Why insurers should put customers in charge of driving referrals.
When Facebook turned 10, Mark Zuckerberg took time out to remember his “amazing journey". In a post to the world, he explained that he’s always thought it was important to give “people the power to share and stay connected, empowering people to build their own communities themselves” and, like it or loathe it, Facebook does exactly what it says on the tin. If you doubt whether it really helps people stay connected just ask my 80-year-old mum how long she spends looking at Facebook photos and how much she enjoys it!
So where does that leave insurance brands? For some time we’ve known that customers buy more, show greater loyalty and refer more of their friends when they are part of an online community, but does that community need to be built by a brand or can insurers leverage Facebook or insurance buying platforms like Bought By Many to build communities for them?
Why do we need communities: Facing up to the trust issue
It’s hard to remember a time when people were more suspicious of banks, insurance firms or indeed anyone with even a passing connection to the financial services industry. Restoring trust and finding convincing ways to engage with customers is a huge priority for all within the industry. For insurers who increasingly face pressure from new online competitors, the issue is urgent: find a way to build genuine loyalty or disappear under the challenges of margin compression, customer promiscuity and a competitive landscape that’s getting harder and more cluttered by the day.
Customers are getting harder to reach
Yet, even as the need to connect with customers becomes more and more urgent, those very same customers are getting harder and harder to reach. Traditional advertising has lost its magic touch. The typical person recalls just 4% of advertising from the last TV show they watched^ and 55% of us prefer to watch without any ads at all. Just 22% of firms say that direct mail is a powerful way to talk to consumers and print ads have lost their glossy appeal. Put simply, old media is beginning to look… old.
Customers no longer turn to the media for advice on which brands to trust and the reason why is simple. They don’t need to. Consumers are connecting with each other, via social networks and online communities, to share views on brands, refer friends to the best insurance deal or offer feedback on the latest banking customer service disaster. Yes, Mark Zuckerberg et al have well and truly succeeded in giving power to the people.
The community-led fight back
In many sectors brands are fighting back using online communities, hoping that bringing customers together will foster engagement and strengthen relationships. The case for a branded online community is, after all, pretty compelling^:
- 76% of people feel more positive about the company
- 82% are more likely to recommend the business to others
- 91% think the community helps them give candid feedback
But despite the great stats, how many superb examples of branded online communities can you think of? Community consultancy FeverBee asks a similar question, providing a list of key community failures from brands as diverse as the BBC, Arsenal FC and Lurpak butter.
When a brand as content rich as the BBC fails to make a community fly it’s time to question whether insurance firms really have what it takes?
Facing up to failure
So why do so many online communities fail? There are many more complicated answers out there, but put simply, because of three key reasons:
- It can take a lot of money to build an online community (especially if you’re an insurance brand struggling with legacy systems and poor IT support).
- It takes a lot of effort to maintain a community – launching is the easy bit.
- Most brands (especially insurance brands) simply don’t have enough interesting things to say.
So what’s the alternative for insurers? Give up and go home?
In fact, the answer was there all along. Don’t try and build your own community, simply leverage the one that’s already reached the stage of world domination: Facebook.
OK, so much so obvious you might think, after all that’s why lots of insurers have started up Facebook pages or Twitter feeds. Not so fast. Setting up a Facebook page might seem like you’re leveraging an existing community but in fact, all you’re doing is using someone else’s technology platform. Insurance brands who set up Facebook pages still face the effort of maintaining a presence and building engagement and they still face the challenge of finding enough interesting things to say.
Trust in real people power
What if, instead of ploughing all that effort into social media activity that’s difficult to track and evaluate, brands simply trusted customers to tell each other about good deals – with a few good incentives thrown in of course.
That’s the premise behind Bought By Many, an insurance buying platform that brings people with similar insurance needs together. Customers benefit because they can leverage their collective buying power to find the right deal at the right price and insurance brands benefit because they can tap in to a stream of prospective customers that will grow organically by Facebook enabled word of mouth.
What Bought By Many bring to the table is the ability for customers to easily demonstrate their group buying power and an easy way of turning that power into an exclusive deal from an insurer. In some ways, it’s reverse engineering the traditional role of the insurance intermediary by helping customers influence insurers rather than the other way around.
The platform has Facebook sharing at its heart and in fact has leveraged the social network to attract its early community members. Now the responsibility lies with those community members to reach out to their friend networks and encourage like-minded customers to sign-up.
So will they do it? Well the jury is out on the long-term answer but, consider this comparison and see which is more likely to prompt you to take action:
- An insurance brand sends you a flyer offering cheaper travel insurance
- Your current travel insurance provider asks you to “like” their Facebook page
- A friend from your skiing group explains via Facebook that if all of you sign-up to his off-piste skiing group on Bought By Many there might be enough people to prompt an insurer to design a bespoke product or offer an exclusive discount.
Once more, the power really does rest with the people. Facebook has created an easy way for people to share information and savvy brands will simply leverage that and go with the flow. Today’s customers don’t want to feel “owned” by brands or under pressure to “like” content that feels a bit like spam. In Zuckerberg’s words, they want to feel empowered to take matters into their own hands. The quicker that insurance brands embrace that the sooner the rewards will flow for everyone.
^ Source: Communispace / Harvard Business Review
Photo credit: MKH Marketing
This article was independently written by Bought By Many. We were not paid to write it, but we may receive commission for sales that result from you clicking on a link to one of our partners.