PATRICIA VOWINKEL, who has worked for national media outlets for more than 20 years
Just as today's newest generation of employees expects business applications to work like Facebook, today's consumers expect to find information about companies and their products and services on Facebook as well.
Many insurers are already testing the waters in the world of social networking, according to research and consulting firm Celent in its report "Leveraging Social Networks."
In the United States, nine of the top 10 nonlife insurers have at least one Twitter account, and eight of those have at least one Facebook page, according to the report.
Insurers such as Nationwide, Allstate, The Hartford, Berkshire Hathaway and Progressive are among the insurers that are building followings through Facebook and Twitter.
As they build their followings, most insurers expect to increase their marketing spending on social networks in the next three years, according to another Celent report, "Digital Marketing in Insurance."
Insurers are using these sites to build their brand and to engage with customers in more interactive ways.
"Social networking is a growing channel and will be key to brand awareness," the Celent authors wrote.
"Today, there are three principle reasons for participating in social networks: they are a cheap method of advertising; they are growing as a communication channel to customers; and they are increasing in influence," the Celent authors wrote in "Leveraging Social Networks."
Successful social media campaigns can drive increased customer traffic to the brand, solidify relationships with existing customers and increase new business. Insurers also will increasingly use public shared data to inform pricing decisions and create new products as more customers become comfortable with the concept of sharing information about their behavior and location. Social media data could also aid in fraud detection, according to Celent
The principal promise of social networks is the free, automated word of mouth, according to Celent. Ten years ago, successful TV advertising campaigns would be discussed at water coolers in offices. Now TV advertisements are posted on YouTube and Facebook for free--often by customers.
The approach taken in the United States to Twitter, Facebook and YouTube is very similar across the key players, Celent reported. In each case, content is posted to each social network consistently. Comments made publicly are responded to swiftly and through the channel by which they arrived.
Some insurers had made use of a YouTube channel with their advertisements and some other informational videos hosted. Also some insurers have a progressed to a presence on the photo-sharing service, Flickr.
The trend of customers seeking advice from friends and others in their community will increase, Celent said. Customers with large networks and a significant amount of influence may benefit from preferential rates and better service because their comments will lead to better search engine results for the brand. Customers who associate with poor drivers, criminals and friends involved with fraud may find that they pay a higher premium or are not offered insurance.
For their part, customers also rely on social networks in making decisions about purchases.
"Customers will increasingly use social networks in pricing decisions and to engage with organizations for services," Celent authors wrote. "An insurer that fails to engage in social networks has little influence on this content and misses the opportunity to engage with customers."
October 1, 2010
Copyright 2010© LRP Publications