A review of how various age groups spend their time reveals a unique combination of demographics that spell marketing potential for insurers across all lines of business.
The increase in time being spent, particularly by young adults, interacting online via social media channels, represents one of the greatest new business opportunities of all time. But for the insurance industry, it may represent one its greatest challenges.
Jennifer Overhulse, principal with St. Nick Media Services, spelled out the potential advantages and disadvantages of leveraging social media to insurers attending the IASA 2014 Educational Conference and Business Show earlier this month in Indianapolis.
The U.S. Census Bureau reports that more than 50 percent of the world’s population is under the age of 30, and one third of all young adults meet online, she noted. According to ComScore, online users in Canada appear to lead the pack, spending 45 hours per month online.
“E-mail is becoming irrelevant to them, so which channel is best to reach them?” she asked the group.
Of the most common social media sites, most young people prefer Twitter, which reports an average of 255 million global active users. Insurers that don’t believe that social media is important to young adults would benefit from learning this rather dated statistic from Digital Buzz Blog: In 2011, 48 percent of 18-34 year olds were checking Facebook when they woke up, even in the middle of the night.
LinkedIn claims that professionals over the age of 40 are most likely to use their site, and it’s the older set that enjoys Facebook now, Overhulse told the group.
That the trend toward social media use is changing the way insurers position and distribute their products is an understatement. And thanks to the proliferation of wireless devices and the connectivity inherent in the “Internet of Things,” there are several changes taking place in the insurance distribution channel as insurers recognize the competitive challenge social media is creating.
“For now, independent agents are still the largest distribution channel,” Overhulse told the group. “In five years, online sales may render independent agents obsolete.”
American Family, which boasts 3,500 independent contractor agents in 19 states, adopted a proactive distribution management approach with the development a successful agent engagement strategy that involved helping agents create social media pages and training them on social media communication at the local level.
Yet some carriers remain unconvinced that investments in the social media channel are necessary. The Public Relations Society of America reports that with the exception of retail, execs from most other vertical markets (including insurance) still consider social media “frivolous.”
“You need an executive champion to prioritize social medial in terms of focus and funding, because perception is reality,” noted Overhulse, who offered Old Spice as a “non-frivolous example” of how the power of social media can be tapped to improve image, brand and reach.
“Remember when Procter & Gamble’s Old Spice was the aftershave that Grandpa wore?” she asked the group. “Today, thanks to a marketing blitz that uses all primary social media channels including YouTube, Procter & Gamble has completely changed that perception by entertaining, educating and persuading a large number of younger consumers to consider Old Spice.”
There are a host of other advantages to social media adoption: market research, branding, product announcements, promotional/contests, customer service, tech support, predictive analytics and the extension of cogent discussion that can educate and inform.
“Consider collaboration platforms that foster more discussion on important topics,” said Overhulse. “Properly monitored, the comments posted on sites such as Insurance Networking News can represent a viable conversation that spurs further conversation.”
Although fewer in number than in the past few years, there are still other insurers that believe social media use represents a productivity issue, and block social media access by its employees.
“This can be a huge mistake,” noted IASA session co-presenter Ken Zieden-Weber, SVP and COO of XChange Benefits, LLC. “Those hung up on controlling and restricting access need to think differently and enlist the support of corporate counsel to create social media policies around usage.” Zieden-Weber suggested insurers begin this process by establishing guidelines and parameters on outreach, education and constant monitoring.
Overhulse agreed. “If you don’t have a social medial policy, your employees can talk about your company anyway they want to, which opens the door to negative comments.”
Meanwhile, time is of the essence for insurers hoping to capture some of the younger generation’s business. Instagram receives and posts 81 comments a second, and pictures posted there generate 575 “likes” per second, reports the Business Insider website.
“To insurers, there are dangers to NOT using social media,” noted Overhulse.
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