Riding the Whirlwind

Strategic Interactive Marketing for the Insurance Industry

Key Points:

Relationship Marketing is still an objective.....

4.2 Relationship Marketing

4.2.1 Relationship Marketing (RM) has for some years been has been the Nirvana for insurers but it is only being realised in part.

4.2.2 The benefit of RM is that it develops:

• a high degree of trust.
• a greater awareness and interest in a company and its products.
• a propensity for the customer to choose rather than be sold to.
• a virtuous circle leading to additional sales at a lower sales cost.

4.2.3 In theory, a relationship should prove to be a higher attractor than price. This is especially so if the relationship allows the consumer to experience added value, such as good after care service.

.... but smarter and more fickle consumers, and diverse lifestyles, will make that objective more difficult to achieve....

- No Illusions -

4.2.4 Interviewees are under no illusions as to the difficulty of developing RM:

• customers are getting more knowledgeable and consequently smarter and more skilful in shopping around for the best deal; they expect excellent service as standard rather than as a bonus.
• shopping around undermines marketing techniques such as lost leaders.
• targeting customers with the right product at the right time is difficult:
• marketing models such as the Family Life Cycle are becoming less relevant as lifestyles fragment.
• much existing data is hard transaction data that is fragmented across many product based systems.

Those with strong brands feel in the most advantageous position. They continue to make significant investments in Relationship Marketing.

- Consolidating Customer Data -

• consolidating this data into a customer database is proving more difficult than expected.
• the added value of overlaying this core data with bought-in demographic data is declining, as lifestyles became more varied.
• the frequent use of mail-shots and the rise in outbound telesales is increasingly irritating customers..

4.2.5 Never-the-less, interviewees seem to be investing significant time and resources in RM, particularly the major players who see substantial strength in their brand.

4.2.6 However, the implicit trust in brands may be declining, especially with C2s who have a greater propensity to rely on brands. A recent survey by the Henley Centre states that they have declined from 38% in the sixties to 23% in the mid nineties. Further, in recent years, some major insurance brands have suffered damaging press and the whole industry remains under close media scrutiny.

..... BT invests £30m on two call centres ... each one is the size of one & half football pitches ..... "this is all about building relationships" Alan Cunningham, BT's general manager .....

 

GTE Telesystems takes its call centre database displays visual icons on the screens of the customer service representatives. An algorithm rates each customer with one, two, or three calendar pages to indicate longevity, sticks of dynamite appear if there have been service problems, and moneybags show volume. Voila, an instant snapshot and a way to differentiate customers consistently, on-the-spot, for far better one-to-one marketing. From Don Peppers' 1:1 community discussions