A "Back to the Future" look at insurance marketing data analytics

By Mark Chai

NexusHQ


One of my favorite movies while growing up in the 1980s was “Back to Future.” Marty McFly's and Doc Brown's adventures traveling in time provided a timeless tale of how small changes could have a substantial impact on one’s future. In one of my favorite moments, Marty purchases a future copy of a sports almanac, which provides a treasure of knowledge to any time-traveling sports fanatic. As I look into the current state of data analytics in insurance marketing, I wonder, what would the future tell us about today?

Current state of data analytics

About 90 percent of advisors use a database to help manage their clients’ data, and most IMOs are using multiple databases to manage their advisors’ licenses, contracts, policies and revenue. Through these databases, our industry has been able to track clients’ needs, seminars, communication, licenses, contracts, training, policies and premiums all in one central location. Furthermore, with the growth of mobile technology, advisors can view and manage data on their smartphones and tablets. The challenge, though, is translating all of this data into a new sale or replacement while measuring the effectiveness of your marketing campaigns and expenses.

Today's challenges and trends in data-driven marketing

To understand the challenges and trends of data analytics, consider the following question: Which of these advisors is more valuable to a marketing organization or carrier?
    Advisor A writes $3.5 million in annuities a year
    Advisor B writes $3 million in annuities a year
Based on this limited data, the answer is almost always Advisor A. However, when your database houses inaccurate or limited information, many decisions are merely assumptions which could lead to wasting valuable marketing resources. If you add in additional organized data, then your perception would change. Let's take a look:
    Advisor A:
    • writes $3.5 million in annuities a year
    • places 5 percent of opportunities
    • works with a premium that has decreased each month for the past 24 months
    • has moved all but one active writing contract with IMO
    Advisor B:
    • writes $3 million in annuities a year
    • places 95 percent of available opportunities
    • works with a premium that has increased each month over the past 24 months
    • has consolidated all his/her contracts to one IMO
With more detailed data, most marketing organizations would invest their resources with Advisor B, whose premium, placement ratio and contracts all are trending up.
It takes a lot more effort to profile and organize your data, but it is a fundamental need for both the advisor and the IMO if they are trying to grow in this difficult rate environment. With much more detailed profiling, IMOs and advisors must transform their current systems of record keeping to systems of engagement.

Over the years, technology has depersonalized many relationships. With the advent of Google, Youtube, Twitter, Netflix, etc., we live in an "on-demand" society. With click rates of less than 1 percent, intrusive, mass email marketing hasn't proven to be the panacea that everyone envisioned. Just think about your personal inbox and how many unwanted emails you receive each day. Americans have become desensitized to many marketing messages.

As Seth Godin detailed best in “Permission Marketing,” his New York Times bestseller, "in order for marketing to be effective, it must be anticipated, personal and relevant.” As an IMO, how do you make your marketing anticipated, personal and relevant? The key is focusing on what an advisor and a marketing organization do best.

A growing number of marketing organizations have diversified their value propositions to include marketing services on behalf of their advisors. Advisors focus on what they do best — point of sale — while IMOs focus on what they do best — creative marketing. Through collaborative marketing, advisors spend more of their time in front of new and potential clients, while IMOs create more loyal advisors and can leverage their resources and expertise to help their advisors find and close more cases. The success of collaborative marketing relies on a trusted partnership between the advisor and IMO and can be executed by detailed profiling and a shared and connected database.
Through collaborative marketing, marketing organizations and advisors can focus on their unique abilities and leverage marketing resources to educate and insure more consumers. How do you best manage current clients as their needs change? Over time, there is bound to be attrition in our industry. Whether through retirement, over-regulation or a need for change, there will be advisors who eventually leave the business. The question is how to manage the enormous amount of client data that represents policies that may no longer be competitive?

Some progressive marketing organizations have identified these opportunities to track and manage leads, and an incredible opportunity to help amplify their "best" advisors’ and sub-agencies’ practices with these leads. The key for the IMO is reporting, tracking and analyzing the results of lead distribution, and this data can be measured when linking or connecting technology from the IMO with the advisor. The by-product is twofold:
    1. Advisors engaged and connected with their marketing organizations through technology will see a windfall of new leads.
    2. Advisors who are not technology-connected with their IMOs will miss out on these opportunities.
Imagine receiving that sports almanac in 2013 with the future scores of all games from 2013-2030. How valuable is that information? Now spend a minute thinking about the value if the data wasn’t organized, accurate or easy to find. What if some baseball scores had the score for the first three innings, but not the remaining six? What if some scores were written in Chinese while others were in Arabaic? Remember, small changes you make today can have a substantial impact on your future. Don’t waste the valuable information your sports alamanac could and should contain.

See also:
The problem with data-driven selling
Selling insurance: database prospecting
5 myths about FMOs debunked
The proven truths of quality IMOs: myths debunked ... debunked
Winter insurance marketing: increase your reach