5 Ways Direct Mail Delivers Value For Insurance Marketers
Insurance marketing is supposedly heading into a new era – the age of “insurtech.” However, many of the tried-and-true approaches to marketing insurance remain in place, and for a very simple reason: they work. Direct mail is one of those timeless approaches to marketing insurance that continues to deliver measurable results.
The digital insurance revolution
There’s no question that insurance is becoming more digital. Some of the highest-performing insurance startups of the last half-decade have been digital to their core:
- Lemonade, the renters’ insurance platform;
- Policygenius, the insurance comparison platform;
- Ladder, the online term-life startup;
- Hippo, the multiline product-comparison tool; and
- Berxi, the insurtech play within the Berkshire Hathaway insurance conglomerate.
However, even for some of these startups mail remains the most convenient and customer-preferred way of communicating important policy information.
And for every other insurance company, direct mail is where it’s always been – running the point for customer acquisition and communication.
What we know about direct mail and insurance
There’s a lot of direct-mail messaging aimed at consumers and brokers alike. A recent sweep of the competitive-intelligence site Competiscan showed that insurance companies targeted consumers with more than 14,800 unique mailings between November 2021 and April 2022, with fewer than 100 mailings combined aimed at brokers and business owners.
These mailings run the gamut from policy information to product information to postcard solicitations and represent about 17% of all communications between insurance companies and their constituents – agents, providers, business owners, and consumers.
While that number may be lower than in the past, it’s by no means small. And it tracks extremely well with consumers’ preferences on finding out about Medicare and Medicare Advantage (MA) policies. According to MediaLogic, 18% of consumers prefer to learn about these plans via direct mail.
Nearly one-fifth of communications aimed at one-fifth of customers is nothing to take lightly. Direct mail seems likely to be a major part of insurance marketing for the foreseeable future, meaning the pressure is greater than ever to deliver direct-mail pieces that perform.
Here are some of the best ways to leverage direct mail in an insurance setting to drive results.
To compensate for the lack of web tools
One of the biggest complaints consumers have with insurance companies in general and MA plans in particular is that the plans’ sites lack adequate tools for learning about and comparing plans. This is exacerbated by a perceived lack of usability for many of these sites.
As with so many things, direct action gets the goods, and direct mail is the best way of providing this information.
If you’re uncertain whether key coverage and premium information is getting into consumers’ hands because of hard-to-navigate websites, put that information directly in their hands with direct mail. If a comparison tool is buried deep in your site, send a mailing with a QR code (and the URL itself) to get people there.
Don’t have a comparison tool on your main site? Create a microsite and use mail to push people there.
The ultimate solution for insurance websites with a poor user experience is to redo the website – but that can be almost impossible for insurance companies saddled with legacy systems, compliance issues, tight marketing budgets, and mile-long to-do lists for their IT teams.
In the interim, direct mail can serve as a sort of navigation tool that can get customers where they need to be on your site and leapfrog them to the business end of your funnel.
Create awareness for important dates
For plans with enrollment cutoff dates, premium-due dates or other important dates, direct mail can be the perfect tool to remind consumers of what’s coming up.
With so many people drowning in email and spam filters getting more aggressive, the chances keep increasing of an important date reminder getting lost when it’s sent by email.
Simple postcards with important dates make sure consumers act when they’re supposed to and don’t drop coverage.
Want to make the messaging even “stickier”? Include a magnetic reminder that can be put on the fridge or the back door.
Churn is the biggest issue confronting many consumer-facing insurance plans. Customer acquisition is expensive, pools of potential customers can be small, and competitors are using every available channel – including direct mail – to get in front of your customers.
According to Levvel, the main reasons consumers switch insurance carriers are because of dissatisfaction with their insurance providers’ capacity to:
- Relay frequent updates;
- Provide greater price and benefit transparency; and
- Convey accurate information across platforms.
How can direct mail help with that? As in the previous example, direct mail can put accurate information in people’s hands in an easily digestible format when web tools are not ready or are hard to access.
Frequent mailings, such as in the form of a newsletter, can provide additional touchpoints. Highly personalized mailings can help overcome people’s feelings of being “just a number” to their insurance companies.
Stay top-of-mind with prospects and current customers
Similar to the previous point, insurance is not top-of-mind for most people – nor should it be. Insurance is a fact of life that most people would prefer to ignore until it’s time to renew, cancel, shop around, or cash out.
Gentle reminders about how to make the most of insurance coverage can be particularly helpful for “guaranteed utilization” type of plans like dental and vision insurance.
They can also be helpful for agencies looking to schedule annual or semi-annual coverage reviews.
With all your top-of-mind efforts, remember that most people don’t really want to talk about insurance until they have to. Understand their hesitancy, look to build name and brand recognition, and be personal – not pushy.
Insurance agents can help build stickiness with their customer base by noting milestones –birthdays, anniversaries, or time spent with the agency or a given carrier.
Too often these types of communications wind up in the trash, for two reasons:
- They’re not sincere, and
- They provide no value.
Consider it from the recipient’s perspective: They want you to show you genuinely care, and care enough to provide some additional value.
So while a birthday card is great, a birthday card plus a gift card is even better.
You have to clearly understand the profitability of a given customer before committing to this strategy, but given the high acquisition costs for most forms of insurance, using direct-mail to provide rewards and enhance loyalty might be one of the most effective retention strategies you can implement.
Insurance marketing and technology may be ever-changing, but it’s clear that direct mail still can play an important role for carriers and agencies.
Want to know more about how to maximize your marketing dollar by using direct mail? We’d love to talk with you.
By Jim Felhofer 5/9/22