As insurance customers become more empowered, more demanding and more likely to switch providers, marketing will play a critical role in helping insurers attain their ambitions for growth. However, insurance chief marketing officers need to extend their vision of marketing and its scope, particularly with respect to digital transformation.
Recent survey research conducted by Accenture among chief marketing officers found that many insurance CMOs are facing a crisis of confidence. Facing a volatile market where competition is coming from new rivals, new customers are scarce, and existing customers are increasingly fickle, insurance marketing executives see their marketing functions as ill-equipped to deliver the performance expected of them. Only 53% of respondents are confident that they can meet the performance objectives of their organizations. This was the lowest level of confidence of any of the industries surveyed.
These executives also appear to be challenged to embrace digital transformation: Only 19% believe that their companies will be viewed as digital businesses five years from now.
Not all insurance marketing executives see things the same way. In our survey, we found that high-growth insurers–those outpacing the industry’s average growth rates–place more importance on analytics and digital channels than those that are achieving lower growth. For example, 83% of high performers place great importance on data and analytics, versus 73% of low-growth insurers, while 41% of high-growth insurers said they find it easier to succeed with digital channels, versus 21% of low-growth insurers. One of the biggest disparities was in the importance placed on responding to the changing consumer, with 83% of high-growth insurers describing this as essential, versus just 47% for low-growth insurers.
Insurance marketing executives recognize that improving customer retention and loyalty is their most important business issue, with 84% describing this as “extremely important” or “very important.” Despite this recognition, insurance marketers are not keeping pace with the market and technology trends that call for a new approach to the customer experience. Doing so requires a number of strategic and tactical initiatives.
To start, CMOs need to forge closer relationships with the rest of the C-suite, working as closely with the COO and the CIO as they do with the sales and customer services organizations. CMOs need to establish marketing as central to what will become an enterprise-wide digital ecosystem, with multi-channel, personalized experiences for each customer. And they need to embrace–and own–the full omni-channel customer experience, engaging customers in an ongoing dialogue instead of individual transactions.
With the right relationships, strategy and digital ecosystem in place, CMOs can turn their attention to the following initiatives:
1. Integrate channels with real-time analytics–and then act on the insights. Delivering the right marketing messages and the right product offering to customers in their preferred channels means leveraging analytics tools that enable micro-segmentation, product personalization and channel optimization. Insights should fuel integrated customer experiences that span online and offline channels.
2. Invest in agile technologies and cloud-based services. Today’s technology–like today’s customer expectations–continue to evolve. “Test, learn and earn” is the new mantra, and insurers can take advantage of cloud-based technologies to move quickly and incrementally.
3. Focus on winnable battles in the war for talent. Insurers need to think carefully about which services the organization will handle in-house and which it will outsource to agencies and technology providers. Investment should be focused on building strong internal skills, processes and platforms in the areas offering the best possibilities for differentiating the customer experience.
4. Reorient the marketing operating model and integrate new talent to harness digital innovation. New talent with skills in analytics, mobile, digital and other areas should be integrated in a way that produces different outcomes. It does little good, for example, to plug analytics talent into a traditional marketing operating model when the organization really needs an integrated, end-to-end customer experience driven by analytics.
Insurance CMOs–like insurance companies generally–must come to terms with a digital future. To achieve a successful digital transformation, C-suite executives in insurance companies will have to collaborate more effectively with each other. They will need to bring in external partners to broaden the expertise at their disposal and expand their range of offerings. The CMO–who understands the brand, the customers and the products better than anyone–is a natural leader for this journey.