You cannot get away from having insurance – whether it is for your health, your house, your car or even your pet – you want to have a sense of security for it all. Having insurance is a long-lasting commitment of high value, and when I think of these traits, I think of direct mail.

Not all insurance companies fully recognize the value and relevance of direct mail marketing in their industry. In our continuing quest to hone our expertise in this field, I embarked on a mission to engage with remarkable representatives of this industry. Join me in exploring the potential of direct mail for insurers and unlocking new opportunities for growth and success.

Debunking the Digital-Only Myth

One of the biggest hesitations towards direct mail is the convenience of digital marketing and the perception that the new generation only wants digital.  

“People think direct mail is dying due to digital marketing – but in reality, people are still responding to direct mail.” – Rapinder Dhinsa, Senior Marketing Strategist, RKD Group 

Although digital marketing has been perceived to be cheaper and quicker, about one-third of Millennials and Gen Z prefer direct mail over digital and say they are likelier to act on it, which can lead to a higher Return on Advertising Spend (ROAS) ¹. Can you afford to miss out on this opportunity to reach this cohort? According to another study, around 64% of insurance consumers are motivated to act upon a direct mail piece². You do not want to miss out on this kind of incredible engagement! 

So why is direct mail engagement so high?  

The competition for attention in your mailboxes is lower than in your digital inboxes. 

With the rapid onset of digital marketing, we are all used to opening our inboxes to a bunch of promotional emails daily – making Millennials and Gen Z feel oversaturated with digital promotions and prone to using spam filters, unsubscribe buttons and ad blockers. Instead, they open their postal mailbox to an attention-grabbing mail piece.  A postcard, for instance, is likely 100% open-rate communication. Try to get that in an email. 

“Our affiliation with mailboxes is different from the previous generation. Tangibility is the core element.” – Karen Gasper, Director of Marketing Solutions, Canada Post 

Not just this, digital marketing is becoming increasingly expensive along with stricter privacy laws being implemented. This calls for consideration for integrating both channels and maximizing your engagement.  

Resolving the Insurance Broker Dilemma 

In the insurance industry, brokers play a vital role in connecting customers with the right coverage options. However, when it comes to incorporating direct mail into their marketing strategies, brokers are hesitant. This is where the head-office incentives can play a role.  

“Brokers could use direct mail as a tool to help them build their book of business” – Betty Vasconcelos, Director of Marketing Solutions, Canada Post 

Brokers hesitate to use direct mail, considering it a traditional approach that they have moved beyond. However, the physical nature of direct mail allows brokers to establish a tangible connection with prospects and customers, fostering trust and credibility. Through carefully targeted direct mail campaigns, brokers can communicate their expertise, showcase their range of services, and highlight their value. The targeted audience could be existing customers for engagement such as cross-selling and upselling, or prospects identified through available lists and geographic selection. By leveraging direct mail alongside their digital efforts, brokers can create a comprehensive multi-channel marketing approach that reaches prospects through various touchpoints.  Insurance companies, with co-op participation, can play a supporting role that can reduce costs and simplify direct mail production for their broker network. This can improve the likelihood of a broker choosing this powerful marketing channel and improve ROAS.  

The ROI Advantage 

In the realm of marketing, Return on Investment (ROI) or Return on Advertising Spend (ROAS) is a critical metric that measures the success of a campaign. When evaluating the effectiveness of marketing campaigns, it is essential to shift the focus from costs to ROI. While the upfront costs of direct mail are higher per contact than digital marketing, about 81%³ of insurance companies agree that direct mail shows the best ROI among all the channels they utilize today. 

“Look at the ROI, not the cost” – Karen Gasper, Director of Marketing Solutions, Canada Post  

Traditionally, direct mail has been associated with lead generation. However, it is crucial to recognize its value as a re-engagement tool in fostering relationships with existing customers. By re-engaging with customers, companies can tap into a highly receptive audience familiar with their brand, leading to increased conversions and customer loyalty. Triggered programs can also ensure timeliness with less effort, allowing higher ROI.  

“Direct mail supports the sales journey and can be used not just for lead generation, but also for developing relations.” – Anonymous National Executive, Insurance Industry Contact 

 

Variable data printing (VDP) is a game-changer when it comes to personalization and ROI. With VDP, companies can incorporate unique and relevant information into each mail piece, such as personalized greetings, offers, or tailored product recommendations. By leveraging this level of personalization, insurance companies can differentiate their direct mail campaigns from generic mass mailings, fostering a higher ROI by increasing the likelihood of response and conversion. By optimizing printing on demand, insurance companies can achieve significant cost savings, as compared to mass printing, while ensuring a higher level of engagement with their target audience. 

“Direct Mail is the most enduring medium. If it is personalized, and better yet individualized –recipients tend to
hang onto it.” – Ben Passmore, President and Co-Founder, Terminal Van Gogh Ltd. 

Demystifying Capabilities of Personalization 

Exploring the untapped potential of direct mail is crucial to leverage the power of data in the favor of insurance companies. Hopefully, this article raises awareness of the value that it can bring to this sector.  

The power of direct mail extends beyond the initial engagement. According to a study, 78%⁴ of consumers express that personally relevant content enhances their intention to purchase products and services from that brand. And that is why some insurance companies follow up phone calls and digital estimates with printed personalized quotes and proposals. 

“Creativity and innovation are crucial, but relevance is acted upon.”- Anonymous Marketing Manager, Insurance Industry Contact

Insurance companies know their customers well. With the availability of this data, insurance companies can optimize direct mail to present appropriate offers at the right time for meaningful engagement.  

 “Target your direct mail properly – it needs to land in the right hands.” – Anonymous National Executive,
Insurance Industry Contact

Precision targeting ensures that direct mail reaches individuals most likely interested in the offerings, enhancing the chances of a positive response.  This can be best achieved by reaching out to existing customers with reminders, cross-sells, and offers.  They already are familiar with your organization, and you benefit from this lift in recognition.   

Following up on requests for information and quotes is a great place to use direct mail to improve conversion.  If you provide online quote requests or call centre quotes, sending out a mail piece to illustrate the benefits and costs can boost the digital responses you may send to prospective clients.  You can also target potential new customers with data services that identify look-a-like customers and provide lists. This improves the likelihood that they will respond. 

Integrating Direct Mail and Digital 

Integrating direct mail with other digital channels can provide one of the strongest responses and can boost the effectiveness of all of those channels. With the cost of digital advertising only going up and a plateau of digital ads effectiveness being reached, insurance companies who integrate all channels are seeing the benefits.  

Integrated direct mail and digital campaigns elicit 39% more attention – A Canada Post Study⁵

Insurance companies have data such as email and home addresses – which can efficiently support both channels simultaneously. Working with these two channels in concert instead of as a standalone tactic will boost responses considerably. Now is a good time to consider combining both! 

References:

1. https://whattheythink.com/articles/115354-talkin-bout-my-generation/
2. https://2022-lob-the-modern-marketers-guide-to-dm-insurance-edition.pdf
3. https://www.lob.com/use-cases/insurance
4. https://www.prnewswire.com/news-releases/more-than-three-quarters-of-consumers-say-personally-relevant-branded-content-increases-their-purchase-intent-finds-new-study-from-onespot-and-marketing-insider-group-300376444.html
5. Canada Post Smartmail Marketing Consumer Guide: canadapost.ca/postalguide