Has the handshake become passé? Not at all, say insurers. Stick with some traditions, but ignore new ways of social networking at your peril
To tweet or not to tweet? That’s a question facing the industry as the popularity of social media platforms such as Twitter continues to rocket. People are flocking to cyberspace where the ability to connect rapidly and effectively equals power – look at the blanket coverage Hollywood star Ashton Kutcher is getting for his race with network giant CNN to see who can first attract one million followers on Twitter.
More importantly, social media has become a mainstay of everyday life. Why bother making phone calls or leaving the house when you can reach a live community in seconds via the web?
It is this attitude that poses a challenge for the insurance industry. According to Forresters, nearly four out of 10 motor and life insurance buyers visit social networking sites while Facebook attracts 70 million active users every day. Figures released by Nielson Online show that Twitter traffic has soared from 135,000 last year to 2.5 million.
There are signs the industry is slowly embracing this phenomenon. AXA Insurance has 250 followers on Twitter; Swinton 109 and RSA Insurance, 82. Aviva and Churchill have pages with Facebook, both with more than 700 friends, while Zurich chief executive James Schiro uploads videos on YouTube to deliver messages to employees.
More than a fad or a niche
Antony Mayfield, head of social media agency iCrossing, warns the industry against ignoring the value of social networking. “It is not a fad or a niche. It is where people are spending time. From a marketing point of view you need to be putting a certain amount of resources towards understanding that space and understanding how you can benefit from it.”
He adds that while the industry is on a par with other financial services in terms of exploiting the potential of social media platforms, only 20% of companies are “doing really interesting things” on the web.
Roberto Hortal, RSA’s director of e-business, says the industry needs to step up its efforts. “Financial services are lagging behind when it comes to taking advantage of the communication networks that are out there. We tend to be quite late to follow things in general.”
According to Mayfield, social media can offer vital help in spotting people’s needs and identifying market niches. “A lot of insurers will find these conversations of interest when it comes to accessing information about what people want insured.”
Meanwhile, Matt Owen, head of campaigns at Direct Line, believes social media provides an ideal opportunity for promoting a brand’s image. “If it is used correctly and not as a direct sales channel, it opens up conversations with both customers and non-customers in an environment within which they feel comfortable. It therefore has the potential to enhance brand reputation.”
However, Mayfield warns that each platform serves different purposes. Lumping the same information on each is unlikely to reap benefits. “One of things you need to learn is that these platforms are very different. You can’t just pick and choose.”
He believes Twitter, in particular, provides an excellent resource for insurance companies to communicate with customers. “People can use it well in terms of customer service; listening to complaints and then talking to people directly and quickly with a view to sorting that out.”
Aon is using the micro-blogging site as a networking tool. Kelly Drinkwine, the broker’s director of public relations, says: “Our followers are a mix of business and trade reporters and bloggers, Aon colleagues and others involved with risk management and the insurance industry. For the most part, we have utilised Twitter as a means to leverage breaking news.”
Some companies find that certain brands lend themselves well to social media. Owen says: “From our brands Direct Line … Churchill is the most obvious choice to get involved, due to his [the dog’s] friendly, dependable character – people instantly recognise him and the humour present within the brand lends itself well to social media situations.”
Think blogs before YouTube
However, simply setting up a space on a popular networking site will not automatically generate a torrent of web traffic. Mayfield believes that those who devise more innovative ways of communicating on social platforms are more likely to stand out.
“For insurance companies, looking at stuff on their website and figuring out how to make that travel through the web is more interesting than just setting up on Facebook.”
Standing out on YouTube can prove even more difficult to master. Thirteen hours of video are uploaded every minute on to YouTube, Mayfield explains.
“So if you think your five minutes is going to go viral you have to realise how much is out there. YouTube videos are more effective when accessed through people’s blogs on company’s websites.”
Some companies are enhancing profiles on traditional networking sites and creating their own media platforms to communicate with customers.
Direct Line is planning to tailor sites for customers by setting up an official blog and a forum for Churchill, in addition to other platforms. Owen says: “Something like a Flickr feed may well work for Churchill, as we have recently launched a new Churchill soft toy – so this could be somewhere for his fans to post their pictures of him.”
Insurer MoreThan has developed an online hub away from its parent site, where users can contribute articles, links and news. Hortal, a former employee of MoreThan, says this was used to attract those talking about insurance on mainstream sites.
“On Twitter and Facebook, the conversation was very fragmented. We decided to continue to try to continue these conversations by creating a space through a blogging platform.”
When it comes to networking within the industry, many believe that specific sites tailored to business-to-business communication are more suitable.
Hortal uses a networking group on Linkedin, which he believes has become a vital asset in his professional life. “It is a great to be part of conversations that many of us rarely have an opportunity to attend. It is an invite to a virtual place where I can keep my ear to the ground and take advantage of what people are doing and make sure that I don’t replicate their mistakes.”
As the world of social networking remains largely unchartered territory for the industry, the pitfalls can be many.
Relevancy is the key to success. “You have to have something to contribute to the conversation,” says Owen. “You need to demonstrate that you are of use.”
Furthermore, bombarding contacts with information could prove disastrous and alienate potential contacts or customers. Mayfield believes that it is “potentially negative” to use Twitter as a means of following anybody that mentions your product. “If we keep badgering people that are supposed to be our contacts and friends, they won’t be our contacts and friends for long.”
Split the personal and professional
It is also vital to make a clear distinction between personal and professional profiles to ensure that a company’s reputation remains untarnished. “Once a piece of information is out there it is impossible to take it back,” warns Hortal.
Others, however, remain unconvinced about the need to social network and warn that it may even detract from more important concerns. Catherine Stagg Macey, senior analyst from research group Celent, says: “Interest in social media is a positive sign of insurer interest in innovation. That said, the noise over it far exceeds its commercial value at present.”
She says that insurers should instead spend more of their time improving traditional communication methods.
And while broker Ian Mantel, managing director of Manor Insurance, has set up a Facebook page for the company, he believes it is of little value market wise. “I think Gordon Brown has shown us what an idiot you can be when you are using social media,” he says in reference to the prime minister’s recent appearance on YouTube. “It is a shop window; it is not an interactive social tool. Social networking in my book means talking to and shaking hands with people.”
But some experts believe that social media can no longer be ignored. Hortal puts it simply, “We have to adapt to how our customers have decided to conduct their lives.”
Social networking – The dos and don’ts
Do understand your networks: You need to be clear where your networks are. Once you identify communities that are relevant, you must understand how they work, understand what people do there and what are the rules
Do not slap your logo across the top of a few social spaces. Some social networks prefer to work with brands to create new features or content for the online community rather than just take money for an advertisement
Do start a blog. It can be a powerful way of joining in the networks around your brand and a good way to remain live and to learn from your networks
Do not think about selling or promotion as the key activity. A selling message pushed uninvited into a social space is rarely useful. Brands that do this are often ignored, or worse, criticised on blogs and forums
Do be live in your networks. Networks move and change all the time. If you are not listening or live, your understanding of what is happening could soon be out of date.
Source: Brands in Networks www.icrossing.co.uk
Linkedin now has more than 36 million members and adds a new member every minute
Facebook has 150 million users, of which half access it every day
Twitter traffic has grown 1,763% in the past year, surging from 135,000 users in April 2008 to 2.5 million in April 2009
More than 13 hours of video footage is uploaded on to YouTube every minute