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08:00 AM
Rod Brooks, PEMCO
Rod Brooks, PEMCO

How Listening to Customers Helps Small Insurers Beat Big Ones

Though more than $4 billion is spent on auto insurance marketing, mostly by big players, tech can help smaller insurers stand out and build affinity.

In 2011, Advertising Age reported that more than $4 billion would be spent on advertising by the insurance industry's largest property and casualty companies. That's right: Four. Billion. Dollars. By comparison, the beer industry spent a paltry $1.25 billion on measured media during the same period. Clearly, there's little room for the small or regional insurance carrier to compete for share of voice when that kind of money is in play.

Unless, of course, it's not share of brand voice you're competing for.

While CMOs may drool at the prospect of controlling such ominous budgets, the true secret sauce to success resides in the voice of the customer. The most valuable message in the marketing tool kit isn't measured by reach and frequency and isn't delivered by powerful broadcast signals or cable connections. The most effective spokespeople aren't Geckos, Mayhem, or even Flo. Instead, the most important and effective messengers are those who share their everyday stories – our customers.

Unfortunately, many of us are too busy talking – shouting, really – to listen, learn, and leverage what our customers say. All we need to do is listen.

And the stories they tell are trusted.

It's true. As consumers, we talk about our experiences, the products we use, and the businesses we interact with. U.S. consumers have at least one discussion each day that mentions a brand. Just as we measure the cost of claims in the insurance industry, it's the frequency and severity of consumer conversations that will determine the financial impact on our brands.

Consumers remember their experiences and share their stories when talking with others who shop for what we sell. They have the right message, at right time, for the right people. Our customers hold the building blocks of great marketing in their hands – or more accurately, in their voices.

A 2012 A.C. Nielsen report entitled "Global Trust In Advertising and Brand Messages" cited fellow consumers as the most trusted source of advertising. Ninety-two percent of consumers around the world say they trust earned media, such as word-of-mouth or recommendations from friends and family, above all other forms of advertising – an increase of 18% since 2007. While person-to-person testimonials lead the way, online consumer reviews have become powerful trust brokers in their own right. A very meaningful 70% of global consumers now say they trust messages on these platforms, an increase of 15% in just four years.

[To learn more about how to integrate social applications into your wider communication platforms, register for Interop here and check out the “Integrating Social Applications with Communications Systems” session on October 3 in NYC.]

Of course, there are many ways for insurance carriers to listen to consumers. Actively monitoring sales and service calls and deploying quantitative and qualitative research techniques are long-standing methods that have served us well. What's different today is that the audience receiving consumer messages is no longer limited to those within our companies. Consumers' voices have grown dramatically and wield huge influence. It's time to harness that power. Not only will they willingly help you shape your product and service offerings, they'll tell their friends, neighbors, and communities – both online and offline – how well you listen, hear, respond and engage ... or not!

Next time, I'll share how listening and using online reviews and customer stories has helped PEMCO communicate openly in ways that meet and exceed their expectations.

About the author: Rod Brooks is VP and CMO of PEMCO, a regional P&C insurer in the Pacific Northwest.

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