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Bill Tyson CEO Strategic Marketing Plus, LLC Saturday, March 17, 2012
Social capital - “a sociological concept used to refer to connections within and between social networks.”
“Swiss Army Knife” - like features: Advanced Search – because of the accuracy of profile information (if you lie about anything your peers, colleagues will out you), it is more powerful than Google search.
Groups – these community-of-interest-networks go beyond discussions and job postings enabling relationship building around common interests.
Information Sharing – through the use of “social objects” – newsworthy items, not authored by you, that you can share rapidly with those you know will find it relevant.
Paying it forward – meaning the obligation placed upon everyone in LinkedIn to make introductions for and on behalf of your 1st level connections.
Mapping your network – for the first time in history, you can actually
map most of your network. See http://inmaps.linkedinlabs.com.
Market Overview
Opportunities
Strategic Recommendations
Resources to Support Your Strategy Efforts
Open Discussion
The rise of the China and India Middle Class
Aging Infrastructure
China militarization
Increasing demand for Commodities
Workforce training in emerging economies
Keeping the “Wealthy Healthy”
Soft Innovation – quality improvements with existing products and services
Big breakthroughs – some unforeseen (“black swans”) robots, nanotechnology, 3-D printing
Forever recession – lingering unemployment…21st Century models are being disrupted.
Total mistrust of institutions (OWS).
Un-retirement – 66% expect to work after retirement.
Those over 50 control 75% of the wealth in the US.
Obesity epidemic.
Self-service and foreign tech support backlash.
Life expectancy increasing - average will be 100 by year 2029.
Ownership of Life Insurance way down.
Fatigue, Distribution, Technology and Competitive pressures forcing business model transformation. Consumer behaviors that require new, relevant marketing, sales and integrated distribution approaches. The blurring of the lines between insurance products and services. Legal and regulatory challenges - to protect the consumer privacy and ensure equity through minimum loss ratio requirements.
“The trends toward creative populism, personalized measurements, interactivity, open ad inventory platforms and greater consumer control will generate more change over the next 5 years than the advertising industry has seen in the last 50 years.”
Dr. Saul J. Berman, IBM Global Media Practice
Marketing fatigue – across products, channels and traditional media.
Product fatigue – “meaningless differentiation”
Little R&D at carrier and TPA levels.
Product homogeneity is the norm.
Channel Fatigue – increased fragmentation – “a million different niches”.
Direct mail/inserts ROMI is worsening:
Fatigue is across – lists, creative, formats and offers.
Better segmentation leads to smaller and smaller targets.
Material Costs are increasing due to energy costs (affecting paper, delivery, ink, etc. and postage).
Postal delivery slower, less reliable.
Do not mail, “go green” movement. Sponsored direct mail is in direct opposition to “Paperless movements” at major financial institutions.
“The success of my role is far more about analytics and technology than it is about hanging out with my ad agency, coming up with great creative campaigns. We must increase campaign ROI.” Rob Colwell, Executive Manager — Commercial and Marketing, Qantas Frequent Flyer
John Hayes, CMO of American Express
Service Fatigue: Best practices adopted over the years adds leads to proliferation of sameness:
Key Performance Indicators, ROI and Lifetime Value calculations enable “apples-to-apples” performance.
Technology and automation of workflows and processes.
New metric is the Net Promoter Score (NPS)
Rise of Enterprise Risk Management programs to deal with common business risks
Traditional Associations are facing mounting pressure to become more relevant.
Governmental Employee Unions – are facing cost shifting of welfare programs and cutbacks due to mounting deficits (Federal, State, Local)
Trade Associations – tough to sustain membership when dues are optional.
Manufactured Associations – face increased scrutiny and potential extinction.
Employers/Worksite programs – cost shifting – from being providers (and subsidizers) to enablers of insurance for their employee/consumers.
Financial Institutions – eliminating programs to avoid additional litigation and regulatory challenges.
Approval process on new products takes years, not months.
Channel opportunities have been reduced or eliminated: Outbound Telemarketing bans and elimination of statement inserts to trans-promotional ones (like Amex page 2 & 3 ads).
Preference now goes to internal bank products.
Web sites are profit centers – highest money contributors win.
Card issuers – facing high degree of fatigue.
Leveraging social media for loyalty programs.
Mobile Commerce and Call Center platforms – emerging to compete and fill void of financial institutions and/or use insurance as a means to monetize traffic.
0
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2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
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9,000,000 Accident Disability (< 1%)
Accident HIPs (23%)
Accident Indemnity (< 1%)
Accidental Death (9%)
Accidental Death, CI Hybrid (1%)
Accidental Death/Disability Hybrid (< 1%)
Accidental Death/HIPs Hybrid (3%)
Accidental Death/HIPs/Disability Hybrid (< 1%)
AD&D (28%)
Doctor Indemnity/HIPs Hybrid (4%)
Health Discount Plan (2%)
Term Life (13%)
Whole Life (16%)
2011 Carrier and Product Direct Mail Volume
2011 Carrier Mail by Product
AD&D was the top insurance plan promoted
Minnesota Life was the main carrier (96% of offers)
Life insurance offers comprised 29% of mail as American National promoted Term and Mutual of Omaha sent Whole Life mail
Accident Hospital Indemnity accounted for 23% of mail and American General Life led offers with 71%
Four carriers promoted Accidental Death with Wells Fargo in 2011
ACE was observed during Q2 2011 (4.8% of AD), Assurant was observed during Q1 (17.7%) while Minnesota Life (12% of AD) and Transamerica (65.4% of AD) were observed to be in the mail box each quarter
Bank Comparison of Mail 2010 vs. 2011
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Wells Fargo Bank of America Citibank U.S. Bank Chase
2010
2011
Bank % Change 2010 to 2011
Wells Fargo -29%
Bank of America -53%
Citibank -70%
U.S. Bank 21%
Chase -97%
2011 Carrier Mail by Product
Minnesota Life 28%
Mutual Of Omaha 16%
American General Life 16%
American National 13%
Chartis 7%
Transamerica 6%
The Hartford 6%
Chubb 3%
Coverdell 2%
Assurant 2% Zurich
1% ACE American 0%
Share of Wells Fargo Insurance Product Mail 2011 Wells Fargo worked with 12 different
carriers during 2011 as opposed to 2010 when it worked with 9 different insurance companies for Life and Health plans
The top 3 carriers for 2010 were Chartis (31%), The Hartford (24%) and Transamerica (12%)
Minnesota Life doubled the mail it sent in 2010 to become the top insurance partner for 2011
Mobile Access/Apps.
“Tap and Go”, M-commerce (NFC)
Mobile Financial Services – wave started by mobile banking.
From SaaS to XaaS – “Everything as a Service” aka Cloud Computing:
Cost advantages
BUT worries remain about Outages & Security
Big Data – struggling to make it actionable.
Cyber Disruptions – cybercrime, cyber-war and cyber-terrorism.
“Gamification” – great way to engage audiences
Competition is intensifying
“Pay-as-you-go” models emerging - auto
New emerging competitors have these attributes:
Cool Brand, No legacy
Technology-driven
First mover advantage
Partnerships and alliances
Customer experience leaders – exude passion and comparative expertise.
Outsourcing is intensifying
In our business, there is a “Herd-like” regression towards the mean
Great awareness of competitor positions and moves particularly at publicly traded companies.
Pre-disposition to make adjustments to match competitors in coverage and rates.
The more tightly contested the category, the more clustered the competition:
The more hyper-vigilant companies are going to be sensitive to the movements of those around them
The more poised they will be to respond in kind. (1)
(1) Youngme Moon, March 2010: Different, page 41, Kindle Edition, Random House, Inc.
Mobile/Portability is going to be a big disrupter.
Service is going to be the linchpin of the integrated channel experience.
Personalization and customization is necessary to reinforce the customer relationship
Must have Real-time responses to data to provide business advantage.
Flexibility that dynamically aligns with customer use and behavior. Modular products and new, more equitable pricing models (“pay-as-you go/drive” auto insurance, etc.)
Forester Research, 2011
“Consumers are moving outside the purchasing funnel—changing the way they research and buy your products. If your marketing hasn’t changed in response, it should.” -McKinsey Quarterly, 2009 #3
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Awareness
Consideration
Preference
Purchase
Re-purchase (Loyalty)
Familiarity
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HBR: The Customer Decision Journey
Advocacy
Let’s take a look at a Life Insurance Customer Experience Map.
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Direct Mail/Email/Word of Mouth When Mark receives his first bill and policy in the Hawkeye welcome kit through the mail, he finds an insert that offers discounts on bundled car, life, and home insurance. Mark tells Molly, and she looks online to see what car insurance at Hawkeye covers, and what potential savings could be had by bundling.
Direct Mail/Web Mark receives a direct mail offer from Hawkeye Family Life to buy guaranteed tem life insurance. The cost seems affordable and he has considered buying additional coverage for his growing family, beyond the plan his employer provides. Mark visits the PURL (personalized URL) that is referenced in the mail piece, enters his email address, and fills out a quote request.
TV/Online/Social About a week later, Mark and Molly see a tv ad for a new car that she is considering buying. Mark mentions that he saw some car buying tips on the Hawkeye website. Molly goes onto the Hawkeye General website to check out the car buying tips . While on the website, she enrolls for the enewsletter that includes gas saving tips and other auto related articles. And since their oldest child will be driving soon, they join Hawkeye’s parents blog re: best ways to teach good driving skills to your children
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Online/WOM
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Later that evening when online, Mark notices an ad for term insurance from Hawkeye Life. He decides to check to see how rates compare, and when he googles “affordable term life”, he sees Hawkeye near the top of the list. Mark clicks on a couple sites to check their rates, and as he surfs the web, another Hawkeye message appears. He visits a few more sites with customer reviews and see a lot of positive feedback.
All information contained herein is confidential and/or proprietary information of Epsilon Data Management, LLC. Any unauthorized use and/or any disclosure is strictly prohibited.
Direct Mail/Web/Phone
In his mailbox the next day, Mark finds a thank you note from Hawkeye for clicking on the calculator, and offers him a 5% discount if he signs up online. Mark decides to take advantage of the offer and buys a $500k term life policy from Hawkeye. During his purchase, a prompt to add a policy for his spouse at a 20% discount is offered. Mark decides to purchase a policy for her, too. The following day, a Hawkeye agent calls to set up medical exams for both Mark and Molly.
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Email/ Direct Mail/Phone
An agent calls Mark and Molly to review the final policy, and let’s them know they will receive a survey via email in the next few days. In return for providing Hawkeye with their feedback on the experience, Molly and Mark will receive 2 Starbucks gift cards in the mail.
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Email Knowing that Mark linked into the PURL, but didn’t make an initial purchase, Hawkeye Life sends Mark an email the next day that points him to the coverage calculator to help Mark determine the appropriate level of coverage based on his needs. He goes online to further investigate his options using the weblink to the calculator, and also researches the cost of an additional policy for his wife, Molly.
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Sample Life Insurance Customer Experience Map
“With internal and external research in hand, journey-mapping leaders need to distill their findings about: 1) how customers interact with the company, 2) what they want from each interaction, and 3) how they feel about each interaction today—the three key elements of a journey map.” [1] Bruce Tempkin, Author of the blog: Customer Experience Matters.
• “Sales Funnel” to Lifecycle. Marketing needs to reflect the new reality.
• Interactivity that drives engagement.
• The 3 “C”s – choice, consistency and continuity.
• Leverage Channel Synergies:
How are you speaking to your customers/prospect, what channels are you using? Can you utilize more?
• Measure all interactions:
Campaigns, segmenting internal and external data
Targeting, frequency, multiple channel consistent messaging
Performance indicators help to optimize channels 33
• Master use of data and analytics
• Leverage insights to ensure value proposition remains strong
• Use multi-channel marketing
• Structure relevant offers that foster engagement in an efficient way to fund new growth opportunities
The Impact of Social Networking on Insurance Direct Marketing
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Always on, 24 by 7 3 Drivers:
People’s desire to connect New and improved interactive technologies Online economics
Great tool to amplify messages and campaigns, Establish a dialogue with prospects, proactively participate in “the conversation”
A few revenue models are emerging: Example - Facebook IPO implied valuation = US$24 billion.
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• Blogging
• RSS Feeds
• Podcasting
• Texting
• E-Cards
• Photos (flickr.com)
• Videos (youtube.com)
• Publishing
• Email Campaigns
• Social Networking
– Google Plus
– Skype
– High5
– MySpace
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1) Traditional Mass Media is passive consumer participation, Social Media is active consumer participation.
2) Traditional Mass Media is one-way “one-to-many” communication, Social Media is two-way “one-to-one” communication.
3) Traditional Mass Media targets isolated consumers, Social Media connects consumers who generate conversations and content.
4) Traditional Mass Media is message-driven, Social Media is conversation-driven.
5) Traditional Mass Media is built around perceived brand control, Social Media is built around shared control and humanizing transparency.
6) Traditional Mass Media consists of a limited set of targeted channels, Social Media consists of a conceivably unlimited number of targeted channels.
7) Traditional Mass Media impressions are fleeting with awareness subsiding after date of publication/broadcast, Social Media conversations and content are lasting and continually discoverable via search engines.
Traditional Mass Media is brand-driven, Social Media is service and consumer-driven.
9) Traditional Mass Media has limited reach with increasing cost as reach expands, Social Media offers unlimited reach and micro-targeting while investment remains relatively constant.
10) Traditional Mass Media is a financial investment in paid channels and creative, Social Media is a social investment in people, conversation and user-generated content.
From the blog “Association 2020” by Stuart Meyer, http://association2020.wordpress.com/
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Social Media Conversations
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But 4 Networking Sites Stand Out along with
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2. Why Facebook Needs to Be Taken Seriously
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Relinquish Control over the message
Honesty, ethics and transparency
Participation in the community is marketing
Communications to audiences is outdated
Build value for the community
Inspire your community with real, exciting information
Intelligently manage media
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Word of mouth succeeds because: It is believable – testimonials are far more credible than any media source.
It is self-reinforcing – if you hear the same thing from multiple sources – then it must be true
It is self spreading – if a product or service is great, its word of mouth generates more word of mouth and the effect is exponential.
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Another communication channel
Amplification
Deeper insights into lifestyles
Immediate indication
Self-promotion
Social media is here to stay
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Listening
Talking
Energizing
Supporting
Embracing
2 Additional Uses for Social Media:
Making a Social Impact
Mobile – “always on, always accessible”
Participation
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Cost isn’t high but Resources can be drained.
Spreading yourself too thin.
Stay true to the brand.
Can’t control everything.
Participate in the conversation.
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Associates must qualify to participate in social media
Discuss approved social media vehicles
Simulate possible engagement scenarios
Discuss commitment, responsibility
Sign agreement
Streaming audio, video, iTunes.
Zip car – car for those who don’t want a car.
Cloud Computing.
Identity Theft protection.
Red24 - is a leading global security company providing global risk management to employees and companies.
Auto Service – Extended Warranty.
Healthcare and Financial regulatory reforms.
Many Sales practices under scrutiny.
Information security and privacy concerns.
Longer State filing and due diligence periods on insurance and investment products and programs
Diverts scarce company resources.
One-way monologue to a two-way dialogue.
Customers don’t separate marketing and service from the product…all of it is the product.
Marketing needs to become an “engagement engine”:
Touch point management around points of influence throughout the lifecycle.
Cross functional councils & external partners.
Customer insight driven – to evolve and change.
Requires being Data rich and possessing an analytically intense “backbone”.
Striving to ‘delight’ – pleasure and enjoyment out of the insurance buying experience (NPS).
Expertise -
Collaborative & Consultative
Expert advice
Navigating complex coverage/plans
Decision support
Advocacy
Worksite Benefits - According to a 2011 study by LIMRA, 30% of U.S. employers are considering adding a voluntary benefit to replace employer-paid and contributory benefits within the next two years - affecting between 19 million and 45 million employees.
Life Insurance – 30% of US Households have none.
Cross Selling – using a digital tool like Wisemuv.com
Mobile – ads selling individual products to affinity groups.
Turn key benefit programs (see Copower.com) for professional practices.
Partnerships that provide Personal lines and Commercial P&C revenues.
Direct-to-consumer lead generation.
Policyholder marketing campaigns for dormant blocks of business.
Outsourcing with US firms continues to rise.
Sell and Administer Services – example: Healthcare solutions – like 24by7 Health.com
Over age 50, Senior Products capability. (They have the wealth)
1. Make change leadership, growth and innovation core competencies.
2. Promote operational excellence and flexible /adaptive operating models.
3. Foster innovation– invest in and develop relevant, unique, sustainable new products and services.
4. Seek New Market entry to exploit new market opportunities (serving the under-served), partnerships, channels etc.
5. Manage your strategic, business and enterprise risks.
The need to generate new revenue streams to grow and replace mature programs.
CVP based on True Differentiation.
Improving the member/customer experience (to one that is authentic, genuine and compelling).
An understanding that the consumer is in control, not the advertiser.
Leveraging Data and Analytics.
Multi-channel marketing proficiency.
Being impactful, e.g. being proactive, innovative, relevant/authentic to younger members. All touch points and interactions executed seamlessly with thoughtfulness, relevance, accuracy and precision (at the right time).
Striking a Balance between “monetizing” traffic and member/accountholder base without being obnoxious and intrusive (privacy is a big issue).
Access everything through http://www.billtyson.com
See Strategy-In-Action blog at:
http://www.billtyson.wordpress.com
For a copy of the Recommended Format for a Strategic Marketing Plan, please visit my web site at: http://www.strategicmarketingplus.com and go to the contact page.
AIPAGIA Presentation is available at:
http://www.linkedin.com/in/billtyson
