Offering each customer a tailored offer bundle, according to their individual insurance needs, is what personalization is all about. Numerous players in the insurance industry are talking about the concept of insurance product personalization today, but for as much buzz as it’s getting, it’s a topic that still raises more questions than answers:
- How do we get started?
- What segments should I focus on first?
- Should I combine personalization programs with other marketing campaigns?
- How will I know if my first attempts are working?
- What best practices should I follow to maximize success?
- What if I get it wrong?
These concerns are perfectly understandable, especially considering the fact that the entire insurance industry is just getting started. So, if you haven’t attempted a personalization strategy yet, don’t worry, it’s early in the game, and you’re not alone.
But at the same time, every insurance company should pursue personalization now (and begin to evaluate vendors and insurance personalization solutions to make the process as easy as possible). It’s an important decision: you can choose to be an early adopter and gain a critical advantage now, or if you delay, you may be forced to play catch up and potentially lose business to your competitors.
5 Benefits of hyper-personalized in Insurance Offers
Why should we consider personalization strategies and tactics? Can’t we continue to price and deliver products and services in the same way we always have?
The simple answer is that personalization has the potential to deliver superior results than past, traditional insurance approaches. For example, early personalization programs have already shown they can increase total sales, improve customer engagement and loyalty, create more successful cross-selling efforts and deliver the most appropriate insurance bundle to your customers.
It’s not a one-sided benefit: Research shows that consumers are demanding personalization, too. According to the Youbiquity Finance report, 80% of customers are craving more personalized offers. The same report found that 77% of consumers are willing to trade behavioral data in exchange for lower premiums and faster settlements.
A roadmap to personalization success
Now we’re back to the original question: How should I start my first personalization program?
#1. Go lean
This recommendation borrows concepts from software development such as lean and agile methodologies. In this case, developing an initial MVP for their first personalization mode is a good place to start. The point here is to move quickly and develop new models without having to make changes to existing prices, which may be overwhelming and cause delays. Pricing teams can continue work as usual, just adding the new personalization model on top.
#2. Pick the right target
We also recommend that data science and product teams carefully evaluate various segments of their business and choose the one where they believe they can gain the most. For example, we often encourage clients to focus on products with a large add-on variety or to pick channels where implementation may be easy or that have sufficient volumes to justify the effort. Pricing teams should also make sure that no other projects are using this same segment so they will avoid conflict with other marketing programs.
#3. Perform a deep analysis
Now that the target has been chosen, creating a deep analysis of the existing data will help to set a good business goal for the project as well as perform accurate measurements of the personalization strategy. Also, determine if other departments are running initiatives simultaneously that may make it hard to identify the results of the specific personalization strategy and where they are coming from.
#4: Create specific goals
Be very clear about what you’re trying to achieve with personalization. These may be specific goals such as increasing conversions, selling more add-on products or services, increasing premiums without losing conversions, or other objectives. These goals should be specific and accurately measurable, otherwise, it may be hard to gauge the program’s value and contribution to the bottom line.
#5. Measure, measure, measure
Measuring your results will show the potential value that you may expect in future personalization efforts. When you get your first set of results in, the changes in the initial metrics will help you begin to see and predict the total impact personalization can have on your bottom line. Effective measurement may also reveal pain points or potential obstacles. For example, the channels may not be as flexible as needed, agents may need more training, or there may not be enough variety in your products.
The time for insurance personalization is now!
Remember it’s not too late to get started with personalization. The good news is that few competitors have much of a head start, but that doesn’t mean we should delay. But once they do, it will be up to the entire industry to play catch up, so you’re better off starting now.
I hope this information is valuable as you begin to develop a successful personalization strategy. We’re committed to helping you with your insurance product personalization offers, so stay tuned for future articles and other valuable resources on this topic.