppers; and Gen Y shoppers are substantially more likely to gather quotes directly from an insurer’s Web site—48% compared with 28% percent of Baby Boomers.
In a 2010 survey, Mintel Comperemedia found that three markets—all adults under age 34, all men, and anyone earning $75,000—use social media more consistently and are more likely to use social media for insurance research and communication. The Mintel study also reported that, when shopping for insurance, 35% of 25- to 34-year-olds, and 30% of those earning more than $100,000 said they prefer the Internet to an agent. This compares with 23% of all respondents.
Any good salesperson understands the adage, “Go where your customers are.” If insurance consumers are turning to social media, agencies and insurers need to follow. Social media is more about listening and not about selling per se; however, stronger relationships with prospects and policyholders based on trust will help drive sales and customer retention.
Defense—Naysayers are quick to point out the legitimate liability challenges that social media participation presents. The problem is that pretending social media does not exist, and therefore cannot harm us, is profoundly wrong. On the other hand, if companies and agencies create sound defensive strategies, whatever liability exposures that do exist can be mitigated while taking advantage of the positive power of social media. In football vernacular, it can be the equivalent of the defense making an interception and running it in for a touchdown.
First is the issue of defending one’s brand. All agencies and insurers, whether they participate formally in social media or not, project an image and are exposed to risks that are the natural result of the independent participation in social media of their agents, employees, and policyholders. This participation impacts not only a company’s reputation but also can involve potential compliance issues associated with insurance, intellectual property, and privacy laws. If agencies and companies fail to understand and monitor the online conversations taking place, there is no opportunity to respond to consumer complaints, questions, and opinions. Control of an organization’s online reputation is, in effect, surrendered to the vagaries of the blogospshere.
Second, corporate participation can be a form of risk management when it incorporates monitoring of social media sites, timely responses, and reasonable and enforced rules for employees and best practices for producers. Together, these can reduce risks and potential violations in the areas of contracts, intellectual property, privacy, and market conduct and insurance trade practices.
If you can’t beat ‘em, join ‘em
The insurance industry is undergoing enormous generational change and can no longer afford to adapt by just using all the same tools and mindsets that it has in the past. It has always been slower to react to societal shifts than other industries (and there are often good reasons); however, today’s changes are happening far more swiftly and carry more severe consequences.
Social media is neither panacea nor pariah, but it is a powerful tool that can and must play an integral role in everyday insurance marketing, building trust with consumers, and recruiting the next generation of tech-savvy employees.
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 at “Social Media Management for Insurance Industry,” as well as at LinkedIn and Twitter.
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