Answering the Billion Dollar Question: Optimizing Insurance Marketing SpendAugust 16th, 2017 | Posted by in Insurance
For some insurers, marketing is a billion dollar question. Today, many insurers may dedicate a large chunk of that budget to mass media spend, such as radio, TV, print and billboard campaigns. But as marketing strategies increasingly focus on more personalized channels, such as digital and direct mail, leading insurers are refining their outreach strategies across platforms, and re-allocating budget accordingly.
As insurance executives shift their marketing priorities, it will be critical that they understand the true impact of their personalized outreach. From there, they can develop a better understanding of how to focus their marketing spend, and smartly distribute budget across personalized outreach, mass media marketing efforts, and more for maximum impact. Further, with any form of personalized outreach, there are many different combinations of levers to pull, including communication platform, messaging, cadence, and creative. So how can decision-makers develop an understanding of which campaign variation will be most effective with which policyholders?
Leading insurers are finding that the best way to refine their marketing strategies is through business experimentation, which can help ensure they reach the right policyholders with the right communications, at the right times. This test vs. control approach entails testing marketing programs with a subset of policyholders, then comparing their behavior against that of a baseline group of similar policyholders that did not receive the program.
Consider an insurer that was re-evaluating its marketing spend and wanted to refine a campaign outlining savings benefits – specifically, to determine whether a postcard or a letter mailer would generate the greatest positive response. By testing the different mailers with various policyholder segments, they could pinpoint which type of mailer would be most effective, and with whom.
Through business experimentation, insurers can determine the impact of direct mail campaigns on metrics such as new policies resulting from the outreach. They can also identify the profile of the policyholders that respond best. For example, certain mailers may generate significant new business, but ultimately attract policyholders that are not high-value.
Further, insurers can look beyond mailers alone to test the impact of different follow-up outreach strategies, such as calls or emails to policyholders who received direct mail campaigns. Based on these findings, insurers can refine their approach, reducing costs by discontinuing less effective outreach methods for these policyholders, while simultaneously freeing them up to receive other lines of communication that may be more impactful.
As insurers strive to optimize their marketing budgets across channels ranging from direct mail and digital to mass media channels, leveraging business experimentation to understand the true impact of different campaign variations will help them make more informed decisions and confidently allocate marketing dollars.
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