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First Time Life Insurance Buyers
 

First Time Life Insurance Buyers

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An analysis of first time life insurance buyers, who are they, what are they looking for and how do we get them to buy from us?

An analysis of first time life insurance buyers, who are they, what are they looking for and how do we get them to buy from us?

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  • First Time Life Insurance Buyers (FTIBs) were identified as a high potential customer segment representing strong future value and a good strategic fit for DSO The Consumer Segment team has been charged with developing an innovative marketing plan to successfully capture this segment
  • Our secondary research provided us with an estimate of the market size 114,000,000 total US Households 8% buy life insurance annually (9M) 46% of life insurance buyers are FTIBS (4.14M) Buyers and non-buyers and Trillion Dollar Baby
  • We conducted primary market research (both quantitative and qualitative) in order to develop a holistic view of our target and spur growth through customer-driven insights. Objectives: 1. Validate DSO’s FTIBs target segment hypothesis against real-life insurance prospects 2. Understand life-event triggers, motivations, selection criteria, shopping process, influencers, pricing threshold, category perceptions, existing brand affinity, and other factors that affect purchase 3. Identify products, services, marketing channels, messages and tactics that are most compelling to FTIBs
  • Buyers have term life insurance While more than 30% (can’t recall+general) couldn’t identify the specific type of policy they had. Prospects don’t know which type of life policy they would buy.
  • Highly motivated to buy life insurance Plan to buy in next 6-12 months Attractive target segment Younger than existing Stonebridge customers – longer potential customer lifespan Likely in better health & better educated Higher HHI Higher coverage value and premium levels Here’s count of Term Policies currently in force in Ingenium broken down by coverage amounts. Please let me know if you need additional information. (Total Term Life policies in Force: 116,467     Under 100,000 115,823 >100,000 and 300,000 0) Count Of Active PBLIC Policies Coverage Amount 61896 $100,000 to $299,999 31 $300,000 to $499,999 48 $500,000+ 485959 0-$99,999
  • Arrival of a child About a fourth of all respondents decided to buy life insurance because they “simply realized that they needed it” but data showed that a majority of these respondents have children 0-5 Arrival of a child was the leading life event that triggered life insurance purchase They become “Planners and Protectors” Highly motivated to buy in the next 6-12 months triggered by parenthood Want to “prepare for the unexpected”, “allow family to maintain std. of living”, “have peace of mind” They envision future milestones (e.g. graduations, weddings, buying a home) They expect changes in their lives They are not motivated by aging, getting sick or dying “ Now that I have a child and another child coming, and we’re talking about college already and their weddings, I don’t want my wife to ever have to tell them that we can’t afford this because Daddy didn’t plan well. I’m determined that they will have they need. I’ve seen people who had passed and had life insurance. To me, their family’s life was so much easier. The house was paid off and the burial. It wasn’t a struggle.” - Ryan, 28, father of a young child
  • About a fourth of all respondents decided to buy life insurance because they “simply realized that they needed it”. Data showed that a majority of these respondents had children 0-5 - The implication is that while this subset did not report the arrival of their child as directly related to their insurance purchase, it is still considered a factor. Arrival of a child was the leading life event that triggered life insurance purchase Parenthood, far outpaced other life events like engagement, marriage, buying a home “ When you have a family, you want them to be comfortable even if you’re not around. Actually especially if you are not around, you don’t want them to suffer any more than they had to.” Tom, M, 34, father of young child “ If my husband who works were to die, who’s going to keep us in the house, who’s going to cover the education? You'll need money to buy you time to figure out what to do before you go on with the rest of your life.” Marilyn, F, 35, mother of 2 young kids
  • Life event triggers interest to buy Parenthood, engagement/marriage, other dependents Rising mortgage, debts, news of an expected death, sense of personal and financial vulnerability In a M/F joint-decision household where the male takes home a majority of the household income, FTIBs tend to pursue one policy for the male but the female often initiates the need for his life policy – she is the key instigator and influencer
  • Believing life insurance companies aren’t targeting them, they turn to trusted resources.
  • Prospects have a more negative attitude toward agents than recent buyers. More prospects feel agents care more about commission while buyers feel most agents are informed and helpful. More prospects prefer to apply online compared to the buyers who used an agent to purchase. Prospects go into the insurance buying process thinking they can control the process, but find it too confusing. As a result they need to find an insurance expert to help. 63% of FTIBs prospects think agents are biased, limit their options, create undue pressure and are more interested in their own commission than the buyer’s needs
  • We need to establish credibility early on as the go-to resource and cultivate affinity, create rapport and action opportunities to hook them along the continuum. “ After doing a lot of research and even sitting down with an agent, I still think my level of knowledge is at a 2 out of 5. I’ve only become more confused and frustrated. The agent is just trying to press me and said she is telling me everything I need to know. But I’m not sure. I’d rather do more looking around online without the pressure.” Rochelle, F, 30, single with no children
  • Change the way people buy life insurance by… Helping consumers understand if/why they need life insurance Providing them with a personalized insurance recommendation Demonstrating how their recommendation satisfies their needs Presenting options to keep costs affordable Putting the consumer in control so there is never any pressure Making the consumer feel smart and savvy, not lost and confused Making the life insurance buying process enjoyable
  • Understanding that we need to be different. We need to show empathy and consideration to the fact that these people are stepping into unknown territory. They want to feel like others like them have been there before. The images and lifestyles chosen MUST represent who they are and what they need. Let them know this is for them and them alone, not for their parents. This is life insurance for the next generation of consumers – they are the next generation; make sure the images clearly indicate this. The photography must be of real people in real situations. It’s not about glossy, overly happy people living the perfect dream. It’s about being quietly confident you are in complete control of your life. Yes there are stresses, but Stonebridge can help you overcome then by delivering the security blanket you need.
  • Understanding that we need to be different. We need to show empathy and consideration to the fact that these people are stepping into unknown territory. They want to feel like others like them have been there before. The images and lifestyles chosen MUST represent who they are and what they need. Let them know this is for them and them alone, not for their parents. This is life insurance for the next generation of consumers – they are the next generation; make sure the images clearly indicate this. The photography must be of real people in real situations. It’s not about glossy, overly happy people living the perfect dream. It’s about being quietly confident you are in complete control of your life. Yes there are stresses, but Stonebridge can help you overcome then by delivering the security blanket you need.

First Time Life Insurance Buyers First Time Life Insurance Buyers Presentation Transcript

  • AEGON DSO First Time Life Insurance Buyers (FTIBs) By Marion Guthrie & Scott Lill, 7/24/2007
      • The Situation - Selling to FTIBs
      • The Solution
      • Creative Approach
      • Marketing Approaches
      • Implementation and Budget
  • Market Size 46% of all life insurance sales come from first time insurance buyers (FTIBs). According to LIMRA, there are approximately 4.12M households annually who buy life insurance for the first time Insurance Sources: 2005 LIMRA Trends in Life Insurance Ownership Among US HH's/ 2004 LIMRA US Buyers/Non-Buyers of Life Insurance US HH's (114mm) Source: U.S. Census Bureau, Current Population Survey, 2006 Annual Social and Economic Supplement * Shopping for life insurance defined as meeting with agent/submitting and application 20% Feel they need life Insurance 23M 12% Likely to Buy 14M 5% Shop 6M 4% Buy 4M 114,000,000 US HH’s
  • Market Research Objectives & Design
      • Quantitative Online Survey (February 2007)
      • 1,003 U.S. adult household decision-makers - National sample, excluding the states of Alaska, Connecticut and Hawaii - Ages 20-69
      • Buyers Group, 48% (n=478): Bought first out-of-pocket life policy in past 6 months
      • Prospects Group, 52% (n=525): Planned to buy first out-of-pocket life policy in next 6 months
      • Qualitative Discussion Panels (April – June 2007)
      • 33 U.S. adult household decision-makers planning to buy first policy in next 12 months - Cherry Hill, NJ - Ages 20-45
      • Parents Group: Prospects who were parents with oldest child age 5 or younger
      • Online Group: Prospects who were highly interested in buying online
      • Supplemental Group: Prospects who planned to buy as supplement to employer policies
    We conducted primary market research (both quantitative and qualitative) in order to develop a holistic view of our target and spur growth through customer-driven insights.
  • Demographics FTIBs have HH Incomes $50k+ and are under 40. The majority are young couples with children.
      • From Quantitative:
      • Age: 66% under 40
      • HHI: 74% $50k-150k+
      • More than 75% are couples
      • 89% of buyers and 81% of prospects have children
      • Age of children: 50% with children 10 or younger
  • Product, Price Preferences Term Life Insurance was the most popular among buyers who could recall what they purchased. Consistent among buyers and prospects, the top 3 coverage amount levels are $500k+, $100-$199k and $200-$299k Prospects and Buyers plan to pay/do pay about $50 a month Here’s what they want - Term insurance, high face amounts, and they’re expecting to pay about $360 - $600 annually.
      • Attractive target segment
    A different customer - more attractive than our base Our Traditional Customer/FTIBs
      • Younger than current customers
      • With longer life time value
      • Higher HHI
      • Higher coverage value and premium levels
    • The size, scope, and spending power of FTIBs make this audience an extremely VIABLE target.
    • FTIBs represent a NEW TARGET for Stonebridge - one that can take the company in a new direction vs. its current audience base.
    • Targeting the first-time buyer represents an opportunity for AEGON to take a FIRST-TO-MARKET position in this life insurance area.
    • FTIBs are D-I-Y consumers – they are tech-savvy, like to shop online and want to be in control.
    Marketing to FTIBs FTIBs are a tremendous market opportunity
  • The Life Insurance Buying Process
      • First-time insurance buyers currently go through four key shopping stages:
      • Interest is triggered
      • Research
      • Apply
      • Purchase
    Let’s examine the buying process and the barriers to making a purchase 1 – INTEREST TO BUY 2 – RESEARCH 3 – APPLY 4 – PURCHASE
    • Triggered by Parenthood, they become “Planners and Protectors”
    • Highly motivated to buy in the next 6-12 months triggered by parenthood
    • Want to “prepare for the unexpected,” “allow family to maintain std. of living,” “have peace of mind”
    • They envision future milestones (e.g. graduations, weddings, buying a home)
    • They expect changes in their lives
    • They are not motivated by aging, getting sick or dying
    Interest Trigger Psychographics – From me to we – from spontaneity to plan ahead – from invincibility to just in case 3 – APPLY 1 – INTEREST TO BUY 2 – RESEARCH 4 – PURCHASE
      • They identify themselves as having low knowledge of life insurance
    • Even after recently purchasing life insurance, roughly 29% of buyers considered themselves to have lower than average knowledge about life insurance
    • 57% of prospects considered their knowledge to be lower than average
    Life insurance is a new topic to FTIBs. Even after buying, they still don’t feel educated. Purchase Barrier 1 – INTEREST TO BUY 2 – RESEARCH 3 –APPLY 4 – PURCHASE
  • FTIBs are tech savvy, online and expect to be independent and in control. They try to learn about life insurance ” I went to Google first, I just typed in “insurance questions,” and see what comes up.” “ I’d rather look online myself, take my time to figure out what I need.”
      • Self educate online – Google is most popular first stop, Wikipedia as well.
    “ They wouldn’t give you a quote unless you filled out your name and stuff. I didn’t want to do that.”’
      • But they are reluctant to divulge personal information upfront to get quote because they don’t want to be hounded or commit to anything.
    “ No I won’t give out my info, definitely! Not until I’m ready to buy but not when I’m still doing research.” 1 – INTEREST TO BUY 2 – RESEARCH 3 – APPLY 4 – PURCHASE
  • The usually easy to understand (mostly unbiased) Wikipedia, offers a lengthy and confusing article on life insurance. Researching life insurance online is confusing and it isn’t easy. Purchase Barrier
  • FTIBs want anonymity but the aggregators like this top paid search link have other ideas Aggregators hit you right off with asking for a lot of personal information. Purchase Barrier
      • Want personalization and flexibility. They don’t want to be locked in.
    “ I don’t want cookie cutter. I want something customized for me.” “ I want it to be customized, with my age, my kids, what we should have, how much we need. And not just how much we need but also what type of policy is best for our particular situation. They want a policy that is customized to meet their unique needs from a trusted resource. Purchase Barriers
      • Suspicious of insurance institutions and agents.
    “ You never know if agents are selling you what they make the most money out of, or if it’s really something best for you.” “ Insurance companies are all about loopholes.” 1 – INTEREST TO BUY 2 – RESEARCH 3 – APPLY 4 – PURCHASE
  • MetLife home page has a lot of products and information. So much that it is overwhelming. Also – question of objectivity. Am I getting good advice? Insurance companies web sites are developed to capture the lead and then have the agent contact the prospect. Purchase Barrier
      • FTIBs believe that life insurance companies are not actively targeting them
    What do they do next? “ Their commercials always show two old people sitting at the kitchen table.”
    • Apprehensive, they turn to influencers and are heavily influenced by word-of-mouth .
    • Confusion forces people to agents to help explain what is right for their situation.
    47% learned about the policy they purchased from a friend, family member or a financial advisor 1 – INTEREST TO BUY 2 – RESEARCH 3 – APPLY 4 – PURCHASE
    • While more prospects feel agents care more about commission, buyers feel most agents are informed and helpful.
    • While more prospects thought they would prefer to apply online, buyers ended up using an agent to purchase.
    Prospects go into the insurance buying process thinking they can control the process, but find it too confusing. As a result they need to find an insurance expert to help. Attitudes towards agents change
      • Disclose/input personal information
      • Choose “pre-packaged” policy
      • Utilize agents or 1-800 customer service
    They give in to the purchase reluctantly because they lack confidence in their research and their insurance decision. The result is procrastination and failure to complete the sale.
      • Quote and approval not guaranteed until passing health exam
      • Surprisingly they see the health exam as an opportunity to get a lower rate (prospects were willing to travel up to 15 miles and wait up to 2 hours) . But they procrastinate over scheduling and taking health exam
      • Pass exam but fail to pay – more inertia
    They Give In to the Purchase Process 1 – INTEREST TO BUY 2 – RESEARCH 3 – APPLY 4 – PURCHASE 1 – INTEREST TO BUY 2 – RESEARCH 3 – APPLY 4 – PURCHASE
      • Traditional DR model ineffective in catching these lucrative FTIB buyers
      • They believe that life insurance companies are not actively targeting them
      • They don’t relate to conventional insurance brands and user imagery
      • They lack confidence in their knowledge of life insurance & research they have done to date.
      • They are wary of agents & insurance companies
      • Can’t find ideal policy, need more info, seek custom alternatives
    We need to develop a new sales model that compliments their independent online buying desires and that overcomes the purchase barriers There’s a gap between how they want to shop and how they can shop so they often get stuck in phase 2 The Shopping Gap “ This much money sounds like too much, this much sounds like too little. It can’t possibly be good. Are the agents out to get something extra, are they trying to sell you a policy you really don’t need? What is a policy that’s custom designed for my family and my needs? I just haven’t found it, I’ve been looking seriously for six months.” Jennifer, F, 35, mother of 3 young kids 1 – INTEREST TO BUY 2 – RESEARCH 3 – APPLY 4 – PURCHASE
  • The Solution
  • Introducing the Policy Builder * A remarkable interactive experience that gives consumers the path to purchase life insurance. TurboTax comes to Life Insurance. * Policy Builder is a working title and may change as we move forward Determine Need Health Status Plan Recom- mendation Complete App & ParaMed Coverage In Force
  • The Policy Builder Process
    • The Policy Builder needs analysis module will:
      • Tell consumers if they really need life insurance – and why
      • Help them understand how much coverage they need
      • Help them understand how their employer coverage fits into their life insurance protection strategy
      • Determine how long they’ll need the coverage
    “ Tell me about yourself and I’ll help build the right life insurance coverage for you .”
    • Process is anonymous, only email is required to create account
    • Consumer can save work and return to process
    • Process educates consumer at each step
    • Data collected is stored and used for personal recommendation
    Determine Need Health Status Plan Recom- mendation Complete App & ParaMed Coverage In Force
  • The Policy Builder Process
    • The Policy Builder health status module will:
      • Explain why health and lifestyle information drives rates
      • Ask consumers the application health and lifestyle questions in a user-friendly manner
      • Tell consumers what rate class they are eligible for – and why
      • Explain how a health check is required to verify health status
    “ Your health and lifestyle determine how much your insurance will cost. I’ll ask you some questions about your health to determine your premium.”
    • Answers to health questions are captured and used to pre-fill application
    • Process will flag un-insurable risks and provide coverage alternatives
    • Data collected is used to quote appropriate rate tier
    Determine Need Health Status Plan Recom- mendation Complete App & ParaMed Coverage In Force
  • The Policy Builder Process “ Here is your personalized insurance solution. You can adjust the coverage to see the impact on your rates.”
    • Customized plan is presented based on coverage amounts up to $2 million and policy term lengths of 1, 10, 15, 20, 25, or 30 years.
    • Consumer can further customize coverage to find an affordable rate.
    Determine Need Health Status Plan Recom- mendation Complete App & ParaMed Coverage In Force
  • The Policy Builder Process
    • The Policy Builder application module will:
      • Explain how the application process works and how we’ll issue a conditional receipt once payment is received
      • Review why we need to collect personal information and why it’s safe
      • Provide feedback from other consumers about their experience
      • Show a video clip from a third party endorsing the coverage
      • Explain how the “free health screening” works and why it is needed
    “ You just have a few more steps to go to protect your family.”
    • This module is the key transition from education to sales/purchase
    • We need to instill trust that this is the right choice
    • We will need to make consumers feel comfortable about saying “yes”
    Transition from education to purchase needs to be done effectively without traditional “high pressure” tactics. Determine Need Health Status Plan Recom- mendation Complete App & ParaMed Coverage In Force
  • The Policy Builder Process
    • The consumer completes the application providing any additional information required
    • First month payment is collected and conditional receipt/coverage granted
    • Health screening location is determined and time is scheduled
    • Consumer is told underwriting decision will be emailed
    • The module will monitor the process and prompt reminders about health screening appointment date/time
    • Status of application process will be tracked and communicated to consumer during this phase
    “ I’ll email you a reminder at each step so you know exactly what to expect.” Determine Need Health Status Plan Recom- mendation Complete App & ParaMed Coverage In Force
  • The Policy Builder Process “ Congratulations, your coverage is now in place. You can print your policy by clicking the link below. Would you like to leave feedback on your experience or refer a friend?”
    • The Policy Builder coverage in force module will:
      • Email consumer that coverage is in place
      • Allow insured to print policy for records
      • Ask insured to provide feedback to improve the process
      • Allow insured to refer others to the Policy Builder
      • Health screening results mailed to the consumer
    • This step officially communicates that coverage has been approved and provides summary of coverage.
    • E-fulfillment allows insured to print policy documents.
    • Information about how to make a claim or change coverage will also be provided.
    • Health screening facility responsible for mailing exam results to consumer.
    Determine Need Health Status Plan Recom- mendation Complete App & ParaMed Coverage In Force
  • The Policy Builder Sales Process Lead (web visit) Recom- mendation Apply 1 st Pymt. Cond. Cov. ParaMed Exam U/W Coverage Policy Builder Abandon process Shop, decide, delay No payment No exam Denied/Lapse Capture Email Purpose of email so recommendation can be saved for later. Live chat/800# to get questions answered Use conditional coverage as a way to be protected during health screen. Provide endorsements/ testimonials to instill trust in buying now Save/print recommendation and return later Reminder emails – focused on insurance need - you’re not protected yet Payment is required for conditional coverage. Exam is positioned as a positive – free health screening, lower rates, more coverage. Improve ParaMed convenience – go to location. Reminder emails about making/keeping appointment. Pre-screen in health status module to limit denials. Multiple tiers to issue more. Timely communication of U/W decision with explanation. Immediate e-fulfillment of policy. On-going payment via CC or PAC. Typical fall-off points in moving from a lead to a sale Solutions Policy Builder process addresses key lead abandon points and drives to a sale.
    • Consumers must view it as unbiased
    • We will only offer recommendations that are in the consumer’s best interest
    • We will use members of the consumer panel to guide the development of the process
    • We will find a third party endorsement to either participate in the development of the tool or to try the tool and recommend to their clients
    • We will not pay commissions to insurance specialists
    • “ Real People” must be available when the consumer is ready/wants to talk
    • We will have insurance specialists available at the consumer’s convenience (800#, click to chat)
    • We will train insurance specialists on consumer life insurance needs with less focus on product details
    • Consumers must view the process as a positive experience worth recommending
    • We will make the process low pressure
    • We will educate consumers about their need and how our recommendation fills the need
    • We will make consumers feel “savvy” for choosing this process
    • We will give the consumer good value for their money
    Keys to Success Our Goal: To create a life insurance tool and program that we would recommend without hesitation to friends/family.
  • FTIB Creative Approach
  • Communication Goals
    • STANDOUT by breaking old-fashioned insurance advertising rules
    • ACKNOWLEGE FTIBs marketing savvy and reward them
    • HIGHLIGHT newness – a new way of buying life insurance (not your parents way OR the way you feared)
    • REINFORCE message of consumer empowerment – “you’re in control”
    • INCITE curiosity and DRIVE traffic to Personalized Policy Builder site – do you even need life insurance? It’s easy to find out, right now!
    • COAX AND CAPTURE buyers by using effective messages along the shopping continuum that are welcomed and not considered “high-pressure”
    Be the first source consumers turn to when they realize they need to buy life insurance.
  • A Consistent Marketing Message
    • The life insurance rules have changed.
    • It is time for YOU to build a plan suited
    • to YOUR unique needs…
    • and adjust it as YOU see fit in the future.
    • Let the Policy Builder put YOU in control.
    Finally, a hassle free way to figure out your life insurance needs and buy the product that’s best for you!
  • Creative Approaches Tested 1. 4. 3. 2. ‘ Personalized for you,’ ‘customized,’ ‘in control,’ ‘no pressure,’ ‘build your own policy’ resonated I like the idea of being able to build my own customized product Don’t scare me! I like the message! Show me future milestones but stay clear of Hallmark Moments
  • Recommended Creative Approach
    • Tone and Manner:
    • Positive and fun – buying life insurance doesn’t have to be such a negative experience.
    • Fair, caring, human, dynamic and real. We want consumers to perceive us as having their best interest in mind at each interaction.
    • Straight-forward with no BS – simple language that talks to our target, not over their heads.
    • Overall Creative Imagery:
    • We need to be different and relevant to these FTIBs.
    • The images and lifestyles chosen must let them know this is for them, not for their parents.
    • Choose imagery that stands out against the clutter, avoiding images typically associated with old-fashioned insurance providers and aging consumers.
  • Brand Credibility Statements Tested
      • Effective messages to communicate credibility (first five statements created strongest trust):
      • Current policies protect over a million U.S. families
      • Rated A+ by A.M. Best
      • 7th largest insurance company in the world ranked by total assets
      • Ahead of ING, New York Life, Nationwide, and Allstate
      • Insurance roots dating back over 150 years
      • $9 Billion insurance in force
      • Employ 29,000 people worldwide
      • Member of the AEGON group of companies
      • (Transamerica, Life Investors, Peoples, Monumental, Stonebridge)
    FTIBs want facts and numbers, not just established brand names. We have what it takes to be credible.
  • Additional Branding Insights
    • A well-known brand does not guarantee automatic trust
    • Transamerica appears to enjoy some brand awareness (4%) but not brand affinity; Stonebridge Life had almost no awareness (less than 2%)
    • Reactions were lukewarm among minority of panel members who have heard of the Transamerica brand; perceptions ranged from neutral to “an older brand”
    • FTIBs are accustomed to buying previously unknown brands
    • Google, Geico, Subaru, Samsung - these brands succeeded in marketing themselves as uniquely catering to the next generation of consumers, therefore turning unknown brand deficit into an asset
    • Endorsement by experts and peers adds to brand credibility
    • Leverage equity from trusted experts e.g., Money.com, WSJ, etc
    • Peer approval – e.g., customer ratings, testimonials – from “someone like me”
    • Create sense of community by connecting shoppers with fellow shoppers
    • Combination of expert and peer endorsement could substantially alleviate resistance of buying from a lesser-known brand
  • Recommended Branding Approach
    • Build the Brand by Branding the Process
    • Focus marketing efforts on branding the ‘Policy Builder’ process with less emphasis on the underwriting company name (Turbo Tax vs. Intuit).
    • Use Stonebridge Life as the insurer since Transamerica does not appear to have a brand affinity advantage. Use of Stonebridge eliminates potential channel conflict with Transamerica agents.
    • Lack of brand awareness of Stonebridge Life allows us to create the image we want for the Policy Builder.
    • We will seek out relationships from trusted authorities to give credibility to the process and brand.
    • We will also foster ‘word of mouth’ referrals, consumer feedback and public relations to build trust from outside sources considered unbiased.
    The name needs to clearly communicate what we are about while being simple and easy to remember
  • Marketing Approach
  • Marketing Challenges
    • FTIB research/trends show consumers are so jaded with traditional advertising channels that they are dubious of any claims made using this media.
    • Additionally, ads run via traditional marketing channels are frequently by-passed by our target audience – they skip TV ads with remote or DVR, listen to MP3 or satellite radio vs. commercial radio, flip stations when radio ads come on, ‘recycle’ direct mail before it is opened, etc.
    • Consumers put greater trust in word of mouth, consumer referrals, and ‘expert’ recommendations.
    • Consumers need the time to go through the phases of the purchase process.
    • Consumers are demanding more creative content and greater relevance.
  • Make Consumers Aware of a Unique New Way of Learning About And Buying Life Insurance Tease Consumers With Strong and Unique Messaging Delivered via Both Traditional AND Guerilla Media Channels Insert the Stonebridge FTIB Solution Into Consumer Dialogue - Known as the place to go when you need life insurance Drive Consumers to a Central Hub Web Site With the Policy Builder tool at its Core Convert Consumers by Offering Them a New Level of Simplicity, Understanding, and Personalized Solution to Life Insurance Deliver on the Simplicity and Understanding Platforms with Strong, Simple Messaging, Fully-Integrated Communications Elements, Fully-Trained Telemarketing Staffers, and Ongoing Retention Efforts The Integrated Sales Solution – Media Strategy AIR COVER – awareness via traditional media and PR GROUND SUPPORT – action via word of mouth
  • Traditional Media – Create Awareness
    • DRTV
    • Innovative creative messaging used to create initial awareness of Policy Builder and create brand personality.
    • Concentrate media buys only where FTIB demographic is watching.
    • LIVE READ/SPOT RADIO
    • Live read radio spots create powerful testimonial-like endorsements of the process/product. On air personalities can sample the Policy Builder process and share their reaction with listeners.
    • Spot radio creates awareness and helps build brand personality.
    • Target stations/programming that meets FTIB demographic.
    • SEARCH MARKETING, CPM WEB ADVERTISING AND EMAIL
    • Use search marketing and CPM web advertising to target people in the insurance shopping process. Create alternative ad messaging that stands out from traditional life insurance ads. Offer consumers no pressure, expert-approved insurance recommendations.
    • Use email marketing to create awareness and maintain ongoing dialogue with consumers through the purchase process.
  • Word of Mouth – Drive Action
    • PUBLIC RELATIONS
    • Create excitement and awareness in the media about a new way to buy life insurance.
    • POLICY BUILDER TEST DRIVE
    • Travel to AEGON offices to present our new process/product and ask fellow associates to test drive the process. We’ll ask for feedback on how to improve the process and we’ll ask them to tell their friends and family.
    • THOUGHT LEADERS
    • Ask key financial advisors and experts to give the process a trial run and ask them to recommend to their clients. We’ll ask for testimonials that we can use and offer reciprocal links to their site.
    • Ask leading financial publications to review the site and product and provide their readers with their thoughts on our offering.
    • Ask key bloggers to test out the process and post their thoughts along with a link.
    • FREE LINKS
    • Squidoo, DIGG, Youtube, etc
    • REFERRALS
    • Harness the power of friends and family to recommend the Policy Builder.
  • Other Alternative Approaches
    • NON-TRADITIONAL CHANNELS THAT COMPLIMENT ACTIVE LIFE STYLES
    • Gyms, health food stores
    • Airports, in-flight entertainment
    • Mobile channels
    • Sponsorship and presence at local community events
  • Proposed Agency Launch Strategy
    • FOUR GEOGRAPHIC TEST MARKETS REPRESENTING THE U.S.:
    • San Diego (W): #26 U.S. Market/1.2MM HH
    • Pittsburgh (NE): #21 U.S. Market/1.4MM HH
    • St. Louis (MW): #22 U.S. Market/1.4MM HH
    • Richmond (SE): #52 U.S. Market/606M HH
    • TWO MONTHS OF LAUNCH/TEST ACTIVITY: Jan & Feb 2008
    • BROADCAST FLIGHTING: Two Weeks On/Two Weeks Off
    • (spot radio, lr radio, spot tv, spot drtv)
    • PRELIMINARY BUDGET ESTIMATE:
    • Agency has proposed an initial marketing launch budget of $1.8M.
    • (this does not include cost to develop the Policy Builder tool or web site)
    This is only an initial proposal and will be refined as we move into the development phase of the Policy Builder.
  • What if we integrated our distribution approach into our product offer? An Alternative Marketing Approach
  • What does this mean?
    • TV, RADIO, DIRECT MAIL, TELEMARKETING
    Use new distribution channels for a new generation of insurance consumers Public relations, endorsements, on line, referral and viral marketing! NO AGENTS, COMMISSION Our marketing costs would be drastically reduced.
  • How do we do this?
    • Build a logical/compelling reason to ‘spread the word’ about the product:
    • The money we save by not using traditional advertising or paying commission is passed on to consumers through lower premiums.
    • We will show how much the consumer is saving with every rate quote.
    • We encourage buyers to refer the site to friends/family so we can keep advertising costs low and provide the most affordable coverage for all.
    • We can create an ongoing dialogue with complete visibility to the number of visitors, customers generated, and dollars saved through their efforts (track the total number of referrals, person with the most referrals, etc).
    • We could create a participating trust where the block of business would receive the benefit of better persistency and claims experience through annual rebates.
    This would create a truly remarkable offer – a superior buying experience coupled with lower premiums. The best of both worlds.
  • The Details
    • Here’s how the savings could work:
    • Assume a $400 base annual premium with a PPF of 100%
    • We lower our factor by 75% and give that back to consumers in lower premiums.
    • Depending on the average persistency, this could translate into a 20-25% reduction in premiums for consumers.
    • The remaining 25% in PPF would be used to fund viral initiatives and affiliate marketing.
    • The consumer would end up paying $320 a year – an $80/year annual savings using the example above.
    • Each rate quote would show the difference of a PPF of 100% and a PPF of 25%.
    • Consumers could save $1,600 over a 20 year term
  • The Impact
    • Focus is shifted to making sure the customer experience is ideal – each visit needs to convert at a high rate to be successful.
    • Marketing message and channel are less important and providing true value to the customer is key.
    • This would force us to use unconventional marketing tactics – identifying low/no cost lead opportunities to build traffic.
    • The type of creative/marketing agency we would work would need to have a different skill-set.
    • Our consumer story is much stronger – we will have created an offer that is truly focused completely on the consumer – matching the way they want to buy, getting the personalization they expect, at a price that is one of the most affordable on the market.
    • There would not be a major launch, but a gradual start-up phase where we get consumers to try the process and offer their feedback.
    • Marketing investment would be focused on improving the process and customer experience and less on ad production and media.
    • It would force us to change our whole approach to marketing.
    • Key question: Can we generate enough volume with this approach?
  • Financial Comparisons
    • Break-even scenarios for both approaches requires low CPL’s and higher App/lead%’s
    • The question is which scenario is more realistic – getting a $20 CPL and a 9.8% app% for traditional – or getting $8 CPLs and a 19.6% app% for viral
    • Production and creative fees are not included in the Traditional line
    • Comparable Financials
    • 2Q07 CI DRTV Drive to Web – CPL = $11; Apps/Leads = .85%
    • Auto Term Online Ads – CPL = $8; Apps/Leads = .37%
    • Auto Term Radio Drive to Web – CPL = $48; Apps/Leads = 3.45%
    • 1Q02 Coverna DRTV – CPL = $37; Apps/Leads = 12.00%
  • Success Measurements
    • - Visits to site (leads)
    • - Number of valid email addresses collected
    • - Number who start the Policy Builder but never complete it
    • - Number and impact of live chat/800# calls
    • - Number of people who complete the Policy Builder and get a recommendation
    • - Number of people who apply immediately after recommendation
    • - Number of people who apply as a result of reminder email program
    • - Length of time between recommendation and application
    • - Total number of applications and health exams completed
    • - Issued and paid policies
    • Persistency
    • - Number/impact of referrals
    New metrics will be needed regardless of the approach we take.
  • Implementation Strategy
  • Implementation Approach
    • Implementation Challenges:
    • Creation of a robust and remarkable Policy Builder tool using expert and consumer input.
    • The seamless integration of a fully functional insurance web site and admin systems with the Policy Builder.
    • The creation of competitive life insurance products that will serve the needs of this market.
    • Development of a distinctive name and creative approach that will communicate a consistent message to consumers.
    • Develop a full marketing launch strategy that is consistent with the shopping and media habits of our audience.
    We are recommending a phased approach where business requirements are fully defined, development proposals are obtained including budgets and timelines. These would be approved prior to any work/expenditures being done.
  • Implementation Process Phase 1 Create Detailed Blueprint & Budget 6 weeks Final testing & adjusting of all parts/systems includes final design elements (PB, web, internal systems, coordination thru out) Marketing strategy - Place media and PR Phase 2 Build Elements 16 weeks PB&WEB =$731,500 Production & Media = $2.8M Phase 3 Test and Execute (4-6 weeks) Launch Work with experts to develop the Policy Builder logic and recommendations. Construct the policy builder and web site – includes IT and creative elements - Test design and prototype against consumer “super panel” Product Development - File in group & individual states and get approvals – load on internal systems Begin internal system projects to integrate insurance and application with the Policy Builder including customer communication touch points. Finalize marketing launch strategy and develop creative elements Policy Builder & Web Site – Research and obtain technology resources and financial/insurance expertise Determine external creative resources to create consistent image for PB tool, web site and marketing communications Product development – finalize product design requirements including re-insurer and Para Med partner, admin support details and system integration scope Develop detailed scope of work and budget. Present to Executive Team for approval
  • Preliminary Policy Builder Development Budget Preliminary examination of costs for Policy Builder and Web site estimated at $700K. In Phase I, we will nail down resources, development costs and budget.