When’s the last time your agency updated its referral marketing process?
When KnownCircle, a social referral network from SocialTwist, released the “2015 Insurance Marketing Survey: Generation New Business with Referrals and Social Media,” it found that 80% of agents rely on informal requests to generate referrals—a traditional tactic that does not meet today’s shifting consumer demands.
Gathering the bulk of its data from independent agencies (65%), the survey reveals that nearly 50% of agents recognize social media is the best channel for attracting millennial customers in particular. But only 30% engage with customers via social platforms. “[Agents] haven’t gone far enough in social media tapping into the full capabilities or leveraging social media to generate more business,” says Vinay Murthy, co-founder and vice president of business development at KnownCircle.
More than 60% of agents have a social page or profile, and they’re slowly beginning to leverage social platforms through advertising (30%), engagement in group discussions (25%) and marketing their agency (23%). But a third of respondents said they had no social media presence whatsoever.
“The trends are very clear—consumers are on social media and on mobile devices,” Murthy says. “But they don’t see agencies there. That’s the gap.”
And it’s a big one. A Goldman Sachs study reports that 38% of millennials use social media to communicate to others about a service, product or brand. In its new eBook “Why Millennials Matter,” Applied points out that half of Gen Y seeks referrals from friends and family before buying insurance. The initiatives work: A SocialTwist study, “The Connected Consumer,” finds that financial service firms with a social referral marketing program amplify their message by 15 times, resulting in 10% new customers per campaign through the brand’s program.
The potential impact of a social media campaign expands further when you consider social media as an area where independent agents have a direct advantage over their competitors. Murthy says captive writers are bound to corporate social media constrictions, which limit them to using very specific platforms and sharing posts that often feel canned.
“It’s a lot harder for captive agents because they’re bound by what their corporations are telling them to do and not to do,” Murthy says. “Independent agents have a lot more flexibility and freedom to explore and expand with new services.”
But to leverage the opportunity, “they need to start immediately,” Murthy says—especially since more than half of agents receive 40-60% of new business through referrals. “The bigger guys have been leveraging it for a number of years. They are pushing the boundaries of social media, whereas insurance agents are barely using social media.”
While the most basic level of digital marketing involves a digitally optimized website and social media profiles, Murthy advises agents to start by swapping traditional marketing—cold calls, traditional advertising, word of mouth—with social media marketing.
“[Agents] have to take more of a long-term strategy on social and mobile,” Murthy says. “They need to understand more dynamics and what they can be doing beyond setting up a page. For social, this is something they have more control over and can actually express the value they’re offering to their customers.”
After working on a number of social referral marketing campaigns, Murthy says he sees “a strong correlation between automation, incentivizing and seeing results.” And if money, time and resources are an issue in existing workflow, he encourages agents to consider outsourcing marketing or hiring a digital marketing guru to increase online traction.
“There are a number of things that can be done from an independent agent’s perspective, but the question becomes: Why aren’t they doing it?” Murthy says. “For that, I don’t have a good answer.”
Morgan Smith is IA assistant editor.