Complete Guide to using Direct Mail Marketing forInsurance Companies
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Complete Guide to using Direct Mail Marketing forInsurance Companies
A Complete Guide to using Direct Mail Marketing for Insurance Companies
Modern digital marketing is competitive, to say the least. And several reports suggest how the insurance sector is lagging behind other industries in reaching its target audience due to a paradigm shift in user expectations.
And to make matters worse, the average customer acquisition cost (CAC) across industries is at an all-time high. The insurance industry, especially, has one of the highest average CAC of about $900.
So while businesses fight to be seen, what can insurance companies do to stand out and draw in customers?
It’s time to go back to the one underrated marketing strategy - direct mail marketing.
In this guide, we’re going to tell you all about the status quo challenges insurance businesses face in marketing and why direct mail marketing is the next step for them.
Table of contents:
What is direct mail marketing in insurance?
What are the benefits of direct mail marketing in insurance?
Direct mail marketing tips and best practices for insurance.
How to get started with direct mail marketing for insurance businesses.
What is direct mail marketing in insurance?
Direct mail marketing is a direct response technique companies use to physically deliver direct mail communication to a consumer’s mailbox.
For insurance companies, direct mail marketing can include sending postcards, handwritten notes, brochures, coupons, etc., to their prospects and customers.
Marketing challenges faced by insurance companies
Before we dive into why you should consider direct mail marketing for insurance companies, let’s take a quick look over the status quo of marketing challenges:
1. High competition
The global insurance market is massive. Every country and state has many insurance companies sprouting up in every nook and corner. Add to that agents who liaison with these companies. So the competition to stay visible to your target audience and be chosen is obvious. It calls for a revamp of marketing methods to stay a step ahead of your competition, understand potential client needs clearly, and tailor your content to build trust.
2. Poor customer experience and loyalty
Customer experience can make or break loyalty. Insurance companies find it challenging to hook customers with interesting, engaging and human experiences. Since these purchases need to be more ‘informed’ instead of ‘impulsive’, it needs insurance companies to make prospects feel comfortable interacting with them and build stronger relationships with their existing customers.
3. Lack of proper communication
Most companies find attracting high-quality prospects while running their marketing strategies hard. Owing to the increase in the amount of content shared across digital platforms like social media, entertainment consumption has increased over time. But when it comes to insurance products, it’s important to get across the smallest of details that can help consumers make the right purchase decision - digital platforms no longer consider this information ‘entertaining’ enough.
4. Changing user demographics and behavior
Users’ preferred insurance policies can vary depending on their demographics, such as age, location, job, income, etc. Such constant changes lead to insurance companies failing to target the right audience precisely over digital platforms. This often results in mass marketing tactics like broadcast messages, emails or social media advertising - this is also one of the leading reasons behind the ever-increasing customer acquisition costs.
How does direct mail marketing work in insurance?
Potential insurance purchasers are constantly on the lookout for the best policies and compare providers before zeroing in on one.
While there’s tough competition to market your insurance policies online, direct mail marketing is a shortcut to directly reach your target audience and push them to book an appointment.
Insurance companies can use direct mail marketing from a promotional perspective as well as to communicate and stay in touch with their existing customers.
Let’s look at an example to explain how direct mail marketing works in insurance:
- The insurance company identifies their target audience and shortlists a product or service of value to them - this can include identifying different product/ service offering for different segments of the target audience
- They create physical promotional material that highlights the value of the product or service they want the audience segment to know about - this can include brochures, pamphlets or handwritten notes, based on the extent of the campaign and the material they want to promote
- Once created, the insurance company then sends out the direct mail via post - this may also sometimes include working with local daily essential companies like newspaper services for the distribution
Do mailers work in insurance?
The short answer is yes.
Direct mail may come across as conventional and outdated in this digital day and age, but statistics prove otherwise.
A massive 73% of US insurance customers said they prefer receiving direct mail for all sorts of communications, as per a report. And this preference is not far behind with younger audiences. The same report suggests millennials, almost 57%, prefer direct mail, too.
These numbers reiterate the need for insurance companies to include direct mail marketing to attract new customers.
What are the benefits of direct mail marketing in insurance?
Let’s take a look at some of the benefits of direct mail marketing in insurance to make it one of the most effective strategies for company growth:
1. More personalization
Unlike paid marketing, such as ads or push notifications, direct mail is more personalized as it addresses each recipient by name and includes relevant messaging they can relate to and engage with.
Building such a personal connection increases the possibility of the recipient responding to your call to action, such as booking an appointment, dropping an inquiry, etc.
2. Better targeting using demographic data
Targeted marketing using demographic data and other criteria lets you reach customers who are actually interested in your insurance-related offerings. You could also promote your online marketing efforts by including your social media, email, and website information in each mail.
3. Customers keep you on top of their minds
Consistent direct mail with exclusive, educational, and interesting information is a great way to keep in touch with your prospects and customers. It also opens doors to referrals and repeated clients and of course, building better brand recall in a competitive market.
Types of direct mail marketing campaigns in insurance
There is no one way of using direct mail marketing in insurance. But here are some of the most common types of direct mail we see companies create and send with IgnitePOST:
1. Postcards
Postcards with handwritten notes are the most commonly used type of direct mail marketing by insurance companies. That’s because they are affordable yet highly effective.
Handwritten postcards add a personal touch to otherwise bland marketing communication. IgnitePOST helps insurance agents and companies send customized handwritten postcards automatically to clients in the most cost-effective way.
2. Brochures and catalogs
Direct mail brochures or company inserts lets you simplify communication with your prospects. With brochures, you can include rich information in the form of charts, graphs, images, testimonials, etc.
Catalogs can list all your insurance services or policies for recipients to compare and finalize the deal.
Brochures and catalogs help attract the recipient’s attention and stir them to look through the entire mail to understand your offer better. You could also extract the recipient’s demographics and personalize brochures to meet their needs.
3. Envelope letters
Enclosed envelope letters are far more professional than postcards. They are used for sending more confidential insurance-related communication due to their security.
4. Lead magnets
When done right, direct mail marketing for insurance companies is the perfect lead magnet. Understand your target audience and provide relatable information on preferred topics or policies.
5. Follow-ups
Suppose you failed to convert a high-intent lead over a call or in person. Using direct mail as a follow-up channel can increase your chance of a conversion.
Due to higher open rates of about 99%, direct mail follow-ups are more effective than digital marketing methods, such as emails, with hardly 22%.
Direct mail marketing strategies for insurance companies
1. Postcard marketing
With envelopes, letters, or emails, you’re constantly worried if the recipient opens them and checks your message. But with a postcard, communication is more direct and unavoidable.
Here are some perks of using postcard marketing as your direct mail marketing strategy:
- Postcards are the most versatile — The limited space available on postcards does not stop you from being creative with your messaging. You could use compelling calls to action, creative copy, and rich images to attract the user instantly.
- Increase your website traffic — You can add a QR card on your postcard that users can quickly scan and be taken to various insurance products or services on your website or landing page.
- Use handwritten postcards to increase conversion — Handwritten notes on postcards humanize your offering and leave a lasting impression. Send handwritten thank-you notes, seasonal wishes, or exclusive offers to increase conversions and loyalty.
Like any other marketing strategy, you should consistently send regular postcards and follow-ups to encourage customer engagement.
2. Handwritten direct mail marketing
We’ve spoken about the huge difference handwritten notes make in building a personal connection. Adopting it as a direct mail marketing strategy makes it easier for insurance companies to convert prospects cost-effectively.
Here are some more reasons to use handwritten direct mail marketing:
- Recipients can understand policies better — Handwritten notes come in handy to explain policies and rules in a more friendly manner. Unlike marketing channels such as emails, landing pages, or calls, they come across as less overwhelming.
- An affordable marketing strategy — Paid marketing is expensive. And the ones that are free, like emails or web pages, are more competitive. So handwritten marketing stands out due to its high open rates and cost-effectiveness.
- Encourages repeat engagement — Most insurance policies, for instance, are subject to renewal. Handwritten notes are a great way to remind customers and drive them to renew their policies.
Handwritten notes for insurance companies can be used to promote policies, follow up, welcome new customers, send thank-you notes, and request feedback.
3. Direct mail marketing through magazines
Branded magazines for marketing can be used to impart valuable information through engaging visuals. They let you advertise your flagship products in detail and let recipients familiarize themselves with your business and the insurance industry as a whole.
You could also pack in exclusive deals, personalized gifts, or interesting games to increase engagement. Magazines encourage word-of-mouth marketing. Sending magazines consistently on a fixed date helps build a solid connection with your audience and encourages high-quality referrals.
Direct mail marketing tips and best practices for insurance
Here are some tips and tricks for your next direct mail marketing campaign:
- Write captivating and actionable copy — Persuasive copy on your direct mail should urge the recipient to take immediate action. Use powerful words for calls to action, simple language to maintain reader flow, and, most importantly, address any doubts recipients may have with your copy.
- Add customer testimonials — Social proof builds trustworthiness. Potential customers trust recommendations from people like themselves rather than salespeople.
Therefore, using your customers’ voices and adding testimonials in your copy is the best way to convert confused readers.
- Say it with numbers — Numbers are better at grabbing the reader’s attention than wordy sentences. So use them to your advantage, for example, add assured savings in percentage, total insured amount, etc.
- Use cross-channel marketing — You could tie in other marketing channels, such as social media, websites, or newsletters, in your direct mail communication. For instance, add a QR code or social media handles for customers to access seamlessly.
- Prioritize personalization — The whole idea behind direct mail is to let recipients connect better with your products and services. And personalization can take it up a notch.
Increase the likelihood of conversion by segmenting your target audience and catering to their specific needs.
- Consider timing for best results — Timing plays a huge role in fetching high response rates. For instance, direct mail during the holiday season has the highest chance for recipients to check their mailboxes and respond.
- Keep leads list up to date — Ensure you regularly maintain and update your direct mail insurance leads to deliver accurate information to the intended audience.
- Automate your direct mail marketing campaigns — Insurance companies deal with policy renewals within deadlines that need customer reminders. In this case, automation works best to ensure the direct mail is sent as a reminder at the perfect time.
How to get started with direct mail marketing for insurance - step by step
Step 1: Define your target group
The secret to receiving high response and conversion rates with direct mail campaigns is being as specific as possible with your messaging.
Considering the numerous insurance types, defining a specific target group and identifying an ideal customer persona are key to collecting quality leads.
Step 2: Define your goal
By identifying a goal, you can have a clearer idea of your direct mail format, whom to target, needed budgets, and so on.
Some common direct mail marketing goals for insurance companies are increasing inquiries for a specific policy, introducing recipients to newly launched services, increasing sign-ups, boosting brand awareness, and promoting a particular policy.
Step 3: Create your direct mail and prepare content
Choose your preferred direct mail type, such as postcards, envelopes, brochures, handwritten notes, etc., in this step. Ensure it aligns with your set marketing goals.
Start creating valuable content for the direct mail so that it resonates with your targeted group while also matching up to your branding.
Step 4: Choose the right tool
The perfect tool must offer you the flexibility to customize while saving you time and money spent to send direct mail.
IgnitePOST is one such tool in the market to create and send personalized direct mail by leveraging automations and robotics at an affordable price.
Step 5: Send, measure and optimize your approach
Finally, send automated direct mail to the targeted group.
Just like any other marketing channel, direct mail responses must be tracked and optimized to learn what needs improvement and what works.
You can track real-time metrics such as the number of responses, appointments booked through direct mail, the number of scanned QR codes, total website visits, used discount codes, etc.
Conclusion
Direct mail is an untapped opportunity for insurance companies in the current saturated market space. When done right, direct mail marketing lets your insurance company dominate competitors and shine through.
Not sure if direct mail marketing works for insurance companies?
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