The question still remains whether a critical mass of consumers will actually purchase insurance online-not just research options and get quotes. But 21st Century Insurance Group is betting they will.Even with that belief driving its e-commerce strategy, however, the Woodland Hills, Calif.-based personal auto carrier hasn't been passively waiting for consumers to get accustomed to the idea of buying their policies online.

Instead, the company has been using online marketing analytics for three years to help its marketing group fine-tune the corporate Web site so visitors move easily along each step of the process-from indecision to action.

"Unlike most insurance companies, we have a direct-to-consumer model," says Peter Brine, Internet marketing manager at 21st Century, the seventh-largest personal auto insurance writer in California. "So the opportunity you get to speak to the customer online and drive immediate customer action-either to get a quote or to bind a policy-made sense with our business model."

Shortly after the carrier decided in 2000 to make online marketing and sales a strategic focus, it decided to implement online marketing analytics to assist that effort.

"We looked at a number of different options-from the very basic WebTrends type of data (from NetIQ Corp., San Jose, Calif.) to the more sophisticated log analysis to event-driven tracking," Brine says.

Made the most sense

After experimenting with all three options, 21st Century decided to use an event-driven tracking service-called HitBox (now HBX)-from WebSideStory Inc., a San Diego-based provider of outsourced Web analytics.

"HitBox intelligence paints a precise picture of how visitors are navigating through our site," Brine notes. "The service helps us better understand how to convert more customers from getting a free quote to buying a policy that is just right for them."

21st Century's implementation of the tracking service began by setting up three accounts with WebSideStory for key pages on the carrier's site-one for new business, one for current customers, and one for claims.

WebSideStory "gave us three tags (snippets of HTML code), and we pasted those tags on the footer of the key pages we're tracking, and that was it," Brine explains.

Once tagged, those Web pages communicate with WebSideStory's network every time they are viewed by a visitor. WebSideStory collects the data in real-time and makes it available on demand to 21st Century via the Web.

Event-driven tracking made the most sense to 21st Century-compared with the other Web analytics options that are available, Brine says.

"It's not as susceptible to changes in URL names or site organization that constantly plagues the log analysis solutions," he says. "And it's much easier to implement a change. If we want to track some other activity, it's just a matter of putting another tag on a page."

Specifically, the HitBox service reveals how visitors move through a series of steps or pages on a site. It also shows which forms and fields are causing visitors to abandon the process-and whether or not marketing campaigns are driving significant traffic to the site.

Although 21st Century currently is selling only auto policies online in California and Arizona, HitBox analytics also can help a company that sells multiple products online to see which products have the best conversion rates.

"If you look at the Web site metrics we have internally (without HitBox), I know how many quotes we generate per day and how many bound policies we generate," Brine explains. "But I have no idea what happens in between those steps."

Using HitBox's funnel analysis, however, Brine's group creates reports and monitors the performance of each step in 21st Century's online quoting and binding process.

Both the quoting and the binding process consist of three to four pages each, says Brine. "So, if I'm looking for process improvement, I can look at the pages with the highest loss rate, and say, for example, 'Okay, I have to really focus on improving our quote-start page because that's where we're losing the most people.'"

When viewing its entire site as a "funnel," 21st Century's online marketing team also observes entry-point conversion rates and abandonment at other transition steps, such as the home-page to quote-start conversion rate, and the landing-page to quote-start conversion rate, for instance.

Trends over time

In addition to getting a bird's eye view of site conversion patterns, 21st Century's Internet marketing group also uses HitBox analytics to watch site traffic trends as they develop over time. This enables the team to better evaluate the effectiveness of its advertising and marketing campaigns, according to Brine.

"As our media buy shifts and evolves, we're able to see how different sites we advertise on, and different messages we use, in aggregate, drive Web site behavior," he says.

"We can watch the abandonment rate on our quote-start page rise and fall. We can watch the conversion rate from quote to start-a-purchase shift. And we'd be blind to these factors if we didn't have the funnel analysis that HitBox provides."

Having used the service for more than two years, 21st Century has made many modifications to its Web site on a continual basis, based on the tracking information it receives.

"When we first launched, we had a site that mirrored our call center quoting process," says Brine. "We had that running for several months, until we looked at our online conversion rates and saw they were nowhere near where we wanted them to be-or where the call center conversion rates were.

"After scratching our heads, we said, 'Maybe we have to take a more customer-focused view instead of an internally focused view of the online process.'"

As a result, the company rebuilt the front-end of the Web site, making it much simpler to get a quote and reducing the number of pages visitors had to go through.

"We didn't really change the questions we ask, because we have to have certain information to underwrite a policy," Brine notes. But the team decided to ask for a person's vehicle ID number in the binding process-rather than in the quoting process-because people were stumbling on that question when they were getting a quote.

Similarly, the marketing group decided to ask visitors for their vehicle information before soliciting personal information online.

"People are more comfortable giving us vehicle information than personal information," Brine says. "Not that they won't give it to us, but if you come out of the gate asking for their Social Security number, for example, people get a little gun shy."

Most important steps

The 21st Century online marketing team also spends a lot of time making the quote page friendlier and less intimidating, says Brine. "Insurance isn't the easiest product in the world to explain." It's difficult enough to describe over the phone, he says. "But it's even more difficult to explain a policy on a computer screen-where a person isn't there to answer questions."

Using HitBox, the team has learned to pay particular attention to transition steps on the site, where it's crucial to thank visitors, provide them with a compelling offer and call them to take action.

"HitBox helped us understand that the most important steps-the places where we have the most to lose or gain-are the transitions steps," says Brine.

For example, visitors tend to drop out of the online quoting process when they move from providing information about their car to providing information about themselves. Likewise, abandonment rates increase when visitors move from quoting to actually binding a policy online.

"Those are the places where we need to entice people to take the next step, and we wouldn't know that if it weren't for this type of tracking HitBox provides," he says.

Although he declines to share actual site traffic data or conversion rates, Brine says the company has seen a steady increase in its conversion rate since it began using online analytics-a conversion rate that is the same or better than any of its competitors online, he says.

"It's been really exciting to see how customers are becoming more and more comfortable-not just doing research and getting a quote-but buying insurance online. The majority of that improvement is due to the user interface changes we've made based on the tracking and performance metrics we've gotten."

21st Century prefers to sell policies online because it reduces customer acquisition costs, says Brine. "It's a lot less expensive to have the user walk through the quote and bind process themselves than to have a human being on the other end of the phone doing that," he notes.

Furthermore, the carrier has aggressive growth and profitability goals. Its long-term strategy is to consistently produce a 96% GAAP combined ratio or better and at least 15% annual growth in direct written premiums.

"As we grow, it's much more scalable for us to promote self-service vs. having to add a certain number of people for every percentage we grow the company," Brine says. "So it's critical for us to understand where people are running into problems, where they are falling off in the process-to make sure we have the most efficient tool we can have."

21st Century is also using the Internet to attract more customers from the Latino market. In 2002, the carrier rolled out a Spanish-language Web site, and launched quote and buy functionality on that site early last year. Adding three more accounts to its HitBox service for the Spanish site, the carrier is tracking traffic on that site as well.

"The Latino market is an important one for the company, especially in California," says Brine. "It's one of our strategies to do the best job of any insurance company to cater to that audience. And our Web site is one of the tenets we use to do that."

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