Traditional marketing methods won’t cut it when targeting the 18 to 24 year-old market. But the rewards are there for brokers that can get it right
It is no surprise that the younger you are, the less importance you attach to insurance. According to the Motor Insurers’ Bureau, one in ten 18 to 24 year-olds are not even aware that you need insurance to drive.
But as young adults get their first car and move out of their parents’ home, they join the pool of prospective customers that brokers can tap into. And while initially their insurance spend may be quite small, such as contents-only cover as a student, over time their insurance needs will develop and expand. Getting in early with brand recognition and loyalty could pay dividends later.
So what can insurance brokers do to attract today’s web-savvy ‘Y’ generation? Targeting this end of the market requires a fresh look at marketing techniques and channels. One success story is that of Comparethemarket.com, whose Aleksandr Orlov the meerkat has 700,000 Facebook fans and 40,000 Twitter followers, which shows it is possible for the industry to tap into this younger demographic, if done the right way.
Create the conversation
Such meerkat-inspired numbers may only be possible with a huge marketing budget, but smaller firms can still learn lessons. The key is for brokers to go where young people are, rather than expecting teenagers and twentysomethings to search them out – and this will inevitably involve the internet. Brokers also need to work hard to appeal to the interests of this younger group, and that will almost certainly involve doing everything except talking about insurance.
“You need to be able to create compelling conversations,” Harvest Digital’s planning director, Mike Teasdale, says. The online agency works with companies such as GoCompare and Liverpool Victoria. “People aren’t interested in car insurance, so you need to move the conversation to what people are talking about.”
Setting up blogs and online forums based around travel destinations or pet care issues rather than simply travel or pet insurance products, for example, could work well.
Social media like Twitter and Facebook are also promising settings for these conversations, but few brokers have successfully tackled this area. One reason, according to marketing experts, is a fear that insurance is the wrong kind of product for such campaigns.
“They think they’re not particularly exciting; they think it’s for the Nikes and the Cokes of this world,” Tamar associate director Henry Elliss says. The online advertising agency’s clients include Endsleigh and Towergate.
Another more serious concern is the difficulty in ensuring everything meets FSA standards. In June, the authority warned that new media outlets were no different to any other media when it came to regulation. It issued the update after reviewing the activity of about 30 insurance companies on Twitter, Facebook and other sites, where it found that some promotions didn’t meet its rules and lacked risk warnings. Companies thinking of using Twitter, for example, were warned the 140-character limit on messages “may be insufficient to provide balanced and sufficient information”.
However, the FSA didn’t say that brokers should avoid the territory entirely – and even found some examples of good practice.
In fact, brokers should find a ready audience once they become comfortable with what can be done on these sites legally. Insurance may not be the most exciting consumer product for 18-24 year olds, but they do talk about it, even if only to moan: it is clearly in the interests of brokers to deal with the issues that people raise online.
“You can be sure that people are talking about you, even if it’s bad. And if they are talking about you, you should be responding,” says marketing agency Gravytrain’s head of search Hannah Smith.
Managing customer relations is an area with huge potential for brokers. “Brokers should be more reactive,” says digital agency Latitude’s chief operations officer Richard Gregory. “All these conversations are out there to be found. If people are talking about renewing their insurance, then you as a broker can get involved. Treat it like a conversation you’d have on the phone.”
For a broker that can create the right level of engagement, there are other spin-offs. Developing strong content through blogs and other devices will help push a broker’s website up the search rankings, reducing the need for expensive keyword advertising and making it easier for prospective customers to find you.
But going online does not always mean that a broker has to radically change their advertising strategy – there are straightforward ways to adapt existing campaigns. The online music service Spotify, for example, has predominantly young listeners. Its entry-level service places ads between songs in a way that is little different to radio advertising.
You can also place standard banner ads on social media sites, without the need to engage in any conversation with users. The added advantage of this approach is that the ads can be tailored to match specific groups of people. On Facebook, for example, advertisers are able to direct their messages based on users’ age, location and interests. “People using Facebook give away so much information that you can target ads really well,” Gregory says.
Other tools such as email and SMS marketing are also important in keeping current customers and can be used for renewal reminders. Unlike older groups of customers, the18 to 24 year-old age group accept that financial firms will use such methods.
Attention to detail
The time and money that the likes of Gocompare or Comparethemarket devote to their online activities is prohibitive for most brokers, but the scale of activity only needs to be as large as the firm can manage – and can be carried out alongside existing marketing aimed at older people.
“If you’re a fairly small broker, the amount of time you need to devote to it is fairly limited,” Elliss says. “If you’ve got someone who answers these questions on the phone, then it isn’t a big step to do that on Twitter or respond to a Facebook status update. There’s bound to be some of your customers there.”
However, it is also important to know what not to do. Compared to traditional advertising, the internet is more often a two-way conversation with customers, and the broker needs to stay active for it to work.
“Facebook is littered with pages from insurance companies who set it up and then wonder why no one is coming,” Elliss warns.
That’s not a problem for Comparethemarket, but it could be for other companies who take less care in their approach. IT