SICK OF READING ABOUT SOCIAL MEDIA? TRUTHFULLY, WE'RE A LITTLE SICK OF WRITING about it. But we can't stop, because like all new technology platforms, it's a force to be reckoned with.
Thus, the question is whether the insurance industry has effectively used social media to market its products, to handle claims, or to better communicate with and engage its customers and employees. With a few possible exceptions, the answer is no.
An eye-opening report issued by the Customer Respect Group, an Ipswich, Mass.-based provider of qualitative and quantitative online analysis, notes that using social media (such as Facebook) for "fan" recruitment is critical to developing new business via "recommender" networks, and comparing fan count has become a key part of social media bragging rights in our industry.
As those insurers choosing to compete in this new medium battle forward, they face other challenges. In their haste to compete, some are entering social media networks "just to be there." Once there, insurers need to elicit conversations that will engage fans, because engaged fans, says the Customer Respect Group, will more likely to return to the page, and provide the first level of referral as their network recognizes their participation. That said, new conversations started by insurers currently average only about 19 per month, the firm notes.
Yet, starting more conversations does not always correlate to fan growth. In fact, it can have the opposite effect-a supporter can turn into a detractor, an unhappy policyholder who now uses the communications platform that you created to tell your growing audience how dissatisfied they are. What's more, the open communications inherent in social media brings the issues of privacy, risk and control to the mix.
Other roadblocks to quick adoption revolve around the intricacies of the insurance distribution channel. This new platform is causing insurers that have typically relied on agents, brokers and other intermediaries to rethink their business models and integrated marketing efforts in the hopes of finding a balance between the distribution network and a direct-to-consumer approach. It begs the question: Who (or what) should maintain the customer relationship? If done incorrectly, this "rethink" has the potential to sever ties with those producers rather than bind them.
To some using social media technologies to improve the customer experience (USAA is an example), benefits are already at hand. Savvy insurers want to use social media monitoring tools to identify and capture online "conversation" data to support analytics and get a 360-view of the customer. However, the tools to do so are nascent, and that data doesn't necessarily integrate well with in-house data or CRM systems-yet.
In the big picture, done correctly, social media can be a true boon for insurers willing to climb in. Those that do need to exercise due diligence and caution, and apply solid risk management principles to the effort.
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Corrected March 31, 2011 at 2:58PM: yes