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Insurers Leveraging Social Media to Improve Customer Acquisition and Retention

Insurance carriers are applying increasingly sophisticated analytics tools to the data they gather from social media initiatives in order to increase customer engagement and improve acquisition and retention.

After several years of mostly observing the phenomenon, businesses of all kinds now are taking the explosion of social media seriously, eyeing the channel as a customer acquisition and retention tool. And for a change, insurance companies aren't lagging behind the trend. On the contrary, carriers across all lines of business are combining emerging social media best practices with their traditional expertise in data analysis to lead the charge.

"Insurers are very good at measuring structured data. They use that data to make underwriting decisions, claims decisions and more," notes Mark Breading, a partner at SMA: Strategy Meets Action, a Boston-based consulting firm. "All of social media is unstructured, so it creates this new challenge with all this new information that you can capture. But there's a new set of tools that you need to assess this information."

When Seattle-based PEMCO ($318 million in annual premium), a multiline carrier operating in the Northwest U.S., wanted to kick off a social media campaign, it began by listening -- using mostly publicly available tools such as Google Alerts -- to what customers were saying about the company, relates Rod Brooks, PEMCO's chief marketing officer. "We were founded on the basis of being a company that led with relationship," Brooks says. "You can lead with product innovation, you can lead with price -- but we decided to lead with customer relationship and intimacy."

That strategy, Brooks believes, helps create brand advocates who pass on positive experiences with the business to their friends. Social media can facilitate this conversation, he says -- but it's crucial to take the right approach, Brooks warns. "One of the first steps was to figure out, if we were the customer, what would we say about PEMCO and how PEMCO performs?" he reports. "The first real business step was to create awareness of our presence, willingness to engage and our brand strategy."

With a commitment in place to use social media to improve its connection with customers, the carrier had to find a way to engage them on a more regular basis, adds CIO Jeff Weeks. "It's a little more challenging than banking or other industries in which [customers] have a need to interact with the financial institution daily," he says. "People come to their insurance company when they have a need, such as a claim or a change in their policy."

To initiate engagement, PEMCO launched the microsite "We're A Lot Like You, A Little Different," where the carrier created profiles lampooning stereotypes of Northwest residents. The company encouraged visitors to share these profiles via social networks and also allowed customers to submit their own. According to Brooks, this has "really propelled" conversations about the brand in social media.

"We learned early on that people don't want to talk about insurance. It's a product they don't understand, don't want to buy and, after they own it, they don't want to use it," Brooks explains. "They want to talk about the neighbors, the people of the Northwest. [This is] something other than insurance that people can talk about, and it gives us a platform at the right time and right place to enter insurance information and connect them to opportunities to buy."

Of course, all of this increased the opportunity to collect and analyze marketing data, which in turn has helped PEMCO refine its social media presence, which includes a Facebook page (facebook.com/PEMCOinsurance) and Twitter account (@pemco). "We went through a whole year's worth of Facebook and Twitter and blog reviews and measured sentiment in aggregate before we started a process of improvement," recalls Brooks, who notes that PEMCO, along with marketing partners Ant's Eye View (Redmond, Wash.) and Nology Media (Seattle), uses a platform from Radian6 (Fredericton, New Brunswick, Canada) to measure sentiment in social postings. "Part of that is using the right words, the right stories, the right time of day. We've found that by doing this in a smart way, we've moved the sentiment meter toward favorable."

PEMCO also has implemented Adobe Omniture to track how people come to its sites, as well as which content triggers interactions. "Analytics are critical for our e-commerce and online social media tactics," says PEMCO e-commerce business manager Dave Kopetzky. "We implemented tools to help us get the basic tracking metrics of any of our web properties that we produce or produce through third-party services."

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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