Two Different Ways to Sell Insurance, but One Approach for Aligning Sales, Marketing

In the insurance industry, the two most common customer acquisition approaches both have unique challenges. First, the "traditional" approach of a large field presence, of either employed insurance representatives or independent agents, must attempt to differentiate its product and approach, even when there may be few differences from company to company. The most effective way is to market one-to-one with direct marketing and offers that speak to an individual's preferences and current needs. This requires a blend of having the correct pieces of marketing materials available and giving the field sales representatives flexibility to personalize for each prospect.

Ideally you're leveraging your field staff as well as independent agents because they are each experts on their prospects and customers. An added goal is to do this in the most efficient and cost-effective way. This means that alignment of sales and marketing may have less to do with when a lead is sent to a sales rep and more about using the most current version of each marketing material and not printing more than is needed. For example, as part of a continued effort to rationalize its cost structure, European insurance company P&V Verzekeringen sought to reduce the costs associated with the production and administration of its sales and marketing collateral. Julien Hayen, P&V corporate communications officer explains, "To ensure a sufficient supply for our agents, we'd produce flyers and brochures in large quantities. Every year, however, we had to dispose of collateral because it had become outdated as a result of changes in the market, the legal environment, or simply because certain promotional offers would be limited in time."

Agents would order standard collateral by phone or by e-mail, often more than required as they didn't want the extra bother of regular re-ordering. With this manual process, it was difficult to prevent the use of out-of-date information being distributed, which had liability implications as well as possibly affecting the sales process. Hayen adds, "We also identified a need for personalization, having noticed that our agents increasingly used self-produced, personalized communication materials. Unfortunately these communications, however well-intentioned, didn't always comply with legal requirements, let alone brand standards."

By providing customizable templates on a centrally-managed sales and marketing platform, P&V is now able to make sure its agents always have the most current information. In addition, because the customizable templates are highly personalized, the agents are able to match their materials with what will work in their territory or even with a specific customer. Because relationships are key to selling and retaining customers, particularly when selling something as personal as insurance, this personalized approach is the most effective.

As for addressing the goal to cut costs and wasted materials, because P&V is now printing its materials to order, the superfluous stock has been eliminated. Hayen shares the impressive cost savings, "During the first year of operation we have already achieved a cost reduction of 30 percent and we expect this to increase to more than 50 percent."

One last lesson from P&V is how headquarters' marketing was able to get sales agents in the field to use this new technology. To ensure acceptance of the new system, it was absolutely vital that it was easy to use by busy agents with priorities other than ordering marketing collateral. By using a system designed for users with little or no marketing or graphic design expertise, P&V made their investment in technology an asset instead of just another cost of doing business.

The second approach is even trickier. This is when an insurance company has a direct and highly automated relationship with its customers. For example, InShared, which launched in Europe in January 2009, is an Internet-only insurance company. "We are set up as a small, networked organization," says InShared IT manager Peter Toonen. As a completely Internet-based insurance company "...we can keep the costs and premiums to a minimum. We didn't invest in a network of local branch offices, an extensive back-office or other support departments. Instead we outsource most of our operations to specialized partners."

Although this approach has enabled InShared to provide its customers low rates, it added the challenge of delivering information, particularly personalized information, without local branch support. The company's answer has been to outsource all document production and delivery such as e-mail, policy terms and conditions, quotes, and claim forms. "While we communicate electronically where possible, rather than by paper, it's sometimes better to send documents via ordinary mail instead of e-mail," says Toonen. "We needed the flexibility to easily alter the mode of delivery, or to adapt it to each client."

InShared's clients receive quotes and apply for policies online via the Inshared Web site. This Web site provides access to product information and simulations, acting as the online equivalent of an insurance agent. In essence, InShared's quest to align their sales and marketing program needed to happen within its own delivery system. The question was "how do you offer a personalized approach, when you have very few people interacting with customers?"

For such a company, digital asset management as well as an automated direct mail implementation program is essential. When so much is riding on alignment of humans and programs, it is critical that the chosen sales and marketing solutions integrate securely, reliably and seamlessly with the online insurance company's own web servers as well as the rest of its IT infrastructure. For example, all of InShared's templates and other assets are stored in a Luma's central database. By having online demands processed in real time and triggering document distribution, InShared is able to have a timely interaction with its widespread and diverse clientele.

We've now reached the point in business when alignment means more than just tactical steps or philosophical approaches. Alignment is key for creating a more efficient sales approach that streamlines the process and removes wasteful steps and additional costs. Although P&V and InShared have very different business approaches, by embracing technology that answers the concerns of marketing, sales AND the company's overall business, both companies have found the right way to align for me.