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Incubator Labs Are Refining the Future of Insurance Marketing 

FM Engage logo
Written By  
Bethany Ramos

Ask anyone, and they’ll tell you that they’re too busy, especially if they’re on a marketing team. This common dilemma perfectly illustrates why so many insurance companies struggle to test in a way that yields consistently higher conversion rates. Testing takes time and resources—which, for many insurance marketing departments, are rare commodities. 

The problem is obvious, but what about the solution? Insurance companies are now leaning on incubator labs to lighten the load, test products, and direct a crystal-clear marketing strategy.  

4 Reasons to Try an Outside Marketing Incubator  

An incubator lab in the context of insurance marketing refers to an innovative outside agency dedicated to researching, testing, and developing new marketing tactics and technologies.  

Insurance companies turn to incubator labs for a few reasons: 

1. Test assumptions about marketing. 

Every company has them: those once-winning campaigns that probably haven’t been revisited in months or, more likely, years. But the world is always changing, and insurance marketing must change with it. What once resonated with your audience might not now. Or alternatively, your message may still be right.   

The point is that you won’t know if you do what you’ve always done. This is why many insurance companies bring in an incubator lab—to test in a way that challenges the status quo and provides clarity on their target group, marketing message, and delivery method.  

A 35-year-old consumer has evolved from five and especially 10 years ago. Does your company still know what’s important to your ideal customer, what drives their decisions, and what message you’re trying to convey? An outside agency can offer these insights before any more marketing dollars are spent. 

An agency may have methods granular enough to test down to the words on the outside of an envelope.  Using the learnings from this data analysis, they can then give campaign strategy recommendations for list selection/targeting, creative with subject line options, timing and messaging, and projected results. 

2. Cut unnecessary costs. 

How does the cost of testing with an incubator lab compare to the cost of traditional testing? This is a common question we get from our clients. The answer is—there’s no contest. Traditional testing methods like A/B can be cumbersome and expensive. A high-performing multivariate testing methodology achieves superior results at a fraction of the cost. 

To get more specific: 

  • Many insurance marketing teams are well-aware of how costly control packages can be to print and mail out. 
  • An outside agency can develop test creatives on behalf of clients that are designed to cost less to produce, while still providing the same open rate.   

Targeted testing saves insurance companies from costly mistakes. Issues like poor audience targeting and mailing out too many materials are what keep campaign costs high. When cultivating a true testing methodology mindset, the identification of the “right” model customer is as important as the offer itself.   

Refining your audience can help cut costs and, ultimately, turn up higher-quality leads by sending to the customers most likely to purchase. Insurance marketing spend is best invested in these prime prospects. 

3. Save wasted time. 

Time is money, and time saved through truly effective testing is no small thing.  

The biggest advantage in multivariate testing compared to traditional testing is speed. Using factorial analysis, an incubator lab can test multiple creatives, data providers, and data models by sending out several mailings. Once complete, they can gather data spanning dozens of variations and gain learnings across all of them.   

Time is precious for internal insurance marketing teams who don’t have bandwidth to test consistently. This is especially true when understaffed. Using an outside agency with proven data models can take testing off your hands, enabling your marketing team to continue driving results while conserving resources.  

Still, change is hard work and comes with risk. This, again, is why many insurance companies turn to an outside agency; testing mitigates risk and paves a clear path toward creating results-driven change. 

4. Increase ROI. 

Truth be told, getting real results is what makes using an incubator lab so attractive. At FM Engage, the exceptional accuracy of our multivariate testing is what allows us to deliver on this promise to our clients.  

Here’s a recent example: One of our clients had been selling Accidental Death and Dismemberment (AD&D) insurance for some time before coming to us. Within only three months, we were able to generate nearly five times the premium from a single direct insurance marketing campaign, compared to their previous marketing. These results earned us an award for our top-tier insurance marketing strategy. 

Rigorous testing also makes for great personalization, a critical component in increasing ROI. Personalizing helps customers feel understood, leading to stronger engagement. Leveraging customer data and preferences ensures you deliver highly relevant offers. Conversions may increase by as much as 27 percent when using personalized messaging. 

At FM Engage, we often serve as an incubator lab for our insurance clients. Our data scientists first build the perfect list of prospects, and then we perform multivariate testing to determine the optimal elements of each campaign.  

Our incubator lab draws from a database spanning 50 years of promotional history to identify the best product for the consumer. This is how we embody smarter marketing. We market the right product to the right person at the right time. Utilizing our data to test initial assumptions and then modify, we help our clients to achieve the highest possible return. 

For many companies, a major roadblock to testing is limited internal resources. To get ahead of this, insurance companies can benefit from adding a line item to their annual budget for testing, along with the research as to why it’s needed. Using an outside agency to help lighten the load of testing can free up the marketing team to focus on their strengths. 

Too Busy to Test? Let Us Be Your Incubator 

If you’re interested in exploring how FM Engage can refine your direct marketing strategy, get in touch. We’ll help you write your success story.  

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