Riding the Whirlwind

Strategic Interactive Marketing for the Insurance Industry

Key Points:

Companies are using postal mail in sophisticated ways. It will continue to be an important part of the communications mix.

Fax, Pagers and PDAs have their roles where time is critical. CD-ROMs can deliver volume information.

2.3 Delivery Mediums

 Postal Mail

2..3.1 Using both hard and soft data, customer communication is becoming extremely targeted and the volume of printed matter sent to customers is increasing. In the future, knowledge based systems will record and co-ordinate all customer correspondence.

Fax

2.3.2 Within some customer segments, the fax machine is as common as the answer machine and those customers feel happier using the fax to send their credit card information. Most PCs now come with fax software and new services are exploiting this situation. It is currently the best electronic method of sending brochures and other illustrated documents.

CD-ROM

2.3.3 Most PCs now come with CD-ROM drives. They are ideal for delivering volume data, including video. Where necessary they can be supplemented by up-to-date information delivered via the Internet. They are best for use in volume markets due to the high cost of authorship.

Larger financial service providers are the most committed to kiosks but some interviewees thought kiosks have limited applicability.

Liberalisation and growth of telecom- munications are being exploited by companies. They can adopt new business models to serve global and local customers around the clock.

Introducing telephone based selling and services is a top priority.

Kiosks

2.3.4 Multimedia kiosks are being placed in many bank branches and in public places where they can reach new customers. They provide interactive services in a novel, easy to use way that has wide appeal. They look to be the next wave of consumer operated devices. The large financial service providers are the most committed to kiosks but some interviewees thought kiosks have limited applicability

Pagers and PDAs

- Ubiquitous Pagers and PDAs -

2..3.5 These devices come in a wide variety of forms and prices from under £100 upwards with the newer PDAs running a mini form of Windows software. New services are using pagers and PDAs, especially for time critical applications. They will prove popular when the cashless society takes off. These devices will become ubiquitous.

Telephones and Smartphones

2.3.6 Telecommunications networks and services are growing at a tremendous rate and companies are exploiting telecommunications in order to operate new business models. Global operators are in an ideal position to handle demand peaks and troughs, 24 hours per day, 7 days a week.

2.3.7 Interviewees are very positive about telephone based selling and services as many consumers had enthusiastically embraced this medium. But a move to telephone based processes is making significant demands on internal capabilities.

- Electronic Barriers -

2.3.8 In the future many personal and household appliances will be linked to the Internet. Consumers will use them to help manage their fragmented and complex lifestyles. Home PCs will manage all communications into a home with consumers erecting electronic barriers to block unwanted communications. To get through will require strong relationships.

Many interviewees are enthusiastic about Interactive-TV as cable and satellite expansion brings hundreds of new channels and 2-way interaction.

Web-TV is an easy to set-up and use consumer device that receives TV programmes and allows access to the Internet. Following its recent launch there was an enthusiastic reception in the US.

Interactive-TV

- Enthusiasm about Interactive-TV -

2.3.9 Many interviewees are enthusiastic about Interactive-TV as cable and satellite expansion brings hundreds of new channels with 2-way interaction. Home shopping is likely to be a popular service. A number of these companies have, or are participating in, the various trials but some initial disappointment is expressed.

2..3.10 As television shifts from broadcasting to narrow casting there is a need to target adverts at specific individual households but some viewers will pay a fee to view without adverts. Adverts and in-programme promotions will allow consumers to request more information and speak to an agent.

Web-TV

2.3.11 Web-TV is a consumer device that receives TV programmes and provides access to the Internet. There is no complicated set-up and browser technology makes for ease of use. Like I-TV, it will be possible for programme makers and advertisers to link their content with information on the Internet. There was an enthusiastic reception in the US following the recent launch of Web-TV.

E-mail is a universal and ubiquitous facility that is likely to become widely available through public kiosks, Smartphones, PDAs, etc..

Interviewees are already most concerned with their companies' poor handling of customers' e-mails.

The World Wide Web has caught the imagination of many people. Never-the-less, many were sceptical as to consumer take-up in the mass market.

The attractions for businesses include the professional standing of many of the users, and the extremely low transaction costs.

Many interviewees found their companies' Web offering disappointing.

Those distributing via brokers were sensitive to communicating direct to customers but never-the-less, they thought it important to understand this new distribution medium.

Serious pilots are costing in the order of £0.25m to £0.5m with most seeing their pilots as a learning exercise.

Internet E-Mail

- Concerns Over Customer's E-mail -

2.3.12 E-mail is a universal and ubiquitous facility in daily use by hundreds of millions of people. It is a simple, very low cost and fast service, although it does have its problems. Developments with e-mail software will allow users automatically to review, sort, re-route and even delete e-mail from unwanted sources. E-mail is likely to be widely available through public kiosks, Smartphones, PDAs, etc.. Telesales units will need increasingly to handle large numbers of e-mail requests but interviewees are already most concerned with the poor handling of customers' e-mails.

Internet - World Wide Web (WWW)

2.3.13 The World Wide Web (WWW) has caught the imagination of many people. The current profile of a typical user is a well-educated professional with above average income. Booze Allen and Hamilton have shown the extremely low cost of Internet-based banking. The Internet does have some short term problems but all these will be overcome.

- Home Banking to Lead -

2.3.14 As the Internet is interactive, it is able to support many new and innovative value added services. It allows companies to reach new markets and to introduce new product and service paradigms. Interviewees thought home banking will be the lead financial application. Some thought that private closed user groups based on Internet technology could usefully serve affinity groups at their work place. Never-the-less, many were sceptical as to consumer take-up in the mass market.

- Boring Web Sites -

2.3.15 Many interviewees found their companies' offering disappointing. They were out-of-date, boring, untargeted, too technology driven, lacked marketing information, and were too stand-alone.

2.3.16 Those distributing via brokers were sensitive to communicating direct to customers but never-the-less, they thought it important to understand this new distribution medium.

2.3.17 Serious pilots are costing in the order of £0.25m to £0.5m with most seeing their pilots as a learning exercise. Some are dabbling in case the Internet gets big. Unfortunately, customers see the insurer's sites as full service offerings and like e-mail, insurers are poorly placed to handle Internet commerce.

2.3.18 Proprietary Service Providers like CompuServe offer comprehensive services to both consumers and suppliers and are an alternative to an in-house provision. Some banks are using their own private networks because they feel they are more secure.

Telephone based services are seen as the growth area in the short term,
followed by kiosk systems and Interactive TV.

Insurance companies are ill placed to handle these new mediums but most see them as complementary to the way they do business.

Conclusions re these new mediums

2.3.19 The consensus on the order of preference is:

• Telephone based services as the growth area.
• Kiosks as ideal for the mass market.
• Interactive TV looks promising as many homes are expected to acquire it.
• Web-TV may attract casual Internet users.
• Postal mailings will be more integrated with the other delivery mediums.
• Fax machines, pagers, PDAs etc. could be useful in niche markets.
• E-mail may well become ubiquitous.
• Most interviewees were cautious about the Internet.

- Severe Pressures -

2.3.20 Insurance companies are ill placed to handle these new mediums should they take-off. Supporting the new mediums will place severe pressures on internal capabilities. Most see the new mediums as complementary, not as a fundamental new way of doing business. Larger companies will offer customers a choice of mediums from which customers will choose according to their personal preferences, equipment and the stage in the buying cycle.

2.3.21 Major content providers may well dominate any of these mediums. It is this that will determine which medium to use.