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31
Mar

Growth Strategies That Move the Needle: 3 Market Development Strategies for Insurance Carriers

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Written By  
FM Engage

Let’s talk about growth.

As an industry, insurers have sometimes been slow to adapt to modern growth marketing strategies. The reason is simple: insurers have always relied on the one-on-one relationships that the best agents have with their clients.

Recently, there’s been a big shift to digital marketing. But, while digital represents a large part of an effective growth marketing strategy, other tactics have been left behind—tactics like direct mail and email. This shift has created an impersonal marketing funnel for many insurers.

Today, our industry faces a tough market, a less-engaged audience, and stagnating growth. It’s time to reintroduce discarded strategies and focus on our customers again.

Using Marketing to Penetrate and Develop New Markets

As we talk about effective growth marketing strategies, it’s helpful to identify the difference between market penetration and market development.

Market penetration is the act of increasing market share in an existing market. This market may be a specific audience demographic, product type or geography. Insurers are often quick to enter new markets, but due to heavy competition, they struggle to acquire additional market share. It’s difficult—but with a proper market penetration strategy, it’s not impossible.

Market development is the act of expanding into a new market with existing products. Market development requires a full customer acquisition funnel to help guide future customers through the brand awareness, nurturing, closing and retention stages. As an insurer, not only should you educate prospects on values and benefits, you should also use marketing and sales methods to close and retain them.

To break into existing and new markets and strategize for business continuity and growth, it’s crucial to have a three-pronged approach that takes into account personalization, digital tools and a pricing structure that meets the needs of today’s families.

(1) Bring Your Digital Tools Up to Date

J.D. Power reports, in its 2020 U.S. Auto Insurance Study, that website functionality has outpaced face-to-face interactions with clients when it comes to customer satisfaction. This is the first time in more than 20 years this has happened. The pandemic may account for some of those numbers, but not all. The fact is, a strong digital presence is a must-have for market expansion. If you’re not tying your in-person efforts or your direct mail efforts to a more robust digital experience, you’re losing potential clients. Your online and offline strategies should work in tandem, giving your customers a consistent, frictionless experience.

What does this mean for your company? First of all, it’s time to update your website. If your site is outdated, hard to navigate or nothing but a billboard for your firm, you need an upgrade. Here’s what else you should be thinking about:

  • Fast online quotes or useful online calculators
  • Apps that allow clients to view and manage their policies
  • A site or app that allows for digital payments or claims disbursements
  • Expanded online communication channels, including email and chat

Generally, you should be investing in insurtech and automated services that make interactions easier for clients. It’s not just a good acquisition strategy, it’s absolutely essential for today’s audience.

(2) Develop Flexible Price Structures for Policyholders of All Ages and at All Stages of Life

It’s no secret that price is a determining factor for many families. As the pandemic took hold in spring 2020, the importance of price and rate-sensitivity jumped by 20% according to the J.D. Power Auto Insurance Shopping Study cited above. What other factor saw a big jump? The number of clients shopping around for new insurance providers.

In today’s environment, even post-pandemic, you can expect your policyholders to seek out better rates. Many direct-to-consumer insurance companies understand this, and they are lowering prices and marketing competitive commission rates to target audiences. You don’t have to have a direct model to reduce rates, however. Even some of the industry’s top performers understand that pricing for their product line needs to be flexible enough to attract today’s savvier clients.

(3) Personalize Your Services and Your Marketing Efforts to Connect With Clients

Just because digital tools are taking precedence doesn’t mean that clients don’t want to be treated like human beings. Personalization is another market expansion strategy that’s becoming more and more important to companies interested in business growth.

Think about how corporate giants like Amazon and Netflix are tailoring experiences to individual customers. Users who shop on Amazon or log into their Neflix account get recommendations designed to suit their personal tastes. Customers in your target market are used to this, and they’re starting to expect the same kind of personalization from all their brand interactions.

Traditionally, the insurance industry doesn’t work that way. In the past, it’s been built on a one-size-fits-all payment strategy and risk mitigation, and the legacy technology many firms still use is not designed to accommodate personalization. But that’s changing, too.  Some insurance companies are outsourcing growth marketing to gain more reliable data and tailor their direct mail and digital marketing services. Others are taking a closer look at their insurance products to better target young families, retirees and other defined audiences.

Another way to bring more personalization to your customer retention and growth strategy is to focus on your complementary services. These can include initiatives that impact clients’ lives and health, such as wealth management services or wellness programs. Adding new offerings helps establish a diversification growth strategy that enters your insurance firm into new business markets and creates more cross-selling opportunities.

Whether you focus on your variety of services, your insurance products or the way you market yourself to clients, make sure you’re giving your clients something valuable and relevant to the way they live their lives. This will bring you more engaged customers and build sustainable growth with your target audience.

Building First-Party Audience Lists Can Bolster Your Growth Strategy

As you develop the three parts of this strategy, take advantage of first party audience data.

Marketers are on the cusp of losing access to cookie-based audience lists. That means that those with access to the most robust audience lists will be producing the most refined marketing campaigns.

Have you thought about how you collect audience data and how you’ll segment it for future campaigns? If not, consider partnering with an insurance audience building company with a deep understanding of what makes your insurance customers tick.

Growth Marketing Strategies for Insurers That Hit the Mark

As you consider the best way to approach a new marketing campaign and reach your growth goals, consider which elements will give you a competitive advantage.

If your goal is market penetration—increasing market share in an existing market—focus on creating customer awareness. You can do this by lowering prices, or you can use a number of top-of-funnel tactics that help you boost your brand:

  • Direct mail
  • Email
  • Display advertising
  • Video marketing strategy
  • Organic social

If your goal is market development—entering a new market with existing products—consider how you can educate your prospects, lead them through the marketing funnel and ultimately retain them.

As you develop a robust marketing strategy or seek a marketing partner, your considerations should include:

  • Creative services and design
  • Digital user experience
  • Audience building and customer engagement
  • Robust audience data
  • A/B testing and modeling
  • Interconnected marketing tactics across a variety of channels

A successful growth strategy often depends on an organization’s capabilities and limitations. Do you have an in-house marketing team that’s up to the task? Or should you outsource your marketing services as a cost-effective way to achieve business continuity and lead generation?

If you are interested in making your marketing strategy more effective, refining your growth strategy or nurturing more leads, let us know. We have the data and creative skills to move the needle for your company.

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