Posts Tagged ‘Insurance’
I recently ran across a blog article from a major news outlet that talked about the personal impact of a particular notice that the author had received from an insurance company regarding the disparity in the national tax treatment of same-sex couples and how it applied to their situation within the state of Illinois. One of the key phrases in the letter to policy holders said, “Pursuant to Section 3 of the Federal Defense of Marriage Act (“DOMA”), same-sex couples and civil unions are not recognized for the purposes of federal law. Therefore, the favorable income-deferral options afforded by federal tax law to an opposite-sex spouse under Internal Revenue Code sections 72(s) and 401(a)(9) and “spousal continuation” rights are currently not available to a party in a civil union.”
The blog went on to point out that this type of document blatantly shows what discrimination looks like, and how the mishmash of laws between the states and the federal government make things needlessly complicated for real people. It’s not just an abstract notion anymore when it affects you directly. Because of the data we track, we see these kinds of notices all the time. This dry legalese tone isn’t unique to this situation, and is actually quite common for all sorts of communication from every carrier. As someone who’s been in the industry a long time, I recognize this sort thing as standard boilerplate disclosure language and thus don’t take its dry tone personally, but unfortunately, for someone who is simply a policy holder and unused to dealing with this type of heavy detailed language, it can seem quite clinical and intimidating.
It got me to wondering why insurers so often communicate like this. Is it to step back and only inform without putting any kind of a slant on it? Perhaps so, but mostly I think it’s intended to be posterior-covering information intended to absolve the insurer from responsibility for the situation being what it is; almost as if to cry out to the consumer that regardless of the issue, “it’s not our fault!”
The questions I’m putting forth are these; why do insurers seem to only communicate through the dense wording of legalese? Political stance for this particular issue aside, why not soften the language, combine the notice with some sort of contextual piece, and perhaps a Q&A document? For sure cost is a factor for direct mail, but with so many consumers opting for “green” email communications, that’s fast becoming a non-issue. I’d propose that either they are either lazy, don’t care, or simply lack some sort of incentive to do things differently. Which do you think it is? Regardless of the reasons, in this season of making new-years resolutions, perhaps this is a good time for insurers to try to communicate at a more personal level and quit alienating their policyholders.
On a recent trip, I flew on an airline that I hadn’t used in a very long time. It had the cheapest fare, and since I wasn’t going to be flying first class, I figured it didn’t matter. In my mind, coach is coach, and it’s pretty much a commodity at this point. I truly didn’t worry about which carrier it was. Hindsight being 20/20, I wish I could go back in time and change my decision. On the other hand, I got to see a real life example of why the timing and concept of a marketing message is important, and how doing it wrong can potentially have a negative effect. My intent here isn’t to bash my flight experience, but it provides the context for the sales offer I heard.
I’m a tall guy, not freakishly so, but tall enough that I am extremely uncomfortable in places like movie theaters, the back seats of cars, and of course coach airline seats. The seats are measured to accommodate waists, not shoulders, so they are inadequate for anyone older than middle school kids if you don’t want to touch the person next to you or get hit by every single person walking down the aisle of the plane if you have the aisle seat, which I did. So after nearly three hours of getting hit, rubbing shoulders with the guy next to me, and getting irritated by the frequency of annoying interruptions/announcements over the intercom trying to sell me a variety of lunches and beverages, I was treated to a nearly four minute announcement that could not have made me feel worse about my flight. I spent the last few minutes of time, when using electronic devices was still allowed, to hear an offer for their frequent flier mileage credit card – complete with the promise of a large number of miles added to the account if I filled out the application today.
I think the best time to try and approach someone for a loyalty program is when they’ve had a positive experience, or at least a potentially positive experience, not after three hours of near misery. Perhaps I’m being melodramatic, but the anecdotal evidence I have points to the fact that most people don’t usually have a great flying experience. Since everything about the flight both physically, and from an aesthetic point of view (the plane was dirty and they were too cheap to have any video monitors) wasn’t great, I was left wondering, “Why would I inflect more of this on myself?”
This brings me of course to the inevitable insurance tie-in. While this airline was cheerfully trying to sell me more misery, it occurred to me that insurance as a product tries to alleviate misery and suffering by providing the resources to make you whole after what is usually a horrible experience. What I found interesting here was that insurance companies in general and this particular airline had opposite strategies. Insurance companies try to sell you in advance of a horrible experience, largely needing you to imagine or remember a bad event, in order to sell you products that help heal and restore you to where you were before the event. While at the same time, this airline was trying to sell me on the opportunity for more experiences like the one I just had without taking into account that it might be a bad experience and would reinforce that experience rather than alleviate it.
Can you change outcomes and build on sales opportunities if you change your timing? It would be worth a shot to find out. I wonder what would happen if insurance companies used the context of a bad experience, like an auto accident, to update and cross sell products like supplemental health and life insurance – that hasn’t happened to people I know that have been in accidents. And conversely, if the airline had tried to sell me a loyalty program at the start of the flight after getting settled in and might be in a better mood and more receptive to a well-tailored sales pitch. Perhaps opportunities lie in the “when”, and not always the “What” or “Why.”
I had the opportunity to do the tourist bit here in Chicago recently, and took a guided Segway tour of some of the sights along Millennium Park, the Museum Campus, and Soldier Field. One of the things that caught my attention as part of filling out the inevitable pre-activity paperwork was the opportunity to pay for “flat tire insurance.” It’s wasn’t really insurance but just a $3 add on fee that would keep me from paying $36 each, if a tire went flat and needed repair beyond just filling it back up with air.
I declined, since I thought the fee was pointless and annoying, and waited for the guide to press further like they do at car rental companies. He pressed further, but not in the way I expected. Normally in the insurance world you get either a dry jargon-filled description that’s impossible to relate to, a “but it only costs this much” sort of sales pitch, that’s impossible to relate to, or a bunch of complicated concepts and enough footnotes to make your head spin, that’s also impossible to relate to. What I got was blunt, simple, and allowed me to visualize the risk. Our theatre major turned tour guide was no Caspar Milquetoast.
“We get a flat tire around here at least once every couple of days,” the guide explained. “You’ll ride over lots of broken glass from the jerks (my word not his) that bring beer and soda bottles into the parks and a lot get broken.” And the kicker that “sold” me was how he described what happens. “You can usually hear the glass crunch as you drive over it,” he said. “Then if it sticks, you hear a clicking sound as the tire spins and the glass gets stuck in the tire. Even if you stop right and pull out the glass, by the time you get back that tire is going to be flat.” He closed with, “you want to pay 3 dollars now or wait and pay 36 or maybe even 72 bucks for that when you get back?”
His sales technique was surprisingly simple but effective. It shifted focus away from the cost and toward the risk that the $3 paid for. Inside of a quick one minute conversation, I learned what the risk was, how likely it was to happen, and got a description of the risk occurring that I could actually relate to. The close he used was spot on as well, so I would have looked either foolish or foolhardy had I refused at that point. The reminder I took away from the exchange is that if the client doesn’t understand and relate to a risk, they won’t pay to insure it. But, if you give them the information in a way the client can visualize, and relate to, they will.
I’ve looked at the top social media marketers in the insurance industry; I’ve decided to review some to the mobile applications insurance companies are launching.
There has been a ton of buzz surrounding mobile broadband services and how companies can maximize marketing efforts through this channel. In 2011, mobile sites and applications grew at a fast pace, and rightfully so. I personally no longer only rely on computers to access the Internet. It’s either my iPad or my iPhone, and I’m in the same boat as about 75 million other smartphone users.
As I embark on my 5th year of competitive intelligence analysis and consulting in the insurance industry, I have watched these channels develop, and though I am only one opinion, my demographic is the intended audience of such marketing efforts.
I plan on digging into some of these major P&C insurer’s mobile functionalities and giving my two cents. Is this channel affective? What are the capabilities? Do people use mobile broadband services for insurance? What are consumers saying? These are some of the questions I’ll address.
We’ve examined the insurance industry pioneers – GEICO, Progressive, Allstate, State Farm, Aflac, and Farmers – so who is setting the bar in the mobile broadband space?