Latest Insurance Study Reveals Link Between Marketing, Technology Investment, and Revenue Growth
Staff Writer | May 13, 2016
Velocify, a sales acceleration platform, and Insurance Technologies Corporation (ITC), a provider of marketing, rating, and management software and services, announce the results of a new joint study "The Techsurance Marketing Revolution." The study examines marketing investment and technology usage and its effectiveness in the insurance market.
As consumers shift to online insurance shopping and typically obtain multiple quotes, the need for agencies to react faster than the competition increases. Fortunately, new technologies are paving the way for insurance agencies, regardless of size or type, to compete and grow in an increasingly commoditized insurance world.
"The digital revolution has transformed the way people buy insurance, and our recent study shows that technology has become increasingly important for insurance agencies that want to grow," says Chris Backe, director of financial services at Velocify. "We have seen how marketing automation and sales acceleration technology can work together to boost sustainable revenue, and this new research underscores the significant ROI opportunity here."
The study uncovered that insurance agencies using marketing automation technology sold more policies per producer and per household, on average, and that agencies that spend more than 10 percent of their revenue on marketing were more likely to experience significant growth, regardless of their size or type.
"Marketing is critical to an agency's survival and success. We've seen it, and this study shows it to be true," says Laird Rixford, president of ITC. "For agents who are investing in marketing technology, they are getting good returns and taking advantage of the huge opportunity that is available to them."
However, the study also reveals a risk for insurance agencies adopting the latest marketing technologies. The study found that as the percentage of revenue spent on marketing went up, customer retention rates decreased. This shows that growing agencies may need to make commensurate investments in customer retention and satisfaction initiatives as they scale their marketing budgets.
The survey of more than 1,000 insurance agencies includes the following key findings:
Return on Marketing Investments
- Agencies that invest in paid marketing channels have a tendency to grow faster than agencies that rely heavily on their existing book of business
- Agencies that spend less than five percent of their revenue on marketing are almost three times more likely to experience flat revenues than they are to experience significant revenue growth (more than 20 percent year-over-year rise)
Return on Technology Investments
- Marketing automation users sell 20 percent more policies per producer, and 10 percent more policies per household, on average
- The combined impact of lead management (which drove 43 percent more policies per producer and 13 percent more policies per household) and marketing automation ensures agencies are leveraging marketing automation to nurture customers to a buying stage and lead management to increase their effectiveness in contacting, quoting, and converting more leads into policies.
The results of the study were derived from a 20-question survey completed by more than 1,000 insurance agencies to better understand the state of technology and its effectiveness in the insurance market. Participating agencies included direct-to-consumer carriers, insurance carriers that use captive agents for selling, and independent agencies, which generally sell products from many carriers. To learn more, download the full report from Velocify's website by following this link.
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The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA is pleased to present the 2014 Webinar Series. We have many topics for you to choose from and attendance is open to all ITA members. The webinar topics are current and exciting — ranging from predictive analytics to telematics and will focus on the direction insurance carriers need to follow for the future. All webinars are presented by insurance IT professionals along with some of the leading analysts and consultants in the field. There is no cost to attend an ITA webinar. For more information and to register for the webinar, click the “title” of the webinar below.
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