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© 2009-2013 The Customer Respect Group
As I traveled during this autumn conference season, listening and speaking on social media in the insurance industry, I often heard the comment “We block social media.” But is this a
Is blocking social media to an insurers advantage?
good idea?
“Staff will spend all day on Facebook” was one reason given – but if this is true, it is more likely that these staff members are just poor or unmotivated employees; this is a management, not a social media problem. Besides, they probably have Facebook on the smartphone in their pocket, so blocking has no real effect. If a staff member prefers to spend all day on Facebook instead of doing his or her job, you have the wrong employee.
“Social media will chew up internal bandwidth.” It can, yes, especially if staff members watch YouTube all day – but do motivated staffs do that? Could they not alternatively watch Hulu or Netflix all day?
“Staff will post unauthorized information.” Again, with the smartphone in the pocket and a laptop at home, people will post on social media regardless.
This is not a new experience; we worried about staff with direct-dial telephones calling friends all day. We were convinced that access to copy machines would encourage unbridled copying just because staff could make copies – and I do admit the concern about photocopying butts was a real one. Email was a disaster waiting to happen; staff would send confidential information and files to competitors without limitation, and as for the high-speed work Internet – that spelled the end of workday productivity as we knew it. Sure, Cyber Monday always causes a bit of a slowdown, but we survive.
Blocking social media is papering over cracks and in fact misses a much bigger point. You need employees to be familiar with social media and the dumb things that people can do. Almost all corporate social media blunders are the result of human error; staff tweeting from corporate accounts instead of personal ones by mistake, making inappropriate comments or posting regrettable photos while proudly announcing their place of employment, berating customers online, or making explicit policy recommendations and guarantees.
Social media can reach all parts of an insurance company, and everyone needs to gain an appreciation of and respect for its potential destructive power. Refused claims always have the potential of “going viral,” sponsorship deals can backfire, poor customer service can be damaging.
Most of your employees have access to social media even if you block it, and the risk-averse thing to do – and insurance companies like to think of themselves as risk averse – is to teach people how to use social media effectively, focusing on what they should do and not so much on what they should not do.
This is not only the smart thing to do, but it also makes business sense – employees on social media can have a positive effect for insurers. Who is most likely to “like” the company’s Facebook page or to follow tweets? It is less likely to be prospects or customers than it is the people connected to the company; examine the Facebook “shares” for any insurer – for most, you’ll find 90 percent are by agents and employees.
Social media allows employees to be proud of and even promote their workplace. While insurers are spending thousands recruiting fans and followers that will rarely see any of your messages (according to Facebook, fewer than 16 percent of fans see messages), you are ignoring the people who make a point of tuning in. The real power of social media is as an influence engine, with the average person connected to 236 friends, neighbors, and family members. If you could encourage 5,000 employees to share your news, this would have a potential reach of over 1 million people, with all this coming from someone they know and trust.
So block social media if you wish, but you cannot say “We are a conservative insurance company and we therefore block social media.” Managing risk by opening up access, training employees, and making them more aware while expanding the reach of your message – that is the real conservative approach.
With most of the life insurance industry struggling to provide sufficient online self-research tools and content without diminishing the influence exerted on
Life Insurance – Pick it up on your way out
decisions by an agent, MetLife is tossing another monkey wrench into the works. Recently, the company announced “Life Insurance in a Box,” and it literally is a box, placed on the shelves of 200 Walmart stores in North Carolina and Georgia.
Is the consumer ready to load up their carts with life insurance alongside their groceries and Taylor Swift T-shirts? I doubt whether life insurance will become a Walmart best seller anytime soon, but it is a bold step aimed to further demystify the product and expand market penetration. Life insurance ownership is at record low levels, yet many consumers remain hesitant to invite an agent into their homes with the industry is struggling with an image and trust issue. According to Woody Allen, “There are worse things in life than death. Have you ever spent an evening with an insurance salesman?” MetLife is therefore looking to change the perception of the industry and enjoying its role as an innovator, first offering online quote engines, then a completely automated online purchase, and now a box of insurance.
Online or in-store purchase options will never totally replace face-to-face or even phone-to-phone dialogue, nor are they intended to do so. This is not about creating channel conflict but providing a multichannel experience, and there is a huge difference. Consumers now expect multichannel options for research, purchase and customer service across all products and this applies just as much to insurance.
“Life Insurance in a Box” is a different type of insurance product: It is a one-year term, fixed-price product — very simple to understand and even easier to buy. The box is colorful and looks “fun,” featuring the popular “Peanuts” characters. You can view a video promotion by clicking on the link below.
Traditionally, the insurance industry has seen it as its professional responsibility to tell the consumer what to buy and how much of it to buy. But in the words of popular culture, “How’s that working out for you?” Does this initiative attempt to commoditize life insurance, or does it expand the market to those uninsured who have either a limited need or budget?
In considering whether this is a trend or a one-off, we can look outside the US market for guidance. In the UK, a major channel for a full range of insurance products (including life) is Tesco. Tesco is the third largest supermarket chain in the world, with 15 million loyalty “club card” holders. Tesco’s decision to sell insurance caused a reaction in both the retail and insurance industries: two of Tesco’s retail competitors, Sainsbury’s and ASDA followed the company into the insurance market.”
ASDA’s decision is perhaps most interesting as it is a wholly owned subsidiary of Walmart, which might well have provided the appetite to explore the same in the US.
Is the life insurance industry ready to add retail channels and are we likely to see Target, Amazon.com, or Sears enter the insurance industry? Please add your comment.
According to Bob Thacker, Gravitytank strategic advisor and former CMO of OfficeMax, “Engagement with the customer today isn’t just pouring a message down on their head and hoping
Social media is a conversation and requires willing participants (usually)
they get wet. It really is understanding that you must be present in a conversation when they want to have it, not when you want to.”
This might indeed be true, but it does present insurers with a dilemma: Who should have this conversation? Most insurers have a well-developed channel to the customer, in the form of the local agent. But social media is throwing a monkey wrench spanner into the mix by opening up a direct line. This is a classic clash between sales and marketing. Should insurers reach out to customers and prospects and engage them in conversation on a corporate Facebook page (marketing votes YES)? Or should they use social media to bolster the consumer-agent relationship (sales votes YES)?
So far, insurers have mostly chosen to concentrate on their own social media presence, which is not surprising, really, given that social media has mostly fallen into the purview of marketing departments. But aside from the most well-known carriers, this has resulted in some very mixed results. Just ten insurers have collected more than 80 percent of all the industry Facebook page likes – and we can all name most of those: they spend the most on TV ads. The “if you build it, they will come” strategy does not work – just asking yourself, “We are an insurance company – who would like us?”
That does not mean you can file social media away in the “nice try” box. The lack of success is partly due to the limitations of the strategy – building a Facebook page, employing an intern or ”young person” to manage it, and sitting back and waiting for the flood of business. Now we hear that there is no ROI, and social media has not lived up to its billing. As the “young person” might say, “DUH!”
The next phase of social media use is much harder, because it involves some thinking. One new problem is that consumers are more circumspect about connecting to brands in social media. “Brands behaving badly” have sullied the relationship by overwhelming consumers with advertising posts. This will become even more of an issue as consumers migrate to mobile devices with smaller space for ads and to social platform vendors under greater pressure to drive revenue.
Insurers now need a three-pronged approach:
1. Maintain a corporate presence
Yes, you need a corporate presence, and on multiple platforms, if for no other reason than to allow customers to find you and complain (and they will) or even pass on a compliment (it can happen). Recommend that employees and agents follow you, contribute, and post on a regular basis. But do not expect thousands of fans to show up, unless you spend on marketing ads and promotions to recruit new ‘fans’. And even if you do spend, engagement will likely be relatively low, especially if you recruit the wrong audience – as has happened to a lot of insurers.
2. Consider who wants to speak to you
As it says in the quote at the top of this story, social media is a conversation, so the topic must be interesting enough to engage an audience. And before you ask, insurance, as a general rule, is not an interesting topic. Choose a topic that will be of interest to some (but not all and probably not even most) of your customers and prospects, but that will attract an audience that you also have an interest in reaching. Show your knowledge of and commitment to that topic, and engage. Social media is accelerating the trend toward micro-marketing, and that could make for a lot more work. Look at some existing examples for ideas: Acuity Insurance hosts a successful Facebook page focused solely on long-distance trucking, and The Hartford has a blog written by its in-house team of gerontologists. Allstate’s most active Facebook page is strictly for motorcyclists, and the granddaddy of them all, USAA, speaks directly to service personnel and their families.
3. Support the agent
Until the point of sale is included, there can be no ROI for social media; agents, for most insurers, are the point of sale. So, include them. Agents are in the relationship business and social media is a relationship tool, so there is a perfect match! So why are agents so inactive? There are two main reasons. First, insurers have been paranoid about the risks. This was prudent at first, and insurers were right to be hesitant to have hundreds or thousands of agents represent the brand on social media. The risks to consistent messaging, but especially to compliance and governance, are real. But agents represent the brand every day, and we now have better guidelines and technology platforms to lessen the burden. The risks of social media once were a roadblock; they are now a road bump.
The second reason for inactive agents is that they have been told the wrong story, in part because no one really understood the true story. Social media is promoted as a marketing tool to reach people, increase brand awareness and have a conversation with your community. This, frankly, does not appeal to agents who must sell policies to feed their families. Agents want leads and referrals. Remarkably, this matches the real benefits of social media, but no one has mentioned it. Agents need to better understand what is happening in the lives of their customers so they can provide the right help at the right time. This is what social media is all about: consumers are constantly posting about events in their lives. Now finally that message is starting to trickle out, often driven by entrepreneurial agents who see the gap. The “Social Heroes” are a good example. This is a group of seven Farmers agents sharing their wisdom and success with colleagues. The training they provide, which is not free, lists the benefits of social media as: Increase Sales and Retention, Improve Customer Service and Grow Prospecting. This is a message agents understand.
In summary, you cannot simply load up a Facebook page and check off the social media box. It is more complicated and requires real thinking and planning. If you have no ROI, it is partly because you do not have a fully developed strategy, and that is not the fault of the technology.
Why do people come to life insurance websites? Two tasks are getting more and more prominence on industry sites in the past 12 months: getting a quote and finding an agent. But, according to recent research by the Insurance Information Institute (III), the top two tasks are in fact estimating coverage and finding out how to buy a policy.
Our recent study on coverage calculators unearthed a series of issues lowering the performance of the industry in the former task. And explicit support for people working out how to buy a policy is surprisingly scarce. While Find An Agent buttons are usually easy to find, there is rarely an end-to-end explanation of buying a policy.
This indicates a disconnect between what people want to do and what content companies put on websites. Insurers can easily create a lot of content. Life stages material, case studies, videos about the benefits of life insurance, financial news, stock prices… they all feature on home pages and main menus.
But as yet we little clear evidence, hard data, on why consumers visit insurance websites — the III report is an exception. In fact it is clear from conversations we have with web teams, and from examining many insurance websites since the early 2000′s, that the decisions about what content to include and highlight are made without finding out exactly what people want to do on these websites. The decisions are made on the basis of opinions.
Take, for example, putting company news or general financial news on the home page. Has any insurer ever demonstrated that consumers want to read this? We’d love to hear the evidence.
Furthermore, if insurers had worked out what people want most to do, you’d see convergence in what gets priority in menus and links. But there is still a lot of variation. Some commonality exists in putting quote engines in a prominent place, having a clear login box, and placing a find agent widget. But surprisingly not on every site. Visit five or ten insurance sites and you’ll probably see the same amount of variations on a global menu (beyond the common product categories). The only explanation is that every company has their own opinion. For this to be the correct approach would mean that consumers visiting each of these sites have different needs, different tasks to complete. This clearly is not the case.
Menus on life insurance sites
This lack of a standard clearly indicates that web teams are guessing as to what consumers want to do, and naturally opinions differ between them. At the root of this is a lack of hard, actionable data.
Now that the dust has settled on Progressive’s social media ms-adventure, we can step back and look for lessons learned. The most obvious takeaway is that insurers, even those like 
Progressive with deep pockets, no longer can completely manage the brand’s message. The social media community touts transparency, authenticity and openness, but this is the insurance industry, it will not always be an option. Insurers will find themselves in impossible situations – constrained by confidentiality and regulation, unable to mount an adequate defense or manage the virility of the message.
That is not to say that Progressive did not do itself harm during the episode with some poor judgment and dubious tactics, but the bigger concern is the strategic defense plan not the tactics.
Social media has become a numbers game, with many insurers recruiting as many fans and followers as possible. The opportunity to reach completely new sets of consumers who might otherwise be hard to reach is compelling. According to Jon Beamer, business leader, marketing innovation, for Progressive, “Market entrants are young folks, and those people are watching less and less TV. That’s certainly part of our calculus, trying to get to those consumers when they’re making their initial insurance purchase.”
This digital marketing strategy does not take into account that we are in, according to Forrester, the “age of the customer” and dialogue is two-way, as Progressive has so painfully discovered. There is only one true social media defense – unbiased consumers. We know consumer product recommendations are trusted far more than brand marketing and the same is true for brand defense. Progressive’s own defensive statements in this case were pounced on, ripped apart and spat out by the angry social media mob. Again, some fault lies with Progressive with inappropriate tone and half-truths but it is likely that any statement was going to be mistrusted.
Most noticeable in the Progressive situation was the lack of unbiased consumers – there were virtually no brand defenders. Progressive were left hanging, without support of advocates or customers and the negative message build upon itself into a frenzy, unchecked by reason or debate. That is not to say that Progressive does not have plenty of satisfied customers, but they either lack brand loyalty or underrepresented in the social media fan base.
Social media is much like an NFL team; a successful team must have a good offense and a good defense. Insurers have in some cases focused on the offensive game plan to the detriment of defense and to continue the analogy, Progressive has just given up an interception for a touchdown.
The value of defense was clear in a case in April 2011. USAA had a problem with its mortgage product. Thousands of policyholders were adversely affected, with many complaining on USAA’s Facebook page. USAA acknowledged the situation but left their members to respond; thousands of policyholders, while not disputing the complaints, waxed lyrical about positive customer experiences. The crisis, at least on social media, was averted – the defense held.
The Progressive case should cause insurers to think hard about the role and effect of social media. It is imperative to recruit and engage true fans, trusted brand advocates who will be there in the inevitable time of need. This may mean fan count maybe lower, message reach reduced and brand message virility constrained, but it will reduce risk, and that must be dear to the heart of the industry.
