Direct mail continues to provide the highest return on investment (ROI) of all their marketing channels, according to insurance marketers ¹. While digital marketing strategies have gained budget share, direct mail offers unique benefits and opportunities for insurance companies to engage with their target audience effectively.

There’s a growing trend to incorporate more direct mail in marketing budgets and insurance companies should take note. Given the ROI impact, 58% of marketers have more marketing budget allocated to direct mail compared to 2022².

Year Over Year Direct Mail Budget Changes³

Here we explore key scenarios “WHEN” insurance companies should leverage direct mail marketing to maximize their ROI and enhance customer engagement.  

This is one in a three-part series focused on effectively integrating direct mail into the tactics of the insurance sector.  
You can find the other posts at aiim.com/blog 

1. Use Direct Mail when the ROI is appropriate: 

One of the reasons why insurance is the perfect sector for direct mail marketing is that about 81%⁴ of insurance companies agree that direct mail shows the best ROI among all the channels they utilize today. Insurance companies can achieve a favorable ROI by utilizing direct mail marketing in specific situations. For instance, direct mail is particularly effective for marking policy anniversaries, sending renewal reminders, expressing gratitude for business, and nurturing already–established relationships. Insurance quote requests that are responded to by using a combination of digital and print mail packages lead to a higher ROI than ones responded to with only an email, according to Terminal Van Gogh’s Ben Passmore.

2. Use DM when selling directly to customers: 

Direct mail is frequently employed in the direct sale of insurance. The personal information exchanged during the quoting and sales process allows direct mail to be personalized for follow-up communications. By targeting the right audience at the appropriate stage, insurance companies can leverage direct mail effectively. 

Acquiring new customers usually involves multiple marketing channels. Direct Mail performs well in this omnichannel environment. Using unaddressed Neighbourhood Mail allows you to build a tangible connection with other digital marketing efforts. Around 75% of business mail stays in the home for over four weeks and is revisited an average of 5 times⁵. This means that your direct mail piece will remain in the hands of the prospective customer for weeks with a high probability of being acted upon! The upside of using this strategy? Every mailbox will connect you to potential insurance customers – tenants, homeowners, car owners, and the life insured.  

3. When Brokers’ Marketing is supported by a Head Office program:

Insurance companies that provide a head office–supported program make it possible for brokers to utilize direct mail successfully. Individual brokers may find it challenging to become direct mail experts, secure competitive pricing, and execute effective and recurring campaigns. A supported program ensures consistent branding, supplies expertise to the entire broker network, and helps brokers become experts in utilizing direct mail marketing. You would also get higher continuity and recurring participation.  

4. Leading Up to Important Milestones: 

Timing is everything! Direct mail is particularly impactful when reaching out to individuals undergoing important milestones, such as new policies, anniversaries of policies, birthdays, family and life changes. The more meaningful the timing of your message, the more powerful your connection will be to your customers. By delivering timely and personalized messages, insurance companies can enhance their communication ROI and increase the impact of their marketing efforts. 91% of customers prefer purchasing services when offers are specific and relevant to them⁶. to You can now trigger these messages from your data, integrate them with other marketing channels and make your messages automated yet personalized, thus offering a seamless and personalized experience for customers. 

5. Transpromo Messages tagging along with statements and policies 

TransPromo, short for Transpromotional, involves the integration of personalized marketing content into transactional documents such as bank statements, invoices, and receipts ⁷. TransPromo messages that are printed and mailed with statements and policies offer insurance companies a valuable opportunity to create bonus points of communication with their customers through a single document that caters to each customer’s individual needs. This is not new, but it is something that can be even more effective now that these messages can be triggered, targeted and personalized. The cost is relatively low, given that the mail piece is already being printed and mailed. Often the extra messages can be fit on existing paper in the document or simply added on one extra sheet, a fraction of the cost of paying for a stand-alone direct mail package. 

Modifying these important, mission-critical transactional documents and adding messages has become easier with new PDF modifying technology.  The workflow for adding these messages has gotten easier to implement and may not require the modification of the programming that creates the policies or statements.  It can often be managed with technology that reads and modifies the documents in the PDF files that are output from those systems. Additionally, the latest inkjet printing technology can make these personalized messages in brilliant colors, contrary to historic black-only statement printing.  

This approach allows for personalized expressions of gratitude, cross-selling or upselling promotions that amplify the brand. Incorporating It is a cost-effective and efficient solution that adds value to both transactional mail and marketing initiatives. 

References:

1. https://www.lob.com/use-cases/insurance
2. https://go.lob.com/Lob-2023-State-of-Direct-Mail-Insurance-Edition.html?utm_campaign=2023-sodm&utm_source=insurance-page&utm_medium=website
3. https://go.lob.com/Lob-2023-State-of-Direct-Mail-Insurance-Edition.html?utm_campaign=2023-sodm&utm_source=insurance-page&utm_medium=website
4. https://www.lob.com/use-cases/insurance
5. https://www.marketreach.co.uk/mail-marketing-ideas-research-insights
6. https://www.lob.com/ebooks/the-marketers-guide-to-direct-mail-personalization
7. https://www.docpath.com/art-transpromo-advertising-what-is-it-and-what-are-its-advantages/