Social media is not like other communications methods, and it's not particularly effective as a customer-acquisition strategy, explained Matt Josefowicz, a principal at Novarica, at the Insurance CIO Summit in Atlanta.
“Social media is not direct mail. You cannot measure social media based on a response rate or click-through rate,” he said.
Social norms make it incumbent upon recipients to somehow respond to messages, through “the inbox effect;” however, social media changes the nature of interactions by relieving the recipient of responsibility of responding, he said.
“The biggest impact for social media in insurance is between parties that have an existing relationship,” he said, such as between an underwriter and an agent, an agent and their customer, or direct insurers and customers. While it’s a deepening relationship and management tool, Josefowicz again pointed out that it's not necessarily a customer-acquisition tool.
“I don’t think social media is about customer acquisition any more than e-mail was,” Josefowicz said. “There is plenty of spam e-mail out there and somebody is clicking on those or they would stop. But it’s an indispensable communications tool. Social media has similar properties.”
For example, it would be prohibitively annoying to send an e-mail to all of an insurers’ agents every time there was a product change or new program, he said, as only 5 or 10 percent of them may be interested at that time.
However, a post on LinkedIn, or via Twitter or Facebook, is available immediately and those agents for whom the message is important or timely can respond.
“The unique factor is that, if you are not interested in it, none of your time was wasted,” Josefowicz says. “You can’t send an e-mail to people about something they might be interested in, because 9 times out of 10 they are not, and you’ve created an annoyance,” he says. “Social medial, by removing the inbox factor and the moral obligation to respond has made it a lower cost to do that kind of broadcast.”
The value for insurers, he says, is that they now can leverage social media to stay in constant contact with distributors, who can use it to stay in active contact with policy holders and prospects, while lowering the level of annoyance.
