Social Media Forum

A tipping point in 2012

Social media is "in"

By Tom Wetzel

The year 2011 has been a time of steady growth in the area of social media experimentation. What's more, 2012 promises to be a breakout year. There are still insurers and producers on the sidelines, but their numbers are dwindling. Of more concern are those that are still dabbling around the edges, taking half-measures such as putting up a Facebook page and making the assumption that that's all there is. The digital landscape is changing so rapidly that those who do not embrace the technology may be swept away by it.

First, a majority of American adults are now using social networks, according to a report issued this past August by the Pew Research Center's Internet & American Life Project. The report says that of the adults who use the Internet, nearly two-thirds use social networks such as Facebook or Twitter. Baby Boomer use of social media is up 20% from a year ago, and now stands at 32%. Producers can ill afford to ignore or misuse a medium that will only continue to expand—and quickly.

Second, social media is also not just about communication—it's also about the data generated and what can be learned from it. How do consumers think about issues related to insurance products and how do they make their buying decisions? Understanding this data is more than just an occasional, or even daily, exercise to see who's posting. It is a continual process of following the conversations about your agency, your competitors and about insurance issues in general—taking stock of what's being said, how it's being said and who's saying it.

Aside from the explosion of mobile marketing, which we covered in the last column, there are four developments to watch for the coming year.

Social media as an enterprise function

Up to now, social media has been largely the domain of marketers. Agents and insurers seek as many followers or "likes" as possible in the hopes that many of them will tell their friends to become followers and some of them will become policyholders. And although marketing should remain the tip of the spear, so to speak, social media's power can be maximized only by establishing it as an enterprise function in which every department or office function plays a role. In an agency, human resources, personal and commercial lines personnel should all participate, e.g., writing an occasional blog, suggesting topics for posts, weighing in on how to respond to a comment or question, or coming up with an idea for a promotion. On the company side, claims, underwriting, HR and customer service personnel should make similar contributions. And, of course, legal counsel and compliance officers should set guidelines and review material. The point is, a social media program should never be a silo, cut off from the firm as a whole.

Creating your own demand

I have heard agents and company executives argue against social media participation because "our policyholders do not use social media and are not asking us to do so." That is dangerous thinking for two reasons. One, under-40 insurance consumers, for both personal and commercial lines, will not demand sound social media engagement from any carrier or agent, they will just increasingly move to those that do. At the same time, a growing percentage of older, tech-savvy buyers will likewise be attracted to agents and carriers that can demonstrate how social media delivers more value: 24/7 access, convenience, and greater information accessibility. These firms are, in effect, creating their own demand.

Seth Godin, the noted author and blogger, outlined a way to figure out if it pays to adopt a new technology, which applies perfectly to social media.

"When you talk about your market or your peers, do you say, 'no one is using it….' or 'no one is using it yet'?

"Yet implies inevitability. If they're going to use it, it might make sense to get there before they do."

Expansion in commercial lines

Most of the talk and activity about social media has been about personal lines. There are those who still believe that social media has no, or, at the very least, a limited role in commercial lines. That myth, however, is already being challenged and should be completely debunked next year. One good example is Zurich's Real Talk (www.zurichrealtalk.com) which focuses on real estate and construction issues and features employee blogs, tips, and Q&A opportunities for policyholders. Agents can take a cue from this program and develop online dialogue in those commercial lines or markets in which they specialize.

Regulators are watching

As many as half of state insurance departments may be monitoring social media activity in the industry, and that oversight will increase next year. Regulators are monitoring insurers more than agents, but what they are looking for can help agents steer clear of problems as well. First, regulators want to see evidence that an insurer has developed a formal social media policy and a training program to make sure the program will be compliant. The issues that raise the most concern include misleading advertising, the use of testimonials and endorsements (is an endorser being compensated?), consumer privacy, records retention (are posts retrievable?), and agent monitoring (are companies paying attention to what agents are posting?). Finally, regulators want to make sure that what is discussed on social media sites is accurate and mirrors the other information they collect from insurers.

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. Wetzel is also on Facebook and Twitter.