5 September 2016Analysis

Prospect marketing is failing for captive insurance companies. Now what?

Albert Einstein is broadly credited with exclaiming that “the definition of insanity is doing the same thing over and over again, but expecting different results”.

While they do not intentionally mean to be, captive managers are pretty transparent with their marketing efforts. It is quite easy to do reconnaissance on a competitor and understand their digital strategies for acquiring new leads. Email marketing, for example, is one easy way to see what your competitor is doing. Sneaking on to their e-newsletter mailing list can provide you with a wealth of information as to how they are seeking new clients via the content they use, or it can bring you peace of mind by revealing that they aren’t doing anything intelligent with the list of their prospects. This, unfortunately is the case for most captive managers in the middle market.

To better understand the ancient tool of marketing, we need to understand how email addresses are to be collected under US federal compliance (the CAN SPAM Act), as well as understand how lists are to be segmented into categories. Being that the captive industry is slower to adopt new technology when it comes to the handling of data, what we see is a lot of data exchange taking place at conferences and through referral partners.

Business development folks simply return to the office and type these contacts into their email vendor (assuming they have one) and off they go. These email addresses, or should I say, potential clients, have now been added to your email campaign. Sound familiar? It is the equivalent to your mobile phone number being added to a tele-sales company. The emails your prospect receives may be of little relevance to them, ultimately causing irritation. The prospect you once had may have lost interest in you because of the barrage of emails they have been receiving simply because C-level captive managers still believe in the shotgun approach to marketing and maintaining brand presence.

Not only is this detrimental to your lead generation efforts but it also puts your company in a position of not maintaining compliance according to the CAN SPAM Act, which establishes requirements for commercial messages, gives recipients the right to have captive managers stop emailing them, and spells out tough penalties for violations.

There have been situations in which the principal of a captive insurance company (CIC) has completely disregarded the act, which comes consequences such as having your account suspended due to violating CAN SPAM regulations. You will not only lose the work that your team put into building email templates and lists but you will also lose the ability to email your prospects and more important, your clients who receive operational updates.

Putting your marketing team in that situation is a drain on resources and time. It is best to build your marketing list the right way, preferably utilising a customer relationship management (CRM) platform as mentioned in the previous article (Moving from referral dependency to referral independency).

Get permission
The right way begins with asking for permission. When in doubt, ask for permission from that contact. To prove compliance your email client, whether it be large or small, will require you to get what are called ‘double opt-ins’ from your contacts in order to communicate to them via email through one of those email clients. The double opt-in ensures that the CIC has permission to communicate to the prospect, whether it be marketing material, news, updates or invitations.

When this transition occurs you will most likely lose 20 to 40 percent of your original email list. That sounds like a negative but what you are actually doing is cleaning a list that should have been scrubbed long ago. Constantly sending emails to old addresses that may no longer be valid actually hurts your reporting and wastes your marketing team’s time. Chances are, you are not seeing an accurate picture of responses in your email marketing campaign if you continuously use old email addresses that have not been verified.

Do not be afraid to start over. A clean list provides opportunity to begin segmenting your list by gathering a bit more intel on your prospect. It also ensures deliverability. If you collect information such as industry, you are able to segment your list according to the industries you serve. Rather than blasting out an email that has no relevance to 75 percent of your list, you can now be intelligent in how you formulate and execute your content.

For instance, if a captive manager has a list made up of 30 percent CPAs, 10 percent healthcare, 20 percent manufacturing and 40 percent oil & gas, now the captive manager can get smart with how they develop their content and how they apply captive insurance to the specific needs of each industry and their risks.

Insights gained from intelligent email campaigns can also be used to plan larger content marketing campaigns, translating to positioning your brand and your URL visibly higher than those of your competitors using search engine optimization (SEO) strategies (more on this in another article). As the captive manager, you have the responsibility to educate your prospects as well as your clients. Simply marketing to them will not add value to the captive manager as a partner.

Take a look at your current operations through the lens of this article. You will see where work needs to be done. Begin with a situation analysis, set some short-term goals and bring on an experienced marketer to help you get set up. Some captive managers may not need a fully fledged team for ongoing support—they may be able to get away with hiring a consultant with experience and success in the industry to set up the marketing machine.

Along the way there will be tweaks and assessments needed. The online marketing space is in constant flux and a watchful eye must be kept on your lead generating source. Take the time to build your foundation by looking to those with experience. Then, step aside and let them do the work.

Stewart J. Severino is a marketing consultant. He can be contacted at: