3 Components of a Digital Insurance Business Plan

The most successful business cases start with the key metrics enabling managers to quantify the impact of seemingly different benefits.

Customer Centricity. Big Data. Digital. It is not possible to spend time with insurance marketers and avoid these three terms. They are embraced by both our revolutionaries and our establishment. They are accepted truths; part of the "good fight." We all think we are leveraging "big data" to get closer to customers, using digital as the ultimate channel to act on the insights it makes possible.

But if this is our consensus, it is only holding together at the surface. For most, right beneath the surface lies tremendous confusion: different levels of understanding within leadership teams, competing internal visions, and the now fossilizing remnants of earlier attempts to act on a customer-centric business strategy. Think, for example, of all the attempts over the last decade to create breakthrough distribution models, negotiate channel conflict, and improve satisfaction scores. Most have little to show for those efforts.

And yet, there are bright spots. Despite the challenges, a few key players are blending the lessons of the past with new, emerging capabilities. These teams are doing three things right. First, they are establishing their vision with solid, ROI-driven business plans and clearly defined target customer segments. Second, they are taking advantage of addressable technology to deliver relevant experiences, in real time and at scale, to specific market segments. Finally, they are optimizing their digital acquisition program, transforming it from broad reach media into a highly-targeted and personalized media approach, integrated with the rest of their portfolio.

Getting Started: Building the Business Plan

Establish a business case with proof points

The most successful business cases start with an understanding of organizational 'currencies' - the key metrics enabling managers to quantify the impact of seemingly different benefits. For example, should I spend my next dollar on improving acquisition volume, customer service, costs, or retention? In the insurance industry, a common currency is a truncated lifetime value (LTV) – for example five- or nine-year LTV. Currencies should be non-controversial, with consistent buy-in across the organization, even if it leaves some benefits (like outer-year LTV) unmeasured.

Business case assumptions and forecasts should be testable and held accountable by in-market tests; even if they were originally supported by historic data. This is critical because projects of substance require financial resources, and carry with them the significant opportunity cost of the marketing team's time. And nothing seems to galvanize enthusiasm and organizational buy-in like a market-tested and validated plan. A good example of a business case test: once you have media efficiency improvements in place, put two different media portfolios in market and compare.

[Merkle studies how top insurers invest in customers]

Ground your thinking in customer segments

Emerging players have found that focusing on customer segmentation in the early stages provides a critical foundation to address multiple issues: First, the unique motivations and behaviors of customer segments comprise the underpinning rationale for organizational change. Secondly, clear research and data-informed segmentations enable marketers to frame business plans in terms of future-state customer experiences. This way of planning is powerful and provides an organizational tool that enlists support and anchors a project's direction over long timeframes. Finally, without a segment focus, it's easy to overestimate an initiative's value by applying benefits to the entire marketing universe and not a more realistic, constrained population.

Thoughtfully design your marketing team

We see emerging insurance marketing leaders beginning to focus on organizational design at the onset of marketing programs. Interestingly, they are honing in on a couple of roles that feel new--or at least more mature--than parallels drawn with the recent past:

Segment executive: Straddles strategy, operations, product, and research, serving as a compliment/counter-balance to influential media, channel, and product owners.

Analytics executive: Bridges the world of data, technology, and statistics with media planning and portfolio management. One example of how this role is maturing is that analytics executives often own measurement and attribution of marketing efforts and resulting adjustment of marketing budgets. They also understand and may drive the rules around identity – declaring when an individual is related to a household or policy and what the life stage and value may be. In some instances, CMOs are organizing so that media and channels report into the analytics executive.

Digital Platform Marketer: Owns digital marketing in a broad sense. Tightly partnered with the analytics executive, they understand advertising technology and the emerging digital platforms. Together, this knowledge enables the Platform Marketer to deploy first-party data (identity, value) alongside third-party data to target segments across touchpoints. The Platform Marketer often sets marketing and site strategy and is an increasingly critical asset to the CMO.

We'll continue this series over the next two months with articles on harnessing addressibility and digital performance marketing.

About the author: Dan Bernard is VP of the insurance & wealth management practice at digital marketing agency Merkle.