4 ways technology can help carriers acquire new customers

As property and casualty insurance carriers look to reduce growing loss ratios in 2022, many have shifted their focus away from growing their customer bases and toward increasing their profits. But for carrier marketers, the path to efficient customer acquisition isn’t as simple as merely cutting budgets.

That’s because a hard market frequently inspires carriers to raise rates in order to earn more revenue from their existing customers. And when consumers’ rates go up, many begin shopping for a cheaper plan. The upshot? If carriers aren’t investing enough budget to sign up new customers, they’re not just missing out on an influx of new shoppers—they also risk a shrinking book of business as their existing customers depart in search of lower rates.

Data-driven digital marketing empowers carriers to continue acquiring customers, but to do so as efficiently as possible for maximum profitability.

Here are four key principles and tactics for carriers to keep in mind as they focus on profitable, efficient customer acquisition in a hard market:

1. Make targeted spending cuts instead of cutting across the board 
At times when insurance carriers are looking to reduce marketing costs, they sometimes decide that they need to reduce their overall marketing spend by a certain percentage and cut every piece of their budget by the same amount. This strategy hurts them in the long run since they invariably wind up reducing spending equally on channels and consumer groups that were performing for them and those that weren’t.

Make cuts with a scalpel instead of a machete. Rather than making across-the-board cuts, it’s best to identify what’s not working and begin trimming the fat there.

2. Use the right measurement tools to assess performance
In order to identify the parts of your marketing plan that are working, collect and report metrics that accurately assess performance. A key first step is to implement a tool that ties marketing data to sales data. This will reveal which ad clicks led to actual policy sales and how much was earned in premium revenue from each new policy.

Measurement can go one step further by measuring the true return on investment with a metric known as lifetime value to customer acquisition cost (LTV to CAC). LTV to CAC compares the revenue earned from a consumer over the course of the entire relationship to the costs paid to acquire them. This enables carriers to measure how each kind of consumer impacts long-term profitability and identify the shoppers that are really helping grow profit margins.

3. Bid granularly to pay the right price for every consumer
Once the measurement is squared away, identifying the segments of a target audience that are most and least profitable for your business is possible. This will help to adjust bidding accordingly. For instance, try breaking out performance by the publishers your website visitors arrived from and the channels those publishers acquired their traffic from (e.g. organic search, paid search, social media, etc). Then, raise the bids for more valuable consumer groups and lower them for those that are less profitable to your business.

This transparency into channel performance is crucial for assessing the value of the different kinds of shoppers you’re targeting, but it’s not the only variable that can be predictive of a consumer’s value to your business. Also try splitting out consumers into different zip-code tiers based on the profitability of shoppers in different locations, or setting different cost-per-acquisition goals for consumers with different driving records based on past performance.

4. Drive higher conversion rates with pre-filled forms
Paying the right price to bring the right consumers to your website is only one piece of the puzzle—improving efficiency can also happen by ensuring that the quote flow is optimized to maximize the conversion rate.

One way to do that is to alleviate a major hurdle for online insurance consumers: the time they spend filling out forms to receive a quote. The average consumer requests around three quotes before purchasing a policy, so it’s possible that a shopper has already gone to the trouble of completing several lengthy quote forms on carrier and comparison shopping websites prior to arriving on your site.

By implementing data passing, you’ll be able to receive the information that the consumer submitted on the referring website. As a result, the user sees a pre-filled quote request form on your site, making them more likely to complete the process and purchase a policy. Based on previous implementations, we’ve seen a 30% lift in quote complete rate with this one integration alone.

Maximizing efficiency is a tall order for any marketer, but implementing these techniques is the best way to get the absolute most out of every marketing dollar at the bottom of the funnel.

Indeed, while brand advertising is an essential part of any marketing mix, there are so many touchpoints between inspiring a consumer to shop for insurance and earning the final purchase that shoppers often veer off course. By contrast, saturating the bottom of the funnel with an intelligent digital marketing investment enables finding and attracting consumers, at the right cost, just as they’re getting ready to make a purchase.

A hard market doesn’t mean stopping growth. It just means focusing on measurement, granular bidding and maximum profitability.