Through Consumers’ Eyes
A recent survey shows auto insurance buyers are ready for a change,
and depending on the target market, insurers can take action. By Carrie Burns
WHO DO YOU WANT TO BE YOUR CUSTOMER? If your answer is “almost everyone” (low- risk of course), you’re likely not
alone. However, that is a diverse and large group, and
many of them have different purchasing preferences,
especially when it comes to online shopping.
The “Insurance Consumer Dynamics” study by
Little Rock, Ark.-based Acxiom Corp., an interactive
marketing services provider, reveals what consumer
segments are more likely to maintain policies with
their current insurer, and which are actively looking
for change to fulfill their auto insurance needs.
The data used in this study is developed from large
repositories of U.S. consumer intelligence (
InfoBase-X), Acxiom’s PersonicX life-stage segmentation and
additional attitudinal and behavioral consumer survey
data integrated from New York-based Mediamark
Research & Intelligence, Worthington, Ohio-based
BIGresearch LLC and Reston, Va.-based comScore Inc.
Then, based on behavioral variables, Acxiom grouped
consumers into three segments:
1. “Staying the Course” represents the
status quo. These consumers value the agent relationship, are the most economically stable, have the
highest income and are least likely to shop around.
Photography by © istockphoto.com
2. “Open to Options” consumers believe
price is important, but it is not the only consideration. They have the most adults and vehicles per
household. They are economically stable in the mid-range of incomes. They are willing to consider a good
value but are not desperate to change.
3. “Cutting Corners” is looking for ways
to save. Household members share vehicles and are
actively engaged in price shopping. They rank at the
bottom of the scale in economic stability.
This segmented approach enabled Acxiom to draw
conclusions about effectively reaching high-value,
high-potential customers for their business model,
and those customers who also are receptive to offers.
According to the study, Cutting Corners and Open
to Options consumers are ripe for change. Insurers
who service Open to Options consumers know that
they have the potential to be long-term customers if
they treat them well and foster a sense of trust along
the lines of “your challenges are my challenges.” Fail
to meet their needs, however, and once gone, they
may not come back. Insurers that would fare best with
Cutting Corners consumers are those that approach
the business aggressively, keep tight control on
expenses and use volume as a counter-balance to the
lower margins these customers provide.
Also evident in the study is the importance of
appropriate distribution channels. The agent is still the
preferred acquisition channel, but with many consumers, the agent model is under siege. Even
consumers who value their agent are increasingly
turning to online research and quoting.
In addition, the popularity of Internet shopping
and rate comparing makes the online space even more
critical for every type of insurer. As broadband technology becomes more and more ubiquitous, being
online with an easily navigable site will be the new
cost of doing business in the auto insurance sector.
Chad Mitchell, a senior analyst with Cambridge,
Mass.-based Forrester Research Inc., expects U.S. consumers to use comparison sites more over the next
two years. “Our data shows continued growth in
online auto insurance shopping,” he writes on
InsuranceNetworking.com. “More U.S. consumers
will go online to lower their premiums during the
recession, and comparison sites are the perfect tool.”
Acxiom, suggests that segmenting consumers
using the Web for auto insurance shopping can help
carriers determine the most appropriate message to
communicate, and specifically target those segments
most likely to respond.
“When it comes to the future of auto insurance,
consumers are clearly in the driver’s seat,” says Holly
Marr, Acxiom’s VP, insurance practice. “Through their
intentions and actions, consumers are creating a blueprint for insurers on how to structure the ever-evolv-ing agent and/or direct model. The hallmark of that
model is the need for value propositions tailored to
individual customer preferences.” INN
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