Factors affecting insurance buying behavior

By Marla Boring

Premier Advantage Marketing


Cultural, social and personal factors affect and influence consumer behavior. Knowing more about your clients will help you increase your sales in insurance and any other industry you may be selling in.

Direct mail marketing messages need to be crafted with these factors in mind to create the most effective direct marketing campaign.

Cultural factors can influence how customers understand the importance of insurance. Understanding demographic niches improves your marketing and sales techniques.

For instance, Hispanic Americans are attractive to life insurance marketers because income levels are rising; however, they are not yet big consumers of financial services.

Reaching out to individuals with cultural differences requires an in-depth understanding of the culture or the marketing becomes useless. For instance, translating an advertisement in Spanish or using Hispanic actors for advertising is not enough to reach the Hispanic market.

Issues of price, security and reputation are as important to Hispanics as well as the mainstream market, however family and children are also important. Since a great number of Hispanic consumers come to the United States with little to nothing, it is a good strategy to approach them by telling them, “protect what you have earned.”

Social class is another cultural factor affecting consumer behavior and their insurance purchases. Differing social classes show distinct product and brand differences in many areas. No matter who your audience is, it is key that consumers do not feel your direct marketing ad is speaking to “someone else.”

In addition to cultural factors, social factors also affect consumer insurance buying behavior. Social circles, family and the varying roles a consumer plays also affect how and when they will purchase insurance. People are constantly exposed to new behaviors and lifestyle choices.

The social circle’s attitudes as well as self-concept play a role in product and brand choices. For instance, if a person belongs to a motorcycle club, the entire club will likely have the same insurance. If the person belongs to a boat club, the majority of the boat club will likely own the same insurance.

Perhaps one person had an exceptionally great experience either purchasing insurance or filing a claim. That experience can greatly influence the entirety of the group.

Direct marketing to a model similar to your current clientele increases your chances of reaching the ideal prospects. Your direct marketing agency can create those data models. These models, in conjunction with integrating credit score, can increase the lift of the marketing campaign.

Family is yet another aspect of social factors influencing consumer behavior. Marketers need to remember that men and women respond differently to marketing messages. This can be especially true if you are marketing life insurance.

In recent years, the number of women who are head of the household has increased. These women purchase life insurance to ensure the funds for childcare and household maintenance are there in the event of their death.

The varying roles a consumer plays carry a set of criteria they will use to influence their buying behavior. People choose products and brands based on their role or status. For instance, consumers of a certain status will buy more long term care insurance than their less affluent counterparts. They can’t imagine losing their status even in a long term care facility.

Personal factors such as age, life-cycle stage, occupation, economic circumstance, personality type and core values all influence consumer behavior. Product choice can be greatly influenced by a consumer’s economic circumstances. If their spendable income is low, then they may need your insurance product to be tailored to fit their available income.

Companies who can re-design, reposition or alter their products to offer more value to consumers will in the end achieve greater sales.

Direct marketing to people in the midst of a lifestyle change can influence the timing of their next purchase. If the consumer is purchasing a home, a car, getting married or expecting a child, it can be a key time to market to these individuals.

This may be the time that alternate products can also capture their attention. Look at the tail of what else valuable you can offer the consumer and be the expert when they are ready, able and willing to purchase.