State of Direct Mail Marketing: Insurance Industry

The most limited resource in the world isn't money – it's time. If you are in business, you have to get your customer's attention. As a result, you have to ask yourself this question: What is the most effective method of marketing to prospective customers?

In the insurance industry, that's easy: Direct mail. 94% of insurance company marketers agree that using direct mail – including letters, postcards, and brochures – is the method of communication that has the top return on investment.

However, direct mail marketing isn't just throwing a letter in an envelope and hoping for the best. You need to take advantage of various data points and campaign types to maximize the benefit of your direct mail. Fundamentally, the insurance industry has always specialized in understanding that direct mail works best when customized to the user's needs. At Lob, we're here to help. Let's take a look at the current state of direct mail marketing for the insurance industry.

Data usage

The continued expansion of digital platforms has made it easier than ever for direct mail vendors to capture and use key data points effectively. Examples of this data include:

• Contact information: Direct mail is only impactful when it reaches the right person, relies on the right salutation, and uses the right name. You need to make sure you have the most up-to-date contact information.
• Web behavior: Visiting various websites or social media pages could mean your potential customer is interested in different products. Use this to your advantage. For example, you can visit the social media pages someone likes to better understand your prospective customers' income levels and spending habits. This may trigger a different mail campaign that can serve as a lead magnet, pulling in your customer to ensure you use the right campaign.
• Purchase information: When armed with the right data, you can target prospective customers based on their purchase histories, allowing you to market specific insurance lines that match a person's needs. You can often find out if a customer recently purchased a new car, boat, house, or more.

Finally, with the right data, you can track your campaign's return on investment. When you manage a professional mail campaign through a data-enabled firm – like Lob – you can determine which tactics work and which don't, allowing you to determine the best possible way to market to your customers.

For more information, check out our Modern Marketer's Guide to Intelligent Direct Mail.

Campaign types

The insurance marketing world – just like other service marketing – has various direct mail types that you can use. These include customer retention, customer acquisition, and sales advertisements.

However, our data shows that insurance marketing differs slightly from other industries. Insurance marketing places a much greater emphasis on customer retention. In fact, according to our data, customer retention is the primary campaign type used for the insurance industry, followed closely by customer acquisition.

How can you use direct mail for customer retention? Check out this story from NEXT, an online insurance provider in California. NEXT sought ways to connect with existing customers better and increase their retention rates. They connected with LOB to identify ways to better communicate with their existing customers, enhancing personalization options and timing to ensure their direct mail was as timely and relevant as possible.

This study is a great example of how a data-informed direct mail campaign can be ideal for customer retention. Armed with customer behavior, NEXT was able to contact existing customers at the right point in their business cycle, ensuring that these customers would renew their business contracts and consider expanding their insurance coverage. Such a campaign isn't easy, and it requires businesses to invest in a customer data platform that connects a customer's online behavior with an insurance company's marketing. Fortunately, such campaigns can be successfully executed when armed with the right resources.

Campaign format

Direct mail can have many formats, including letters, postcards, flashy fliers, and snap packs. In most cases, businesses prefer mail that is as brief and impactful as possible, leading many to favor well-designed fliers above all else.

However, this wasn't the case for the insurance industry, and there's a straightforward reason for this: Regulations. Compliance is non-negotiable for any insurance marketer. As a result, letters tend to be the preferred method of communication to ensure the security, privacy, and regulatory compliance of any marketing effort.

However, postcards were tied for the top position. As such, it's clear that many insurance marketers have figured out how to use letters and postcards in a way that is impactful and compliant with all privacy concerns. The next few years will determine whether other campaign formats – such as self-mailers or snap packs – will be as popular.

Personalization

As noted above, currently available data ensures that insurance marketers can personalize mailers to maximize their impact. Consider all the ways that campaign mailers can be personalized:

• Contact information, including name, address, and nearest local branch.
• Personalized offers that reflect the prospect's web browsing or purchase history.
• Acknowledgment in the letter of past history with the insurance broker in question, including status as a current or lapsed customer.
• Sample rates based on appropriate demographic and financial history data points.

More specifically, direct mail efforts can come with personalized coupons directly related to the customer. In many ways, the insurance industry has become a business leader in these personalization efforts, as the available data allows experts to personalize contact information based on customer needs.

Conclusion

Insurance marketing is a tough business. You have to have access to the right data, know the right campaign types, and personalize information to be as impactful as possible. Fortunately, at Lob, we can help. As experts in direct mail for insurance, we understand how to maximize the benefit of your direct mail marketing.

Want more information on the current state of direct mail for insurance? Check out our free report here.