Insurers Find Social Media Lacks ROI. So What?
May 4, 2012 •
For the past several years, marketing experts have been telling everyone with a business how important it is to become more engaged in social media, that increased brand recognition will lead to increased sales. Now comes a study of insurers using social media suggesting that only half of this belief is true.
In the second annual study of asset managers and insurers conducted by Kasina, findings indicate that although 87% use LinkedIn, Facebook and Twitter to engage with advisors, policyholders and investors, ’very few” are seeing increased sales from their efforts. (This is based on preliminary information; the actual study is not yet available.)
About 85 %of respondents said they have seen increased brand awareness on social media platforms, 67% have seen increased engagement with clients and prospects, and 58% say social media has led to increased eb site traffic.
Howeve,tas far as bottom-line profits? Not so much, even though more insurers are using social media.
In last year’s study, Vanguard, Fidelity, TIAA-CREF, i-Shares and The Hartford came out among the top social media champs. This year’s findings suggest that compliance concerns, which were the major roadblocks to social media initiatives in prior years, are no longer keeping most firms from participating. However, fewer than half of the firms surveyed have dedicated social media budgets.
So what, if anything, does this mean for insurance? It took long enough to convince the industry to use social media. Will these findings cause a major rethink?
It doesn’t really surprise me for a few reasons. First, gauging a true ROI of social media is like trying to figure out how many sales come from golf outings and community activities. Yes, if you meet someone in that environment and they buy from you, then that’s a ‘tick’ in the plus column, but if it was strictly a numbers game, then social media and other more traditional ‘social’ activities wouldn’t occur.
Second, I believe there is a rush to judge (social media) much the same way we rushed to judge the value and return on Web sites 15 years ago. I would bet there are similar studies from back then that said insurers don’t see any uptake in having a website.
The truly important takeaway from the Kasina study isn’t the lack of ROI, but the overwhelming success of 85% percent of users seeing an increase in brand awareness on social media platforms, said Rick Morgan, senior vice president at Aatrijk. “It is and will continue to be difficult to monetize and determine ROI on social initiatives, but then again, that is true with many forms of PR/marketing,” he said. “One would have to assume that in increases in awareness, engagement and traffic that new business would follow and the ‘stickiness’ of existing business would improve.”
More importantly, if you’re not part of the social media party now, eventually you will be seriously left in the dust later, he said. “The real benefit might be that if you do not ‘show up’ in social sites, for many, you don’t exist. If the new Connected Consumer…can’t find you on Facebook, Twitter, Linkedin, Google+, Pinterest, or YouTube, you simply don’t exist.”
And it’s not just a matter of throwing money at the issue, but rather a need to think through the process holistically, he added. “Companies don’t need Facebook or Twitter strategies. They need comprehensive business strategies where the new technology provides additional tools to realize overall goals. It is more than a marketing tactic; it should involve and can have an impact on communication, support, claims, product development, risk management, etc.”
So short answer? Don’t stop blogging, tweeting or Facebooking. Because even if it doesn’t pay right now, it will eventually.