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The Future of Insurance is in the Hands of Millennials Part 1: How to Capture Millennial Customers

Posted on November 29, 2016 by Daniel Taibleson in Digital Insurer

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Millennials: they inspire countless magazine cover articles and speeches about how "horrible" the generation is, yet those who were born between 1980 and 2000 are the most powerful force in America's economy – including for your insurance business. Pew Research Center reported this year for the first time millennials overtook Baby Boomers as America's largest generation. Not only do they have more purchasing power than any other cohort, they’re also the most vocal online.

This is important for two reasons. 1) You have to respect their purchasing power and 2) you have to respect their expectations – as we all know, “the customer is always right.”

Let’s take a deeper look at how you can turn millennials into loyal customers.

What Millennials Want from Insurance Companies

Millennials have grown up interacting with large brands like Amazon that provide excellent digital customer service. They’ve become accustom to certain level ease at every touchpoint of the buyers journey and they expect that ease to carry seamlessly across both digital and in-person experiences.

Your brand perception is wrapped up in everything you’re associated with, both online and off, at every touch point of the buyer’s journey. Which is why this year, according to Gartner, nearly 90 percent of marketers are making the customer experience their most significant strategy priority. That focus should extend to your insurance business to connect with millennials.

Consider these customer experience factors that contribute to the smartphone-loving, social media-savvy millennials.

  • Mobile means business: 61 percent of people will leave a site if they can't find what they're looking for right away, reports Google, and 67 percent of users are more likely to buy from a mobile-friendly site. If your site isn't optimized for all devices, your brand could stand to lose millions.
  • Digital customer service is vital: 53 percent of customers will not complete an online purchase if they aren't able to get quick answers to questions, according to Forrester's Trends 2016: The Future of Customer Service report. Social media customer service is just as important, as Gartner reports social media users looking for support who are not responded to may cause a 15 percent churn rate.
  • Content is king: 62 percent of millennials say online content, from blogs and podcasts to YouTube tutorials and social media posts, affects their loyalty to a brand, according to The Millennial Mind: How Content Drives Brand Loyalty report by NewsCred. In order for content to be effective, it should be the right blend of educational and entertaining in order to hold attention and build trust. Teach your audience something new, and make that experience enjoyable!

So we know they have different expectations when it comes to the digital experience, but it turns out that millennial’s also want different insurance products than previous generations. According to research from Goldman Sachs, millennials are driving a "sharing" economy, a generation that is more interested in renting and sharing than owning. This means a bigger market for renters insurance over homeowners insurance. The report shows 34 percent of millennials like brands more when they use social media, too, and price is more important to millennials than quality. Insurance that is cheaper based on usage, such as car insurance that is less expensive based on good driving behavior or health insurance that rewards nonsmokers, is attractive to millennials.

The data above doesn’t lie, millennial’s expect a difference customer experience. One that’s mobile, digital, and enjoyable, or at the very least easy. These trends will only strengthen over time as each new generation becomes more and more interconnected with technology.

How Your Insurance Company Can Connect with Millennials

Millennials want a seamless experience with brands, one that is consistent and pleasurable no matter where they are connecting with the brand. The EConsultancy Quarterly Digital Intelligence Briefing: The CX Challenge report found 41 percent of organizations cite at least 16 touchpoints as being a central part of customer experience. That's a significant amount of opportunities where a brand can inject a personal touch into each interaction and ‘wow’ millennials with great service and/or content.

As millennials increase their usage of smartphones to influence everything from how they view a brand to their likelihood to purchase, making a brand experience amazing on all devices is essential. Insurance brands can also consider creating standalone apps for enhanced user experience, since Forrester reports more than 80 percent of consumers use apps to interact with brands.

Although millennials prefer doing business via their smartphones, the research shows they also want someone they can lean on for tough questions as a trusted in-person advisor. This has placed the insurance industry in a predicament where the customer is essentially demanding more -- as table stakes – in order to have a shot at the opportunity to earn their business.

By next year, mobile behavior will drive commerce revenue to 50 percent of American digital commerce revenue, says Gartner. If you want survive in today’s competitive market it's time to embrace the generation so many love to hate. At the very least, investing in social media marketing to connect with millennials and using those channels as extended arms of customer support is of paramount importance.

Make sure you’re prioritizing millennials in content strategy, since they are the generation most likely to engage with and share online content. Think about the problems they have that your insurance brand can solve, then create content tailored specifically with those answers. What blogs can you create that answer the question, "How do I know if I need renters insurance?" What YouTube insurance webinar can you create in reaction to the Google search "comparing auto insurance"? Make content emotionally appealing, intelligent, and useful enough that consumers are compelled to share it with their peers.

It's true, millennials are not buying insurance like their parents or grandparents did. They have different needs, their shopping habits are disrupting the industry, and they require technologically-friendly brands in order to build trust and loyalty.

Learn more about how your company can connect with millennial’s by downloading our free e-book Exceeding Customer Expectations or watching our free Customer Expectations Webcast 

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Daniel Taibleson

As a content marketing manager at Vertafore, Daniel acts as the Editor-in-Chief of the Vertafore.com blog, uncovering and telling stories about the intersection of insurance and technology.




 

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