In April of 2009, Consumers performed 137.2 million financial need-based search queries compared to only 16.6 million product and brand based queries. What does this tell us?  By looking into Consumers’ online search behavior, one can see that broader need-based searches capture significantly more attention than product-based and company-based searches.  Need-based searches (e.g. “debt” and “financial advice”) dwarf product and company searches (e.g. “life insurance,” “annuities,” “MetLife,” and “Northwestern Mutual”) by nearly 8 to 1.

In just the last decade, the rapid proliferation of the internet and technological advances in communication have transformed the user experience from a static, ancillary business afterthought to a revolutionary commercial force that has redefined industries and fundamentally altered the marketplace. We see two fundamental changes in the way consumer interact with the online channel:

• Rich Interactivity: Consumer behavior has evolved as a result of growing connectivity and bandwidth, which has given rise to a new engagement model: rich, dynamic, and experiential interaction. The new paradigm is seamless, ubiquitous, and “always on” connectivity and rich, multi-media, interactive engagement;
• Social Interaction: Consumer behavior has also evolved from purely ‘search’ based interactions to ‘social’ interactions. From anonymous consumers visiting company and product sites the interactions have evolved to consumers participating in multiple professional and social networks and companies ‘visiting’ consumers to spread their message.

The rapid adoption and consumption of technology has empowered consumers to define the marketplace themselves, forcing companies to pay attention to the power of their communities and listen to their now Word of Mouth-magnified voices. Companies that have recognized this new paradigm have extracted significant value, capitalizing upon dis-intermediation opportunities, accelerating the dissolution of traditional barriers, and harnessing the power of data to drive impactful customer analytics.

The broader trend suggests that consumers are seeking experiential interaction online, which has shaped internet behavior and technology use. What does this all mean? Online consumer behavior is migrating toward intimate, intelligent, and immersive interaction and, as a result, the engagement model needs to evolve similarly. As the engagement model moves further into adjacencies it creates an opportunity to create awareness for your brand and products.

Companies now need to meet the Consumers where they are instead of relying on them to come to you. Insurers are finding ways to reach out to consumers via:

1. Search Engine Marketing – Strategically purchasing keywords on engines like Google.  45%-50% of insurers’ online marketing budgets was spent on paid search in 2008¹
2. Social Media – Insurers are capturing Consumers’ attention by engaging social media sites such as Facebook and even creating their own.  For example, Liberty Mutual’s Responsibility Project has had over 300,000 monthly unique visitors in 2010²
3. Niche Content Sites – People concerned with financial security target sites that offer expert financial information and tips (e.g. Motley Fool)
4. Niche Customer Segment Sites – For example, Baby Boomers or other people close to retirement look for advice on how to get the most out of their savings on retirement specific sites (e.g. AARP)
5. Online Opinion Leaders –By reaching out to individual opinion makers or bloggers, insurers can tap into their ‘loyal followings of Consumers

By weaving your brand message into the fabric of Customers daily lives it allows for Companies to drive the conversation and anchor on their value proposition instead of the dialog becoming about price or more commoditized attributes.

As highlighted in recent post, Are You Catering to your Customers’ Anxieties?, New York Life is an excellent example of this with their recently launched Guarantees Matter micro-site. (Full disclosure: New York Life is a client, and we helped it with this initiative.) The site serves a different purpose that their Corporate website by delivering a targeted message around the need for Insurance related solutions in the wake of the recent Financial Crisis. The site has been the recipient of several awards, a Webby Awards Honoree, IMA’s Best in Class for Insurance and most recently awarded GOLD in the Consumer Retail Website category at the 16^th Annual Financial Communications Society (FCS) Award ceremony.

For a company whose primary customer touchpoints are its field agents, the Guarantees Matter micro-site allows New York Life to directly engage consumers through animated videos, interactive tools and simplified textual content. By interacting directly with consumers, the site positions New York Life as a company Consumers can trust with a storied history helping consumers navigate through tough economic times.

Through a diverse set of digital channels, New York Life has adapted to Consumer’s changing online behavior as it becomes more broadened and evolved. The Guarantees Matter micro-site is one example of a larger digital strategy effort being led by New York Life. New York Life has also experimented in other Web 2.0 avenues, exhibited by their recent success with Facebook and LinkedIn pages which serve to attract recruiting prospects.  The result is a richer more intelligent experience across all channels allowing New York Life to broaden and deepen their Customer relationships.

In closing, we are curious as to your opinions on this topic. How are you driving traffic to your site today? Are you aware of the broader customer needs that your product/service fulfills? Do you know where your consumers go today to talk about these needs? Please feel free to comment below.

¹ USDM.net Report: Taking the Mystery out of Search Engine Marketing for the Insurance Industry

² Compete.com

Driving Traffic to your Site: From ‘Build it they will come’ to ‘ Go wherever your customers are’ is a post from: Connections

We frequently hear consumers are increasingly embracing the Web for researching and purchasing all kinds of products – including insurance products that were often considered ‘sold’ by agents or advisors versus  having been ‘bought’ by consumers.  According to Celent, Web “influenced” life insurance purchases will rise from over 40% in 2008 to over 80% in 2011 (i.e. consumers research but don’t necessarily buy online).  Online purchases are expected to increase from 10% to 30% (i.e. research may have started offline), and end-to-end transactions occurring entirely over the Web will grow from 3% to almost 10% over the same timeframe. This proportion is much larger for auto insurance with almost a third of auto insurance purchases being sold online.

Traditionally, agents / advisors (hereafter “agents”) tout expertise in analyzing client situations, combined with wide and deep product knowledge, as a way to assure clients they can offer an ideal tailored solution.  Meanwhile, for consumers, the 24-hour accessibility of online information and the ability to expand the breadth, depth, sources, and mediums of information have inevitably led to growth in use of the Web for research and purchase.

While the influence of the Web clearly continues to rise, what are the pros & cons of the Web vs. face-to-face agent interaction that insurers should understand in order to design the appropriate consumer experience for the purchase of complex financial products?

Consideration 1: Motivation to Purchase

Why Consumers Go Online: Agents may often “sell what they know”, not what is needed

A recent review by a Top 3 life insurance and annuities provider showed:

• Product interest by consumers whose leads were passed from the Web to agents most often resulted in the sale of products that differed from those in which consumers had noted interest.
• In fact, the products sold to new customers more often reflected the respective agents’ highest volume products.
• While high volume products may be popular for good reasons, key executives felt some sales were attributable to agents moving their ‘best sellers’.

Why Consumers Choose Agents: Consumers “don’t know what they need”.  Agents help consumers understand needs and solutions.

• Many agents are Chartered Financial Analysts, who must pass three 6-hour exams, possess a bachelor’s degree (or equivalent), and have 48 months of experience in an investment decision-making position (CFA Institute).
• While not all are CFAs, premier carriers require extensive training and agents spend their careers immersed in relevant content, analysis, and financial planning

Consideration 2: Dealing with Complexity

Why Consumers Go Online: Despite intensive training & information access, agents are capable of bad advice.

• Nearly 40% of surveyed consumers trust insurers for retirement advice only “slightly” or “not at all” (Diamond, 2008).
• Complaints against financial planners rose 50% from 200 to 2008 (Council of Better Business Bureaus, 2008).
• A review of customer complaints and enforcement actions in 20 states uncovered over $90M in fraud and abuse by financial planners in the last three years.  Tactics included phony tax shelters, real estate partnerships, and money market accounts as well as Ponzi schemes (North American Securities Administrators Association (“NASAA”), Council of Better Business Bureaus, ACE Insurance, 2008).
• Enforcement statistics compiled by NASAA involving its members in the last three years indicate 8,365 enforcement actions in which $1.8B was ordered returned to investors (2009).

Why Consumers Choose Agents: The information overload from volumes of data, from multiple sources, and complex language can be daunting for consumers to navigate.

• Manta, the largest free source of information on more than 60M firms worldwide, counts over 1200 life insurance companies in the United States.  Consider the breadth of products and configuration options from any of these firms and the volume of choices is staggering.
• Agents are well trained in products and are motivated to move them, fueling their absorption of information to a degree consumers are unlikely to match.

Consideration 3: Developing Trust

Why Consumers Go Online: Consumers become dependent on agents and assume agents are staying on top of changing markets and client needs when they may be focusing on other accounts (or asleep at the wheel)

• Industry watchers are concerned that a large percentage of investors are in denial about the poor advice they receive (See Stockbrokers gone wild: Investors in Danger).
• People can be especially forgiving of personable agents.  This irrational behavior can apply to an array of professionals.  In his book Blink,, Malcolm Gladwell provides a compelling hypothesis that generally concludes personable doctors liked by their patients don’t get sued for malpractice—but less personable ones often do!

Why Consumers Choose Agents: Consumers are not always proactive in protecting themselves.

• A recent New York Life study found a 49% gap between the life insurance coverage families had versus what they needed (per respondents’ own need descriptions).  Agents are trained to identify coverage gaps and to educate families on improving their financial position.
• Life insurance market penetration is down 68% to 62% from 2005 to 2009 despite an aging and growing population (Nielsen Insurance Audit, 2009).

As the Web’s influence continues to grow, insurers should develop compelling content and tools to further attract consumers and help increase their understanding—perhaps helping return the industry to peak levels of market penetration.  However, as qualified agents will always have a place in the market to provide deep expertise, a little encouragement, and face-to-face interaction, insurers will have to strike a balance and continue to invest in their agents.

How well does your organization balance the interests of end consumers vs agents? Are you investing too heavily on the agent and not the consumer or vice versa?

Debate: Should Consumers Work with Agents or Go Online for Investment and Protection Products? is a post from: Connections

Internet As the Skin of your Organization

[Co-authored with Jamie Yoder]

In this first post, part of a series on the “Evolving Role of the Internet” we will examine how the role of the Internet has changed within insurance carriers from the early dot com years to now.

Imagine walking into the Big House at the University of Michigan with a capacity of over 100,000 and finding yourself amongst thousands of other Insurance officials shouting at the top of their lungs about having the best auto insurance with the best deductible,  or offering the best immediate variable annuity with the most advantageous GMWB rider. Contrast that scene with walking into a cocktail party where you mingle with the other guests, move from room to room, have conversations with other like-minded guests, exchange your views (and business cards) and form friendships and relationships.

Get the picture? The role of the Internet is changing in a similar fashion – from being the “mouthpiece” of the insurance carrier, blasting out messages one way, to becoming the “skin” of the insurance carrier, sensing the mood of consumers, agents, advisors, businesses, government, enabling more intimate communications conversations, influencing attitudes and essentially become the primary interface of the carrier to the external world.

The skin of the human body plays four critical roles – it provides a sense of touch, it acts as a barrier against infections and ultra-violet radiation, it regulates body temperature, and it synthesizes Vitamin D in the presence of sunlight.

TIAA-CREF's Nest Egg Challenge

The Internet is now capable of playing similar roles. It has changed from being a passive ”brochureware” platform, proclaiming the greatness of one’s products and brand, to providing a true sense of the experience that the customer is likely to have if they do business with the insurance carrier. For most customers of Progressive the Internet is most likely their first experience with the carrier. Whether it is the Route-Rageous Facebook application by Progressive that teaches basic driving skills in a funny way or TIAA-CREF’s Nest Egg Challenge Facebook application, a viral application on tips to save, insurance carriers are expressing and exposing their products in engaging new ways.

Just as the skin regulates body temperature, the Internet channel has been used effectively by the carriers to regulate the barrage of customer service queries, especially during catastrophic events. Once again, Progressive, an early adopter of social media, used Twitter as a real-time communication tool to drive traffic to ProgressiveResponds.com during the aftermath of this year’s floods in North Dakota and summer hailstorms in New Mexico. (See Progressive Details Twitter Strategy). It proved to be an effective way of communicating real-time during the post-catastrophic events, without placing a significant burden on customer service centers.

The Responsibility Project

With increasing usage of social networking and user-generated content, the online channel is also becoming a medium for synthesizing the views and needs of your customers and prospects so that you can tailor your products and services appropriately. The financial crisis and the resulting massive drop in the financial markets impacted consumers from all walks of life. Carriers like Liberty Mutual through the Responsibility Project site and USAA through their community website WOYM (What’s on Your Mind) are actively seeking user feedback and views to sense and then synthesize the appropriate response to the concerns of their customers. USAA recently absorbed the site into its existing website, Facebook, and Twitter interactions with its customers and boasts one of the largest followings (around 40,000+ fans) amongst insurance carriers.

Finally, the corporate skin, just as the human skin, needs regular care and attention and should not be left to wrinkle. Are you treating the Internet as the skin of your organization or is it still the mouthpiece? Are you treating your skin with adequate care and attention?

In future posts, we will explore the changing role of the Internet from different perspectives.

Evolving Role of the Internet – Part 1: From being the ‘mouth’ of the organization to becoming the ‘skin’ is a post from: Connections