Transcript Document

Bill Tyson
CEO
Strategic Marketing Plus, LLC
Monday, October 8th 2012
Part 1: Industry Overview
Part 2: Distribution Update and Sponsored
Programs
Break at 10:15 am to 10:30 am
Part 3: Best Practices: The Strategic
Marketing Plan
Part 4: Innovative Marketing and
Distribution Approaches in the USA
Social capital - “a sociological concept used to
refer to connections within and between social
networks.”
“Swiss Army Knife” - like features:
Advanced Search – because of the accuracy of profile information (if you
lie about anything your peers, colleagues will out you), it is more
powerful than Google search.
Groups – these community-of-interest-networks go beyond discussions
and job postings enabling relationship building around common
interests.
Information Sharing – through the use of “social objects” – newsworthy
items, not authored by you, that you can share rapidly with those you
know will find it relevant.
Paying it forward – meaning the obligation placed upon everyone in
LinkedIn to make introductions for and on behalf of your 1st level
connections.
Mapping your network – for the first time in history, you can actually
map most of your network. See http://inmaps.linkedinlabs.com.
Macro Trends Impacting Marketing and
Distribution
The rise of the China and India Middle Class
Aging Infrastructure
China militarization
Increasing demand for Commodities
Workforce training in emerging economies
Keeping the “Wealthy Healthy”
Soft Innovation – quality improvements with
existing products and services
Big breakthroughs – some unforeseen (“black
swans”) robots, nanotechnology, 3-D printing
Forever recession – lingering
unemployment…21st Century models are being
disrupted.
Total mistrust of institutions (OWS).
Un-retirement – 66% expect to work after
retirement.
Shift from Government/Employer to Worker
Obesity epidemic.
Self-service and foreign tech support backlash.
Life expectancy increasing - average will be 87
years by year 2029.
Ownership of Life Insurance way down.
Fatigue, Distribution, Technology and
Competitive pressures forcing business model
transformation.
Consumer behaviors that require new, relevant
marketing, sales and integrated distribution
approaches.
The blurring of the lines between insurance
products and services.
Legal and regulatory challenges - to protect the
consumer privacy and ensure equity through
minimum loss ratio requirements.
“The trends toward creative populism,
personalized measurements, interactivity, open ad
inventory platforms and greater consumer control
will generate more change over the next
5 years than the advertising industry has seen in
the last 50 years.”
Dr. Saul J. Berman, IBM Global Media Practice
Marketing fatigue – across products, channels
and traditional media.
Product fatigue – “meaningless differentiation”
Little R&D at carrier and TPA levels.
Product homogeneity is the norm.
Channel Fatigue – increased fragmentation – “a million
different niches”.
Direct mail/inserts ROMI is worsening:
Fatigue is across – lists, creative, formats and offers.
Better segmentation leads to smaller and smaller targets.
Material Costs are increasing due to energy costs
(affecting paper, delivery, ink, etc. and postage).
Postal delivery slower, less reliable.
Do not mail, “go green” movement. Sponsored direct
mail is in direct opposition to “Paperless movements” at
major financial institutions.
“The success of my role is far more about analytics and technology than it is about hanging out
with my ad agency, coming up with great creative campaigns. We must increase campaign
ROI.”
Rob Colwell, Executive Manager — Commercial and
Marketing, Qantas Frequent Flyer
John Hayes, CMO of American Express
Service Fatigue:
Best practices adopted over the years adds leads to
proliferation of sameness:
Key Performance Indicators, ROI and Lifetime Value
calculations enable “apples-to-apples” performance.
Technology and automation of workflows and processes.
New metric is the Net Promoter Score (NPS)
Rise of Enterprise Risk Management programs
to deal with common business risks
Traditional Associations are facing mounting
pressure to become more relevant.
Governmental Employee Unions – are facing
cost shifting of welfare programs and cutbacks
due to mounting deficits (Federal, State, Local)
Trade Associations – tough to sustain
membership when dues are optional.
Manufactured Associations – face increased
scrutiny and potential extinction.
Employers/Worksite programs – cost shifting – from
being providers (and subsidizers) to enablers of
insurance for their employee/consumers.
Financial Institutions – eliminating programs to avoid
additional litigation and regulatory challenges.
Approval process on new products takes years, not months.
Channel opportunities have been reduced or eliminated:
Outbound Telemarketing bans and elimination of statement inserts
to trans-promotional ones (like Amex page 2 & 3 ads).
Preference now goes to internal bank products.
Web sites are profit centers – highest money contributors win.
Card issuers – facing high degree of fatigue.
Leveraging social media for loyalty programs.
Mobile Commerce and Call Center platforms – emerging to
compete and fill void of financial institutions and/or use
insurance as a means to monetize traffic.
Bank Comparison of Mail 2010 vs. 2011
50,000,000
45,000,000
40,000,000
35,000,000
2010
30,000,000
2011
25,000,000
20,000,000
Bank
15,000,000
10,000,000
5,000,000
0
Wells Fargo
Bank of America
Citibank
U.S. Bank
Chase
% Change 2010 to 2011
Wells Fargo
-29%
Bank of America
-53%
Citibank
-70%
U.S. Bank
21%
Chase
-97%
Mobile
Access/Apps.
“Tap and Go”, M-commerce (NFC)
Mobile Financial Services – wave started by mobile
banking.
“Gamification” – great way to engage audiences
From SaaS to XaaS – “Everything as a Service”
aka Cloud Computing:
Cost advantages
BUT worries remain about Outages & Security
Big Data – struggling to make it actionable.
Cyber Disruptions – cybercrime, cyber-war and
Competition is intensifying
“Pay-as-you-go” models emerging - auto
New emerging competitors have these
attributes:
Cool Brand, No legacy
Technology-driven
First mover advantage
Partnerships and alliances
Customer experience leaders – exude passion and
comparative expertise.
Outsourcing is intensifying
In our business, there is a “Herd-like” regression
towards the mean
Great awareness of competitor positions and
moves particularly at publicly traded companies.
Pre-disposition to make adjustments to match
competitors in coverage and rates.
The more tightly contested the category, the
more clustered the competition:
The more hyper-vigilant companies are going to be
sensitive to the movements of those around them
The more poised they will be to respond in kind. (1)
(1) Youngme Moon, March 2010: Different, page 41, Kindle Edition, Random House, Inc.
Mobile/Portability is going to be a big
disrupter.
Service is going to be the linchpin of the
integrated channel experience.
Personalization and customization is necessary
to reinforce the customer relationship
Must have Real-time responses to data to
provide business advantage.
Flexibility that dynamically aligns with customer
use and behavior. Modular products and new,
more equitable pricing models (“pay-as-you
go/drive” auto insurance, etc.)
Forester Research, 2011
“Consumers are moving outside the purchasing
funnel—changing the way they research
and buy your products. If your marketing hasn’t
changed in response, it should.”
-McKinsey Quarterly, 2009 #3
Awareness
Familiarity
Consideration
Preference
25
Purchase
Re-purchase (Loyalty)
HBR: The Customer Decision Journey
26
Advocacy
Let’s take a look at a Life Insurance Customer
Experience Map.
Sample Life Insurance Customer Experience Map
2
1
Direct Mail/Web
Email
Mark receives a direct mail offer from Hawkeye
Family Life to buy guaranteed tem life insurance. The
cost seems affordable and he has considered buying
additional coverage for his growing family, beyond
the plan his employer provides. Mark visits the PURL
(personalized URL) that is referenced in the mail
piece, enters his email address, and fills out a quote
request.
Knowing that Mark linked into the PURL, but didn’t make
an initial purchase, Hawkeye Life sends Mark an email the
next day that points him to the coverage calculator to help
Mark determine the appropriate level of coverage based
on his needs. He goes online to further investigate his
options using the weblink to the calculator, and also
researches the cost of an additional policy for his wife,
Molly.
Online/WOM
3
Later that evening when online, Mark notices an ad for term insurance from Hawkeye Life. He
decides to check to see how rates compare, and when he googles “affordable term life”, he sees
Hawkeye near the top of the list. Mark clicks on a couple sites to check their rates, and as he surfs
the web, another Hawkeye message appears. He visits a few more sites with customer reviews
and see a lot of positive feedback.
4
5
TV/Online/Social
About a week later, Mark and Molly see a tv ad for a new car that she
is considering buying. Mark mentions that he saw some car buying tips
on the Hawkeye website. Molly goes onto the Hawkeye General
website to check out the car buying tips . While on the website, she
enrolls for the enewsletter that includes gas saving tips and other auto
related articles. And since their oldest child will be driving soon, they
join Hawkeye’s parents blog re: best ways to teach good driving skills
to your children
6
Direct Mail/Web/Phone
In his mailbox the next day, Mark finds a thank you note from
Hawkeye for clicking on the calculator, and offers him a 5%
discount if he signs up online. Mark decides to take advantage
of the offer and buys a $500k term life policy from Hawkeye.
During his purchase, a prompt to add a policy for his spouse at a
20% discount is offered. Mark decides to purchase a policy for
her, too. The following day, a Hawkeye agent calls to set up
medical exams for both Mark and Molly.
Direct Mail/Email/Word of Mouth
Email/ Direct Mail/Phone
When Mark receives his first bill and policy in the Hawkeye welcome kit through
the mail, he finds an insert that offers discounts on bundled car, life, and home
insurance. Mark tells Molly, and she looks online to see what car insurance at
Hawkeye covers, and what potential savings could be had by bundling.
An agent calls Mark and Molly to review the final policy, and
let’s them know they will receive a survey via email in the next
few days. In return for providing Hawkeye with their feedback
on the experience, Molly and Mark will receive 2 Starbucks gift
cards in the mail.
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All information contained herein is confidential and/or proprietary information of Epsilon Data Management, LLC. Any unauthorized use and/or any disclosure is strictly prohibited.
“With internal and external research in hand,
journey-mapping leaders need to distill their
findings about:
1) how customers interact with the company,
2) what they want from each interaction, and
3) how they feel about each interaction today—
the three key elements of a journey map.” [1]
Bruce Tempkin, Author of the blog: Customer
Experience Matters.
• “Sales Funnel” to Lifecycle. Marketing needs to reflect
•
•
•
•
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the new reality.
Interactivity that drives engagement.
The 3 “C”s – choice, consistency and continuity.
Leverage Channel Synergies:
 How are you speaking to your customers/prospect,
what channels are you using? Can you utilize more?
Measure all interactions:
 Campaigns, segmenting internal and external data
 Targeting, frequency, multiple channel consistent
messaging
 Performance indicators help to optimize channels
• Master use of data and analytics
• Leverage insights to ensure value proposition remains
strong
• Use multi-channel marketing
• Structure relevant offers that foster engagement in an
efficient way to fund new growth opportunities
Streaming audio, video, iTunes.
Zipcar – car for those who don’t want a car.
Cloud Computing.
Identity Theft protection.
Red24 - is a leading global security company
providing global risk management to employees
and companies.
Auto Service – Extended Warranty.
Beneficiary Companion – Europ Assist.
Healthcare and Financial regulatory
reforms.
Many Sales practices under scrutiny.
Information security and privacy concerns.
Longer State filing and due diligence
periods on insurance and investment
products and programs
Diverts scarce company resources.
The need to generate new revenue streams to grow and replace
mature programs.
CVP based on True Differentiation.
Improving the member/customer experience (to one that is
authentic, genuine and compelling).
An understanding that the consumer is in control, not the
advertiser.
Leveraging Data and Analytics.
Multi-channel marketing proficiency.
Being impactful, e.g. being proactive, innovative,
relevant/authentic to younger members. All touch points and
interactions executed seamlessly with thoughtfulness,
relevance, accuracy and precision (at the right time).
Striking a Balance between “monetizing” traffic and
member/accountholder base without being obnoxious and
intrusive (privacy is a big issue).
Carrier’s Focus on lower acquisition costs.
Agent/Broker as Advisor – Subject matter expert,
Choice editor, navigator, simplifier and advocate.
Pricing Transparency.
Regulatory intensity.
More pressure on Agent Compensation through
Minimum Loss Ratios.
Underwriting automation via artificial intelligence.
Mobility and Integrated, Real-time Communications to
support agents and consumers.
66% of Insurers do not consider their current distribution model as a source of
competitive advantage.
Key Drivers in investing in Distribution are:
The emergence of new technologies (86 Percent)
Changes in customer needs and attitudes (84 percent),
New regulations (81 percent) and
the increasing importance of advice in the distribution of insurance products (also 81 percent).
66% of insurers said that all services -- including quoting, underwriting, billing, claims
declaration and account management -- will be available online within the next three
years;
75 percent -said that developing relationships with “non-tied” channels (independent
agents and brokers, and others) was a main priority.
66 percent - of insurers identified investment in training as a key priority for
optimizing the performance of their captive sales force,
64 percent - identifying specialized tools and sales support, including information
technology (IT), as their main priority.
Aligning IT infrastructure with a defined distribution strategy was cited by 63 percent
of insurers as a key challenge.
SaaS – Software as a Service applications are replacing legacy systems.
Source – Accenture Study Accenture Global Survey Finds Insurers Will Invest $84 Million, on Average, Over the Next Three Years
To Improve Distribution Strategy, May 24, 2010
Obtain a premium price for your product that provides superior
profit vs. competition.
Favorably position your company in a poorly differentiated
marketplace.
Achieve the right match of distribution to key product
requirements (Decision support and Target Customer
Segment(s)).
Meet the growing demands of your customers: transparency,
value, accessible, convenient, green and friendly.
Leverage data and advanced analytics to determine best offer
through the best channel at the right time.
Definition – extent to which product is known and recognized.
Customization – the amount of product adaptation required by customers.
Aggregation – is the product stand alone or needs to be bundled (malpractice
insurance and adherence to a loss control program)
Exclusivity – the uniqueness of the offer. (common in sponsored or direct
channels).
Customer education needs – before and after the sale.
Substitution – the ease with which a product can be replaced by a
competitive offering (i.e. auto insurance).
Maturity – the stage in a product lifecycle – more mature products require
low touch.
Customer risk – potential consequences of a wrong decision and/or switching
costs (and associated risks).
Negotiation – the degree to which the scale and complexity factor in the
transaction.
This checklist is from Friedman and Furey, in their book The Channel Advantage, and is featured in). The Manager's Guide to
Distribution Channels (Kindle Locations 1336-1338) Gorchels, Linda (2004-04-23.
McGraw-Hill
- A. Kindle Edition.
.
High-Touch
Low-Touch
Risk Managers
Agents, Call Centers
supporting:
Direct
Captive Agent
Financial Advisor
Corporate Website
Brokers/TPAs/MGAs
DRTV/Direct Mail/email
MGUs
Inbound/outbound Telesales
Indirect
Hybrid
Risk Managers
CPAs/Attorneys
Financial Advisors
Brokers/TPAs/MGAs
Independent Agents
Mobile
Aggregators
IMOs/DMOs/MGAs
Brokers
Independent Agents
Common Distribution Options
Commercial
•
•
•
•
Risk manager
Consultant
Broker
Agent
Wealthy – High Net Worth
Middle Market
Direct-to-Consumer – Mass Market
•
•
•
•
Investment Advisor
Broker
Agent
CPA/Attorney
• Affinity Groups
• DRTV/Radio
• Virtual Marketing - Aggregator
•
•
•
•
•
DRTV/Radio
Virtual Marketing
Micro-insurance
Retail
“Air-breather” trusts
Outbound
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Direct mail
Tradeshows/seminars/events/Kiosks
Facebook
Email
Twitter
Web sites, Microsites, PURLS
MySpace
Contact Centers (Telemarketing)
DRTV and Radio
YouTube
Mobile/SMS/Chat/Apps
RSS
Brick and mortar stores
Other (newspaper, out-of-home ads, etc.)
Inbound
Paid search/Pay per click
Search Engine optimization
Blogs and social media
Word-Of-Mouth (WOM)
Viral video
TV
Radio
Newspaper
Direct Mail
Company Website
Email
Blogs
Online Forums
Customer Service
Friends/Family
Retail Location
Mobile
Sponsor LOB
Group
(Insured or
SelfInsured)
Individual or
Franchise
Wet or Dry
Trusts or, to
the Group
Policyholder
Individual
Policy
Distribution Admin./Fulfillment
Broker,
MGA, MGU
Agent and
/or TPA
GA, Broker
or Agent
Broker,
Agent and
/or TPA
Sponsors
Insurance
Company,
Agent, IMO
or TPA
Common Elements of A Sponsored Insurance Program
P
&
C
Commercial
or
Program
Business
(Insured,
RRGs or
Captives)
Commercial
Entity
Program
Administrator,
Agent, Broker,
MGU or MGA
RRGs,
Captive,
Insurance
company,
Agent,
Broker,
MGU or
MGA
48
C
h
a
n
n
e
l
S
*
Members, Member Firms and Customers
L
&
H
Underwriter
Policyholder
& Contract
Professional Associations (LAPD)
Military and veterans groups.
Financial Institutions - “Bancassurance” – Credit
Unions, Banks, Virtual Banks, Lenders, Credit
card Companies, Investment banks, etc.
Clubs (NRA, AAA, Costco, Sam’s Club, etc.).
Employer Groups (Worksite marketing)
Loyalty programs.
Call Centers- Monetizing large volumes of
traffic.
Virtual Marketers - Mobile operators, Lead
generation companies
Trusted Brand
Win-win-win “partnerships” between the sponsor, Broker(s) and
Carriers
Innovation – in terms of products, services and channels (both
inbound and outbound)
Strict standards of performance (sales, administration and
claims)
Metrics, Scorecards and Business Reviews
Transparency across broker, TPA and Carrier – roles,
responsibilities and compensation
Content and social media support
Legal and Regulatory compliance
Ownership of records
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50
Benefits to the Affinity Group
Adds value to Member benefits
program
Can help attract, engage,
connect and retain members
Fill a specific insurance need
Advocacy role at
billing/collection/claims time
Generate Non-dues revenue
Can be “turn key” with no
capital requirement necessary
Benefits to the Member
Low pressure sales
Competitive pricing
More relaxed underwriting vs.
general market
Tailor-made coverage(s)
Program Vetting and Oversight
by trusted organization
High quality service
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Types of ROI for Affinity Groups
Direct Benefits
Indirect Benefits

Increased Revenues

Increased relevance to stakeholders

Faster and streamlined business
process improvement

Increased Brand Awareness

Increased Access to Customer Profiling
Data

Decreased Customer Service Costs

Decreased Service Costs

Enhanced Customer/Vendor Satisfaction

Increased Customer Retention and
lifetime value of members

Increased Employee Recruiting
Satisfaction

Improved delivery of reporting

Attractive host for acquisitions

Demonstrate service value

Increased Competitiveness

Decreased Staff Recruiting Costs

Improved relationships with partners
Individual Lines (including Personal Lines):
Direct – Mutual of Omaha, GEICO, AAA, ANICO.
General Agents, IMOs and DMOs.
Captive Agents- State Farm, Nationwide, Liberty
Mutual, etc.
Independent Agents – Hanover, Travelers, etc.
Group: Association and Benefits (for firms)
Brokers, Agents and TPAs.
Full Service Brokers that are MGA’s, MGU’s, TPAs, etc.
P&C Specialty programs – Program
Administrators/Brokers, MGAs, MGUs, RRGs and
Captive Insurance Companies.
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Core competencies: marketing, administration,
education, information, networking, etc.
Line of Business (L, A&H and P&C).
Member or Customer Value Proposition.
Knowledge, specialized expertise and capabilities.
Capital Resource Commitments (people, processes and
technology).
Licensing (Agent, Broker, Captive, etc.).
Partners, vendors and supplier networks.
Level of risk and risk tolerance.
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55
1. “Turn key”, Private label – select a TPA and/or PA with
insurance company relationships that can manage all facets of
the program.
2. Insurance company-run program, direct-to-member and/or
member firm. (i.e. Liberty Mutual).
3. The “for profit”, In-house agency/TPA subsidiary -with
responsibilities for marketing, sales and administration. Could
be limited to select, few products.
4. Captive Insurance company run, RRG or Self-Insured program,
direct-to-member and/or member firm. (i.e. NASW).
5. Hybrid Approach – a combination of 2 or more of these other
models.
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Is running an Sponsor Insurance Program A Sponsor’s EnterpriseLevel Activity?
Strategy - does it have a high level of strategic importance to
the Sponsor?
Value creation – is the insurance program a source of perceived
or real value for the membership?
Brand - does the program affect the Sponsor brand and image
(good or bad)?
Customer experience - Is a seamless member experience
required across Sponsor?
Trust and Quality - Does it require Sponsor vetting, oversight
and periodic performance assessments?
Relevancy - Is it a service that needs to be relevant to serve a
current and future membership?
Risks - and rewards trade-off.
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58
Is it a product nearly every member (that is the right fit for the
product) will want to buy and buy through the Sponsor
Insurance Program?
Is there significant funding of resources (people, processes and
technology) and Sponsor control over the sales, marketing,
fulfillment and servicing of the product and service, since this
activity can have an impact on the brand?
Is there an opportunity to make a big, positive change in the
customer experience (a.k.a. the ‘Wow’ factor)?
Will it provide enough of a positive contribution (non-dues
revenue and brand equity) to the Sponsor and partners to
make it a worthwhile part of our product portfolio?
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Agent – licensed and appointed as a representative of the insurance company.
Broker – licensed and appointed intermediary that represents the insured.
TPA – a third party administrator that performs one or more insurance company
functions: marketing, sales, medical underwriting, billing, collection, claims
adjudication and/or claims payment.
GA – General Agent appointed by an insurance company: (by territory or vertical)
IMO and DMO – Independent or Direct Marketing Organization.
MGA – Managing General Agency (same as a GA but more of a wholesaler).
MGU – an MGA that also has underwriting authority delegated, sanctioned and
audited by the insurance company.
Program Administrator – same as an MGA, usually P&C, that also has
underwriting authority delegated, sanctioned and audited by the insurance
company.
Program Business – specialty lines tailored to a homogeneous occupational group.
(i.e. Lawyers Professional Liability).
Self-insured program – a vehicle common in health insurance, where the employer
assumes a certain level of risk (stop loss limit) and is supported by an administrator
and stop loss provider.
Captive insurance company and Risk Retention Group (RRG)- allows similar businesses
to form groups to provide self-insurance for the primary purpose of assuming and
spreading the liability risk exposure(s) of its group members (member-owners).
Met Life Association Study, March 2012
“Run for Coverage” by Jeffrey Altman, Association Management, July 2001.
“Does Your Sponsored Insurance Program Measure Up?” By: Ed Armstrong,
ASSOCIATION MANAGEMENT, November 1998.
“Building Robust Distribution to Support Strategy”, By Bill Tyson, The Savvy
Strategist, October 18, 2011.
“Establishing an Insurance Subsidiary”, Douglas Culkin, Association Management
Magazine, October 1999.
Insurance Glossary of Insurance and Risk Management Terms by IRMI.com
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