The social media buzz talk is getting tired, if not already stale. Some think it should be taken to the next level – beyond conversations and customer feedback – to social commerce. Can social media prove its commercial viability in the insurance industry? We weigh in with a few insurers on their views.
The answer is “yes”. But before detailing why, the first question that begs is: what is social commerce? According to a recent Social Commerce IQ (SCIQ) report, social commerce has changed rapidly, from electronic commerce (e-commerce) transactions on social networks, to a focus on empowering people to discover new product ideas from one another while shopping.
“In our view, social commerce is more than purchase transactions coming through social media platforms. It encompasses all pre-purchase information gathering that social media facilitates and has a great influence over consumers,” said Ms Veronique Meffert, Head of Group Digital Marketing at Great Eastern Life Assurance.
She added: “Social commerce also encompasses tools like user ratings, feedback management and user-generated content on products and services experienced during and after purchase. And in that sense, social commerce is very relevant to our space.”
S-commerce: new and evolving
Mr Kenneth Chan, Head of Digital Marketing – Asia, Sun Life Financial Asia, said that the insurer has also been following the emergent trend of social commerce, or “s-commerce”, with great enthusiasm. The trend is still in its early stages and evolving, however he said it offers an interesting opportunity for businesses like theirs which pride itself on differentiation through understanding customers and providing them with a high level of service.
The industry can draw learning points from website examples like Pinterest and Polyvore which focus on inspiration and product discovery, enabling shoppers to browse and connect with people with similar interests and tastes. “These platforms are doing well, especially when we look at the average order value (AOV) [generated],” he said.
Ms Cherry Koay, Head of Marketing for Tune Insurance, said that as information needs constantly change, so will the insurer’s “journey evolve and lead to different content, places and devices”. The consumer-to-consumer (C2C) model will replace business-to-business (B2B) and business-to-consumer (B2C) as the most important model to reach customers. “‘Story-tising’ will replace traditional advertising as the lead form of media,” she added.
Intangible benefits
That being said, do not expect social media to be generating monetary returns anytime soon. Instead, social media-savvy players are looking at the intangible benefits to be reaped, while more material benefits will follow in the long
run.
“Social media plays a key role in the digital strategy because of its close reach to a high concentration of people who provide a very powerful form of peer influence, which is a key for s-commerce. It has the potential to provide a channel and platform for recommendations – something very important to our business and more broadly, the industry,” said Mr Chan.
Leveraging on the use of social media in the digital marketing mix will allow insurers to learn about where they need to evolve, as well as engage with customers to educate them. “Social commerce will ultimately follow if we can get involved in consumers’ social conversations in a relevant and engaging way so that they will recommend our brand to their peers favourably,” he added.
Concurring, Ms Mareike Berkling, Head of Online Communication at ERGO, said users of social media definitely have an influence on the consumption of products and travel. “People are no longer relying on their own opinions. Reports, ratings or comments provide a compass for a range of decisions in our lives. There is thus no question of whether we should or should not be present as a company on Facebook and other networks, the question is rather – ‘how and how much?’ and it is a question which concerns us in ERGO,” she said.
Closer engagement
For Tune Insurance, the use of social media could also prove helpful in its efforts to rid insurance of its “boring” reputation of needing to be sold and not bought.
“The ‘Gen-Y’ consumers seem to relate their lifestyle via social media and we need to understand their needs before offering any solution, which we can do more effectively via social commerce and innovative analytical tools,” said Ms Koay.
As such, the online insurer intends to use on-board social media to create a platform for independent agents, consumers and potential customers to share ideas and experiences, among other plans. Their ultimate position – to translate leads to a sales ecosystem fully, online.
Similarly, Great Eastern has taken great strides in using a variety of social media platforms for longer term engagement. “Our business is really about trust, and social media is a great tool to build that,” said Ms Meffert. However, the entire organisation needs to be aligned in vision, and the transparency which social media brings should not be feared, but seen as the positive force allowing insurers get closer to consumers and vice versa, she added.
Ms Berkling said: “Dialogue with our customers is of the utmost importance to us in social media. We would be delighted to see customers and interested parties play a more active role in communities discussing insurance products and are keen to take part in the relevant debates ourselves.”
Recruitment option
But engagement does not stop there. Another ideal position that insurers are looking to achieve with social media is to build up employer branding; social media may well serve as a viable option to tackling the talent crunch in the insurance industry.
Ms Berkling said ERGO hopes to promote a positive employer image, “in particular by giving us better access to employees and young target groups”. Apart from using social media to provide an additional medium for communication and increasing client loyalty by offering new options for interaction and feedback, she added that her company hopes to use the platform as a new form of HR marketing for recruitment openings.
Ms Koay said: “Moving forward, we also plan to use off-board social media such as Facebook and LinkedIn to develop a recruiting presence, especially among Gen-Y. The younger generation are more likely to use and/or frequent these sites.”
Social media is commercially viable
So, can social media prove its commercial viability in the insurance industry? The answer is “yes”. However, it must be noted that “social commerce is not a click-to-buy link that is next to an offer on Facebook”. Start with a clear customer strategy and work technology in to support it, rather than defining the product and customer strategy based on the platform, said Mr Chan.
He added: “We believe it is necessary to start with a ‘social commerce sales funnel’, rather than a pure commerce function. At the wide end of the funnel, content marketing, inspiration and product discovery engage the customer; further down, add a focus on advertising, referrals and retargeting; and at the end of the tunnel is where the offers, ‘like’/’tweet’ to buy, shopping cart and loyalty features come into play.”
There is clearly a lot more that insurance marketers can and should do in social media. However, the insurance industry has yet to widely embrace these new trends. Be it social commerce or product discovery, meaningful conversations need to be created if public perception and attitude towards insurance is to be improved. “The road ahead is a long one, but the ball has started to roll,” said Ms Meffert.
To the insurance industry, the social media trend may still be a relative puzzle of digital platforms and online interaction. Hence, we present below a visual map developed by Brian Solis, a principal at Altimeter Group, which is a research firm focussed on disruptive technology, as well as explanation from his website that would hopefully provide a clearer overview of what social media is, and perhaps even spark an idea on your next social media strategy.