By: Kishore K, Associate Consultant, BFSI

Digital marketing vs. traditional marketing

Although advertising has been around for 60 years, the evolution of marketing in the last 20 years has been outstanding. While traditional marketing is still used by many businesses, the shift toward digital marketing began in the 1990s and is steadily increasing. Some drawbacks of traditional marketing are little interaction with the target audience, lack of innovative means to communicate with evolving personas, high costs, tough-to-measure ROI, difficulty in receiving feedback, and poor conversion ratio.

Although the growth of digital marketing slowed down due to the pandemic, it is set to grow in the future. A forecast by a media agency shows that digital marketing will account for 55% of total global ad spend in 2022. All the marketing efforts on the Internet are referred to as digital marketing, also called online marketing. Insurance companies leverage digital channels such as social media, search engines, email, and other websites to reach current and new customers. According to the forecast provided by a marketing research company, the insurance industry will top the digital ad-spending share with 45.6%, among other financial services.

The surge in digital marketing is already underway worldwide. However, the pandemic has accelerated the trend. A survey of marketing leaders shows that 72.2% of the marketing budget has been allocated to digital channels.

Benefits of digital marketing:

Challenges in insurance marketing:

The top challenges of building relationships for lead conversion are generating enough leads, lack of budget and resources, targeting leads, lack of data on leads, messaging, and creativity. A few of the key challenges faced in insurance marketing are:

1. Promoting brand awareness
2. Generating quality leads
3. Providing a better customer experience
4. Customer engagement
5. Data privacy and building trust
6. Retaining existing customers

Key digital marketing – Current and future trends:

Here are some technologies that address some of the challenges in insurance marketing.

1. Artificial Intelligence (AI): Insurance companies can use emotion AI, also known as affective computing, to understand a customer’s mental state and act accordingly.
2. Search Engine Optimization (SEO): SEO plays a crucial role in the insurance industry, where competition is high. Insurance companies adapt to SEO to increase brand awareness and sales. SEO also helps insurance companies to improve lead generation numbers, boost online sales, increase organic website traffic, and enhance online visibility. Around 93% of online experiences start from search engines.
3. Augmented Reality (AR): Insurance companies have been using mobile AR applications that help people understand their retirement goals and insurance plans when certain options are selected. AR simulations are gaining popularity among marketers because customer education and marketing go together. Axa Insurance uses an AR-enabled game called Ingress to create brand awareness.
4. Voice search optimization: Around 55% of teenagers use voice search every day. By 2022, 50% of all online shopping will be made through voice results. One out of four customers use voice search technology to learn about insurance agents and products.
5. Chatbots: Chatbots technology is one of the top digital marketing trends in 2022. Over 63% of people prefer conversations with chatbots to communicate with businesses or brands. According to a survey, usage of chatbots is typical for around 68% of respondents in the insurance industry. AI chatbots are an example of how AI is utilized in marketing. Over 60% of Internet users have already used AI chatbot technology. It is projected that this technology will be a USD 190 Bn industry by 2025. An insurance company sells travel insurance through a Facebook messenger chatbot in Hong Kong. LTIMindtree has helped a leading life, retirements, and annuity provider in North America to implement chatbot and voicebot technology that led to contact center optimization, resulting in a reduction of inquiry and service calls.
6. Personalization: 80% of consumers say they are more likely to do business with a company if it offers personalized experiences. Insurance companies can use personalized marketing to know about customer behavior and improve sales initiatives.
7. Email marketing: Customers are six times more likely to click from an email than a tweet. In the insurance industry, a lack of communication leads to decreased lead conversion. Luckily, automated and email marketing improves communication with customers. Having a call-to-action button in emails can lead to a 28% increase in click-throughs. It is a proven, cost-effective technique in the insurance industry to generate leads.
8. Gamification: Gamification benefits businesses by increasing average website session time, average time spent reading an email, customer engagement, and social sharing. Tryg, a Danish insurer, launched a quiz about dental health. This was mainly started to generate leads and improve awareness about a dental insurance product.
9. Push notifications: 85% of offline stores use push notifications. Almost 9% of publishers elevate traffic through web push. The largest public insurance company in Germany uses WhatsApp push notifications to alert customers about weekly news.
10. Geofencing (Location-based marketing): Mobile ads with geofencing have double the CTR (click-through rate). Geofencing is compatible with 92% of smartphones. After receiving location-based message, 53% of shoppers visited the retailer. Insurance companies use geofencing to deliver the right product to the right audience. For example, rental insurance-related marketing campaigns can be launched in regions near universities and schools. These campaigns will reach heavy mobile users who are more likely to rent for the next few years.
11. Video marketing: 72% of businesses say videos have improved their conversion rate. People can easily understand the product through a well-crafted video message. One of the largest insurance companies in the US uses video marketing to showcase the features of their homeowner insurance, like dwelling protection, family liability protection, etc.
12. Influencer marketing: Influencer marketing is also suitable for small insurance companies. The most effective platforms for influencer marketing are blogs (37%), Facebook (25%), YouTube (6%), Instagram (6%), Twitter (5%), and others (21%). The majority of insurance companies are yet to adapt to influencer marketing. Adaptation will benefit the insurers by increasing the number of new leads and decreasing marketing costs.
13. Blockchain: Businesses are starting to use this technology to solve major concerns such as privacy issues, raising transparency concerning identifying robots, and building consumer confidence. Insurance companies can leverage blockchain technology in loyalty programs. This increases the transparency of the loyalty program and facilitates easier monitoring, thus improving the overall customer experience.
14. Virtual Reality (VR): Virtual reality will become a crucial part of marketing campaigns by 2025. The market continues to grow from USD 6.1 Bn in 2020 to USD 20.9 Bn in 2025. Insurance companies can use VR to create awareness about the importance of motor insurance by simulating the risks involved while driving.

Desirable digital marketing skills:

In order to leverage these technologies to align with digital marketing themes, the demand for professionals with digital marketing skills is on the rise. It is important to upgrade the talent and skills of the workforce to stay ahead of competitors. A few of the important skills that are in demand are:

Digital marketing redefining marketing strategy:

Digital marketing is not just used to create awareness about the brand, product, or services through promotions, but it also helps businesses to understand customer behavior, reaching them in the right place at the right time. The growth of digital marketing in the insurance industry is surging high after the pandemic. Irrespective of size, all insurance companies can embrace digital marketing. LTIMindtree helps insurance companies to provide best-in-class digital experiences to customers. Our expertise spans web content management technologies, social marketing technologies, Keyword search management, SEO, and analytics. We have helped one of the largest insurers in the Middle East to improve their sales performance, enabling them to provide superior customer service across touchpoints by digitizing intermediary experience.

LTIMindtree has also enabled a leading US-based supplemental insurance provider to digitize their customer experience through a mobile app. We have been digital partners with leading property and casualty as well as life and annuity insurers. Our team of domain experts, solution architects, and user experience designers have helped them transform their customer experience by providing cognitive contact center solutions, intuitive website, and mobile applications setup, business insights dashboards to monitor sales performance, and CRM solutions.

References:

1. https://www.zenithmedia.com/coronavirus-crisis-accelerates-shift-to-digital-advertising/
2. https://www.emarketer.com/content/us-banks-insurance-companies-compete-with-fintechs
3. https://www.webstrategiesinc.com/blog/how-much-budget-for-online-marketing
4. http://ascend2.com/wp-content/uploads/2019/09/B2B-Perspectives-on-Lead-Generation-Quality-190903.pdf
5. https://iide.co/blog/digital-marketing-trends-india/
6. https://www.webfx.com/seo/statistics/
7. https://jasoren.com/how-augmented-reality-impacts-the-insurance-industry-7-use-cases-of-ar-applications/
8. https://www.insurancethoughtleadership.com/emerging-technologies/are-insurers-ready-voice-search
9. https://starrcompanies.com/News/Starr-Insurance-Offering-Travel-Insurance-Through-Facebook-Messenger-Chatbot-in-Hong-Kong
10. https://emerj.com/ai-sector-overviews/artificial-intelligence-in-insurance-trends/
11. https://www.duckcreek.com/blog/personalized-insurance/
12. https://www.globaliqx.com/gamification-in-insurance/
13. https://www.messengerpeople.com/whatsapp-notification-cases-for-insurance-companies/
14. https://blog.advids.co/20-property-insurance-video-marketing-examples/
15. https://www.convinceandconvert.com/digital-marketing/influencer-marketing-for-businesses/
16. https://timesofindia.indiatimes.com/blogs/b2b-marketing/the-trends-that-will-drive-the-future-of-marketing/