The key to low lead generation costs in car insurance - Showtime Digital

The key to low lead generation costs in car insurance

30 April 2019 Read 422 times

This article follows on from a previous blog on the promotion of personal car insurance, home insurance and caravan insurance. It discovers why people are happy to save $200 a year when purchasing car insurance. You can see this article here.

This article will address how you can achieve an extremely low cost per acquisition in the car insurance and personal lines category.

We’ll also give you a real-life example of an insurer who did just this, who turned the tables on the category and are winning big because of it.

When you align yourself with the consumer's values you can achieve the following.

  1. Consumers go out of their way to do business with you
  2. The sales cycle can speed up
  3. Acquisition cost can drop
  4. The brand purpose can speak louder which assists brand recall
  5. You can reduce churn

First the data

Here’s a snapshot of results for this personal insurer. They sell car insurance, home insurance, caravan insurance and landlord insurance.

Graph1 shows the conversions each month for 28 months. The first point you’ll notice is there’s a healthy increase in outcomes YoY. For example the Q1 2019 increase from Q1 2017 is 532%.

Graph1

In Graph2 we can see the cost per conversion graph. In Q1 2017 the cost per conversion was $37.28 and the cost for Q2 2019 has dropped below the $12 dollar mark. Wow! Don't tell the major insurers the cost to convert in personal insurance is below $15.

Graph2

It’s been a surprise for everyone to achieve this number, especially given the competitiveness of the sector.

Why is the acquisition cost so low?

Now that would be telling, but we can give direction on how you might achieve something similar.

The first point to understand is, while you may be passionate about your personal insurance brand, consumers could care less. They only care about what it means to them.

There’s a level of humility that needs to play its part here. Often the cognitive bias within a company can hinder results like these. 

The key to achieving results like these is to align with the consumer's belief system rather than waiting for the action stage of the buyer cycle. One is emotional, the other is logical.

If you wait for a buyer to search for insurance you often have to compete on the same grounds as everyone else. 

So how was this process completed and optimised?

Meet Sarah, a potential car insurance buyer

Image1

In Image1 we see the buyer persona of Sarah. Sarah was identified as one of several buyers our insurer was targeting.

Many a marketing team has created a buyer persona much like this, but you’d be surprised how many times this critical piece of work is disconnected from the language or the tactics used to find them online.

To rectify this its advised you birng in external consultants who don't see you in the same light. Bringing in an external team pays dividends because there’s no political alignment and less cognitive bias. Preferably a company who focuses in your category (ie. don’t ask an ecommerce specialist to advise on buyers of finance).

A visible buyer persona helps you build rapport and empathise with the buyer. So place it on the wall in your office.

The buyer persona has two parts. The known attributes and the unknown motivations. In Image1 are displayed Sarah’s known attributes.

Because you may have multiple buyers and will build out these personas to reflect your audience the goal is to -

  1. Determine commonalities from within different buyer types.
  2. Define the motivations of each persona.
  3. Create a unified and effective channel strategy.

If you’re at the point of creating a Channel Strategy download this Go-To-Market Strategy eBook. But right now, if you’re still at the stage of identifying your buyers the channel strategy or go-to-market strategy is a few steps further on in the process.

This is also applicable if you’ve currently advertising online and have gone back to identifying your buyers. There’s no need to jump the gun and shoot from the hip with your channel strategy yet.

Emotionally targeting car insurance purchasers

As mentioned, in the previous article we gave reasons as to why saving money, even a small amount, is an emotional decision and not simply a logical one.

The challenge of course is while every insurer seems to offer a small saving, let’s face it, it’s boring.

The key to the results in Graph 1 & 2 is we’re pitching car insurance directly at the emotional needs of the buyer.

You’re aligning your brand values with that of the buyer. It’s that moment when people are in the consideration phase of their purchase, they know the major players and they know where to find them, but then they see a provider with an aligned brand purpose and there’s the “Aha” moment.

If you need help with your brand download this eBook on connecting your brand to buyers.

It’s exciting when you get it right. To do this you need to do the groundwork by creating your own buyer personas and discovering the need, pains and gains of each buyer. Or their motivations, goals and frustrations.

If you want to create your own buyer persona download this buyer persona eBook.

Image2 includes how you can represent the Unknown Motivations in a buyer persona. 

Image2

Defining this information will present your first challenge in identifying your buyer. If you get this right, you’ll know how to start the conversation and come to understand the reason behind the reason.

Where are the opportunities in car insurance?

The car insurance category is crowded. That would be the consensus given the noise in the category. But as you’ve seen there are opportunities in specific niche markets. Image3 identifies some perceptions in the category and discusses the opportunity in each.

Image3

Category competition – There are many highly visual insurers competing for consumer attention in online and offline channels.

Opportunity – Niche markets can speak emotionally, create cut through and drive consumers to want to do business with you.

Cost per Acquisition – While most personal insurers accept the cost of starting a conversation is high, with multiple phone calls to follow, what consumers seek is significance. Most companies can offer significance once the phone call connection is made.

Opportunity – Significance should be established prior to the phone call. This lowers acquisition costs, speeds up the sales process and can reduce churn.

Brand importance – For the major players brand recall is critical because they all compete for eyeballs at dinner time.

Opportunity – Brand purpose becomes just as important as brand recall.

Channel diversity – For most, buyers range from consumers in their 20’s to into their 70’s. While the channel strategy is the same, the tactics may vary for each age group.

Opportunity – Targeting niche markets allows you to unify your message and be ultra-relevant.

Asset quality – Most insurers would say their phone calls are better qualified and this means the digital assets can be less sophisticated.

Opportunity – Emotionally connecting with buyers covers a multitude of digital sins. Doing so can drive people to the phone and become a better qualified lead.

Steve Palmer

Steve Palmer is the Joint Founder and CEO of Showtime Digital. Steve has been in B2B sales since 1997 but influencing people and behavioural science has been a long-term passion.

The magic he brings to his clients is in knowing how to engage their audience. His goal is to help businesses understand the deeper reasons of why consumers convert online with them.