As an auto insurance marketer, what you don’t know about your customers can hurt you.
Traditional targeting methods often fail to provide an in-depth understanding of prospects, making it easy to mistakenly target high-risk drivers. These drivers typically have a low lifetime value, increasing customer churn which can negatively impact profitability over time.
With telematics data, you can get out of this targeting rut. Learn how to gain a true understanding of your prospects to target, engage and convert quality leads — boosting marketing return on investment and profitability.
How does the buying cycle doom insurance marketers?
Online advertising is extremely competitive for auto insurance marketers because they’re targeting a limited pool of prospects. Consumers don’t change insurance frequently. If they have a good driving record and a good rate, why would they switch?
Meanwhile, consumers who do shop for new coverage are usually drivers whose rates have increased because they had an accident or experienced another form of loss. Data shows that these high-risk drivers click on car insurance ads up to 3 times more often than low-risk drivers. These risky drivers are not who auto insurers want in their book of business — but they may still be inadvertently targeting them. Why?
Traditional data targeting can lead to negative ROI
When auto insurers use traditional targeting tactics, they don’t have a complete understanding of the consumers they’re reaching. They optimize their campaigns based on conversion, and increase budget to reach the high-converting segments. Marketers effectively end up doubling down on the highest-risk drivers based on the signals they see in their campaign metrics.
Some might say, “That’s OK; our pricing team will sort it out when the user completes their quote.” That would be true if the company had access to telematics data as part of the quote flow. But if not, carriers will continue to convert and underprice the highest-risk drivers using traditional rating systems.
Identify your ideal customers with telematics data and audience targeting
By using programmatic marketing techniques such as audience targeting, auto insurance marketers can target segments of drivers grouped by driving risk in their ad campaigns across the digital ecosystem.
And by using telematics data in their programmatic marketing, carriers can either target only the most profitable customers, or simply modify their bidding strategy to bid higher for the best customers and bid lower for the higher-risk customers.
Additionally, with a thorough understanding of their ideal customers, carriers can customize advertising creative to engage different types of drivers in different stages of the buying journey. Once customized messaging is developed, carriers can run ads via their own demand side platform in marketing campaigns across all digital channels.
Smart auto insurance marketers are boosting their ROI by augmenting their traditional data targeting strategies with telematics data, and using audience targeting to reach the best prospects for their business.
Fred Dimesa is head of advertising and aggregated data product segment with Arity. He may be contacted at [email protected].