Leap of Faith: Changing the Culture in Insurance Marketing to Reflect a Data Analytics Approach

It’s one thing to talk about creating a marketing analytics foundation and turning data into insights, another to use those insights to make business decisions. But doing so is potentially a game changer.

[In the third article of this four-part series, Cognizant’s Michael Kim and Agil Francis discuss how marketing analytics can help increase the demand for differentiated products and services: Using Marketing Analytics to Pursue Niche Insurance Markets]

Insurance and other industries are starting to understand the role of Big Data analytics in marketing. A more information-driven approach certainly seems to be the ticket for reaching the right customers. However, marketing analytics -- the application of data and business intelligence to help target advertising platforms and make marketing spend more effective and efficient -- is still a young concept with personal lines insurers, and their cultures are not yet predisposed to rely on data for investment decisions.

Right now, marketing divisions don’t invest a lot of time and energy into collecting the right data and trying to make sense of it. The current model is to work with anecdotal information, and if it agrees with their intuition, they accept it. If not, they reject it and push forward nevertheless. So from the outset, there’s a mindset to overcome in transitioning to a data-driven approach, from reliance on intuition, however smart. In this new environment, intuition is replaced by a rational, albeit more “dry,” approach that relies on analysis and acting on what the data says. Now, for the first time, marketers have a data set against which to measure their return on investment.

Getting Started With a Data Mindset: Three Preliminary Challenges

While data may be readily available, the high volume of it can be overwhelming. Let’s face it: It’s a lot of work to filter through masses of it, deciding what’s useful and what’s not. It takes time and a certain mindset getting used to any new approach. In fact, it takes an investment in a research mentality of the number-crunching variety, which can be quite contrary to the creative, more intuitive approach. So the first challenge is for the marketing division to take a leap of faith and put some muscle into this process.

There’s a lot of data out there. Every time someone uses the web, there’s data captured, but most of that data is not useful. You have to find the relevant pieces and connect them to figure out what information or insights can come out of that data. This second step is also a big challenge for insurers. It’s essential to have a framework for this search-and-connect phase -- knowing what questions to ask, what metrics would be the most useful to measure the key performance indicators of effective and efficient marketing spend.

The third step, equally challenging, is to take the insights gleaned from the data and actually change the way you make decisions, based on what the data says, not what your intuition tells you. This is not going to be an easy transition. It is very hard to suddenly ask people to trust data, when they have previously used several other criteria. It’s like asking them to switch off the right side of their brain. It is important to note, however, that while marketing is part science, part art, there will be a lot more science on which to base decisions that ultimately will better empower the more intuitive side of the marketer.

What Will Change by Integrating a Marketing Analytics Function?

We have previously laid out the difficulties of bringing the marketing department in line with the IT mindset. Admittedly, effecting change at this radical level is a bit like installing a new organ into a body. You have to know not only what you’re putting in, but what it does and what existing systems you need to link it to. And after all that, there’s still a chance that the body will reject the transplant.

So what are you implanting into the marketing division? First, people -- certain types of people with certain types of skills that didn’t formerly fit with the marketing profile -- data analytics people. Then you are introducing data, lots of it, enough to filter out usable and actionable information based on your key performance indicators. And finally, you are bringing in the technology-based tools to use with this data -- database software, screens, programs -- “net new” things that didn’t exist in the old marketing organization.

The linkages will be widespread too. Just about everyone, top to bottom, from the CMOs to their key lieutenants, then to the people below them, will be using the marketing analytics framework. They will all be looking for specific metrics and measurements that fit their needs. The CMO might use data to determine how smartly marketing dollars can be used and point to the ROI on those dollars. At a lower tier, an ad manager might use data to assess the value and efficiency of media placements. An integrated analytics base can begin to change the internal culture of insurers in such a way that everyone, from product designers to marketers to IT to management, is engaged to think more creatively to improve the entire insurance product and service offering.

Changing the Culture Inside Out

To return to one of our earlier hypotheses: Currently, P&C personal lines carriers are not getting reasonable returns on their huge marketing expenditures. What marketing analytics does is provide the opportunity to make changes and redirect marketing spend in a way that’s supported by what the data suggests. Hopefully, this will reduce ineffective marketing spend and redirect that budget to more productive places.

The required cultural change starts with getting marketers to embrace the marketing analytics function, to trust the data. When you shake out these volumes of data, if you have taken this leap of faith, you will come up with some golden insights. But while many people talk about turning data into insights, the harder part is to act on it -- to put your company on the line -- and use those insights to make business decisions. That is an even bigger leap of faith. It will mean getting data analytics to the right decision-maker at the right time, which requires a new way of working. Collecting and filtering data and working with it to determine current issues, predict future needs, and see what has succeeded or failed in the past will allow companies to come up with more deliberate, focused solutions -- solutions that have a basis in fact, not in intuition or tradition. What marketing analytics can give is the ability to make smarter decisions.

Michael Kim is Vice-President, Insurance Consulting, and Agil Francis is Senior Manager, Insurance Consulting, at Cognizant.