If you read some popular marketing blogs and publications today, you would think that outbound or push marketing models are close to being dead. Telephone in particular has been on death row for a long time. Digital inbound (content, social media, SEO et al) is the new kid on the block.
There is no doubt that outbound marketing methods are under pressure. Privacy laws, do not call lists and increasing cynicism make telephone an increasingly difficult and expensive as a pure ‘push’ tactic. Direct mail still suffers from wastage and is expensive. Television advertising is becoming less effective in some jurisdictions due to live pause and the ability for people to skip advertising. Growth using these channels is becoming tougher.
That's only half the picture. Yes traditional ‘push’ methods such as telephone or direct mail are under siege from a connected society. But the issue is not clear cut. Cultural acceptability to specific marketing methods, local regulatory frameworks, products and channel use all differ significantly across Asia Pacific countries. Yet even taking this into account, what we are seeing across the board is a shift in how we use traditional outbound calling, rather than a dismantling of the model completely.
Take Japan for example. Today, just over half (56%) of our sales come from traditional direct marketing methods (telephone and mail). By 2018, we predict sales from traditional methods will drop by around 30% (to 39%). Taking up the slack will be digital. In Indonesia, the change will be even more dramatic. Today, traditional outbound (telephone and mail) accounts for 66%. We predict this will decrease to 10%.
The big change is not that telephone has disappeared. On the contrary, telephone will still play a vital role later in the purchase path. But it's still there, despite many marketers writing draft obituaries in preparation for its demise.
To most people, life insurance is not something people think about everyday. Consideration is usually triggered by a life event or a change in circumstances. Products are bought infrequently and for most customers, products are considered complex compared to other purchases. Newer channels such as online are perfect for potential customers researching products. Sites that aggregate products and prices have given the consumer the upper hand. Yet while it has made customers savvier, it is not so great for closing the transaction, especially for products such as life insurance.
What is important today is getting the mix right. In today’s omni-channel environment, it is the integration of online research and offline purchase that’s important. Human interaction is still the most powerful way to sell life insurance. Telephone still has the power to close the purchase.
High quality data is still and will continue to be the foundation for successfully distributing insurance products. Traditional financial data using predictive analysis and changes in circumstances are still the bread and butter for generating leads. It's an ongoing and exhaustive process, but it's the foundation for effective and value driven marketing. What is changing today though, is we now have access to a myriad of sources and making sense of it and using it intelligently is now becoming a major challenge for marketers.
Today, you can now get rich, deep customer data through social channels. Changes in circumstances and life events are often talked about in social media. How you integrate social intelligence into existing data streams and distribution models can be a challenge and will dictate how successful you are in the future. In our next update, we will talk about how the rise of social intelligence and its usefulness for the insurance sector.