The five Deadly Mistakes of Insurance Direct Mail Lead Generation

Written By Ted Grigg

Over the last 20 years, I’ve done my fair share of direct mail lead generation for the insurance industry.

Most of those mailings were dropped year round to keep the internal telemarketing groups and field agents busy.

There are five major mistakes that most insurance companies make that severely reduce response rates.

1. Insurance companies do not test a large enough variety of lists to win long term.

Once a few lists are found that work, the insurance companies mail only to these names with the mailing going to the same names over and over again. They wear out these names and experience diminishing returns.

Test compiled lists based on customer profiling to refresh your list. Also test response files and aggregated lists to uncover new list categories. Find a good list broker who works with several large insurance company clients to help you find those new names.

If you need large rollout quantities, be sure to test marginal lists that have large rollout potential. After running your merge/purges prior to each mailing, be sure to focus on lists that have a high match rate with your present customer list. Those are the lists that will most likely get your highest response rates.

What other list issues have helped or hurt your program?  

2. Companies do not prepare the sales force for the calls.

Provide the call center with your samples several days before each drop and share the lead generation strategy with your field agents.

This exposure assures buy in from both your internal as well as external sales representatives.

How do you prepare your call center for the calls brought in by mail?

3. Some insurance companies let the lawyers take over the marketing program.

Insurance companies sell policies and policyholders buy claim payment protection.

The creative work provides coverage features, but often fails to sell the company and the claims service experience. The risk of high claims and litigation for insurance companies will never go away. As insurance companies attempt to reduce risks, they have unwittingly allowed their lawyers to emasculate their lead generation programs.

Use testimonials liberally to reinforce positive claims experiences.

Negotiate hard with your legal team to make your mail more responsive to customer needs.

4. Most direct mail formats mailed by health insurance companies are not designed for maximum response.

The format of choice for most insurance companies is the self-mailer.

After hundreds of tests in this industry and others, I have yet to beat the classic envelope containing a letter, response device, and product brochure when tested against a self-mailer or oversized postcard.

What formats have you tested? What format works best for you?

5. The insurance industry is notorious for lack of imagination in testing offers.

You would think that in spite of the state-by-state regulatory environment, insurance companies could find a way to reward respondents who bother to respond.

But frankly, the industry needs to do a better job of offer development.

Except for the list and the product itself, nothing will impact response rates more than the offer.

Have you tested various offers? If so, what offers got the best response in your situation?

Ted Grigg

Ted Grigg is a direct response strategist who helps growth-focused companies reduce risk by identifying weak assumptions before they become costly mistakes.

Over the course of his career, Ted has evaluated several hundred million dollars in direct response testing across direct mail, digital, print, television, telephone, and other channels. His work combines direct response strategy, acquisition economics, customer analysis, creative evaluation, offer development, and disciplined testing.

Ted has worked on both the client and agency sides of the business. That experience gives him a practical understanding of the pressures facing executives, marketing teams, agencies, and service providers—and of the problems that arise when activity, media volume, or creative preference replaces a clear economic objective.

His consulting work helps organizations examine such questions as:

  • Are acquisition goals economically realistic?

  • Is the allowable Cost Per Sale supported by customer value?

  • Are targeting, offers, creative, media, and response paths working together?

  • Are tests structured to produce reliable business decisions?

  • Are unproven assumptions being treated as facts?

  • Is the organization measuring sales outcomes rather than convenient proxies?

Ted’s experience includes the development of direct mail and multichannel acquisition programs for insurance, healthcare, financial services, technology, nonprofit, manufacturing, retail, transportation, communications, government, and business-to-business organizations.

For a national direct-to-consumer insurance company, he developed a direct mail format that defeated established controls and helped expand the productive use of compiled prospect lists from less than 10 percent to more than 30 percent of total direct mail circulation within one year. He also planned Medicare lead-generation programs for more than 60 regional and national HMO and PPO organizations, with some programs exceeding sales projections by as much as 60 percent.

Ted founded Wyse Direct, a direct marketing division of Wyse Advertising in Cleveland, where he developed acquisition programs and helped launch a new technology product for Seiko Instruments by generating a predictable flow of qualified sales leads for its national sales organization. As vice president of new business development for the Grizzard Agency, he helped broaden the agency’s strategic capabilities and pursue new commercial and fundraising opportunities.

He is the author of The HMO/PPO Marketing Plan—A Step-by-Step Guide, published by Executive Enterprises, and has written numerous articles and conducted webinars on direct response strategy, testing, creative development, and marketing economics.

Ted earned a Bachelor of Arts degree from Abilene Christian University and completed two years of graduate study at Texas Tech University. He is the founder of DMCG, LLC.

http://www.dmcgresults.com
Previous

Do Companies Really Want the Ideal Chief Marketing Officer?
Next

Customer Service--- "64% of Companies Don’t Even Answer the Phone"