Riding the Whirlwind

Strategic Interactive Marketing for the Insurance Industry

Key Points:

Companies have concerns about too quickly embracing the new delivery mediums.

Reasons are manifold and extend right across the business (see right).

One of the biggest questions was whether consumers will embrace these new mediums and if they did, which ones.

Nether-the-less, most organisations are making substantial investments in pilots, typically £0.25m to £0.5m in each one.

4.5 Future Delivery Mediums

Comments regarding specific delivery mediums are reviewed in the next section. Discussion of more general issues follows:

4.5.1 Larger organisations are concerned about too quickly embracing the new distribution mediums (including telesales):

• there is a need to avoid eroding the substantial investment in established distribution methods (e.g. branch network).
• the brand and all that it signifies is more significant than the distribution method.
• there is a risk of dehumanising customer interaction and thus undermining the relationship.
• the need to recruit new staff with the appropriate skills and personality and then to train them.
• the need to create a customer service culture throughout the organisation.
• the inflexible functional organisational structures, and complex and inefficient processes.
• a dependence on legacy IT systems and difficulties in creating new customer based administrative systems.
• the risks with new technology.
• the difficulty in estimating the ROI.
• the need to pace their customer base in the adoption and use of these new technologies.
• whether these new technologies will really take-off, especially for the mass market, and whether users will want to use them for financial services (e.g. television is seen primarily as a family entertainment device, not a 1:1 business tool).

4.5.2 Nether-the-less, most organisations interviewed are investing in pilots of these new technologies. For large organisations, the typical pilot expenditure (e.g. Internet, Kiosks, I-TV) is in the order of £0.25m-£0.5m. The justification is a learning experience that allows them to roll out new distribution methods as and when warranted.

Interviewees generally expressed agreement with the Future Customer Segmentation diagram.

Many placed the mass market between Financially Unaware/Financially Unsure and Financially Aware/Financially Unsure.

They agreed the trend was "upwards".

4.5.3 Nearly all interviewees expressed agreement with the Future Customer Segmentation diagram (see below). Many placed the mass market between the Financially Unaware and Unsure and the Financially Aware but Unsure. They agreed that the trend was "upwards". Some expressed a desire to be out of the crowd and with the Financially Astute and Sure.

Note that it is very likely that a company's customer base will transcend two or more segments but with a focused "centre of gravity" that will shift over time. Definitions of the segments are available on request.

Click here for a full description of this model.

Favourite mediums are telesales (well underway), followed by Kiosks, Interactive TV, and the Internet (WWW).

4.5.4 With regard to the communications mediums, interviewees thought that some mediums like the telephone will be attractive to all market segments and that different mediums will be used at different points in the buying cycle, or used according to a customer's preferences. The mediums listed in the diagram should therefore be viewed as dominant rather than exclusive.

Favourite mediums are telesales (well underway), followed by Kiosks, Interactive TV, and the Internet (WWW).