A new study has shown that companies spending on marketing investment and technology usage emerge the winners when it comes to attracting new customers and selling policies — but not so much when it comes to keeping the customers they already have.
The joint study “The Techsurance Marketing Revolution,” from Velocify and Insurance Technologies Corporation, found that insurance agencies need to react more quickly as customers increasingly turn to online policy shopping and compare multiple quotes.
Insurance agencies using marketing automation technology, the study found, sold more policies per producer and per household, on average, and that agencies that spend more than 10 percent of their revenue on marketing were more likely to experience significant growth, regardless of their size or type.
However, the study also found that, as the percentage of revenue spent on marketing went up, customer retention rates decreased. This shows that growing agencies may need to make commensurate investments in customer retention and satisfaction initiatives as they scale their marketing budgets.
When it came to the return on marketing investments, the study found that agencies investing in paid marketing channels could grow faster than agencies relying heavily on their existing book of business. It also said that agencies spending less than 5 percent of their revenue on marketing are almost three times more likely to experience flat revenues than they are to experience significant revenue growth (more than 20 percent year-over-year rise).
In examining the return on technology investments, it revealed that marketing automation users sell 20 percent more policies per producer, and 10 percent more policies per household, on average.
In addition, combining the impact of lead management (which drove 43 percent more policies per producer and 13 percent more policies per household) and marketing automation helps agencies leverage marketing automation to get customers to the buying stage, and also helps lead management to become more effective in contacting, quoting, and converting more leads into policies.
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