Turning Clicks into Clients

With one of six consumers "in play," retaining online consumers remains challenging

Richard Hall has had ample time to perfect his response to online insurance shoppers. An early adopter of quoting tools, Hall credits almost a decade of experience with them for his current track record with online leads: roughly 100 come into his office a month, and he and his colleagues turn one in three into a sale.

“I’ve been through the labour pains, and it’s been an uphill battle,” Hall, a producer at Petley Hare Ltd. in Oshawa, Ont., says of his time using InsuranceHotline.ca. “I’ve never looked back.”

But even with a tried-and-true formula for sales, turning those transactions into longtime clients presents a different challenge. Retention can be tough–the company loyalty shown to automakers or clothing stores generally doesn’t extend to insurance. And economic uncertainty tests it even further: more car and homeowners reported shopping around for lower rates during the downturn, according to J.D. Power and Associates. Even in a healthier climate, one in six insurance consumers is considered “in play,” Accenture reported last year.

Online shoppers are even more fractious than the average insurance consumer. Researchers in the U.K. report that they are less loyal: 39% of quoting site customers are likely to be disloyal at renewal time, compared to customers gained through traditional advertising. What’s more, they might be cheaper to acquire, but are more costly to keep, the Institute of Direct Marketing study found.

How can brokers stop the game, and turn online shoppers into longtime, loyal clients?

Core challenges

Brokers face the same core challenge with online clients that they do with any other–getting them to see past pricing. Broker Judy Bell gets online leads from several sources–InsuranceHotline.com, Myinsuranceshopper.ca, and through her own brokerage website. Many of the online shoppers who come her way are fixated on numbers.

“With their current insurer, their price is going up, and some of them have had enough,” says Bell, owner of Beyond Insurance Brokers Inc. in Whitby, Ont.

That price fixation is often compounded by an educational battle–customers come in with quotes generated with inaccurate or incomplete information.

“They’ll get a price for $1,000 a year, and they forgot to put that they had an accident or didn’t put in three tickets,” she says. “I’ll say, ‘it’ll be $2400,’ then they get angry. [They say] ‘I have this piece of paper.'”

Educating online shoppers “definitely takes more work,” says Marc Leger, president of the Insurance Brokers Association of New Brunswick. Brokers in the province are relative newcomers to the online quoting game–roughly half the association’s brokers signed up with Myinsuranceshopper.ca in October 2009. Now, all members use the lead generator.

While the leads are building more gradually than they have in Ontario, Leger says the gap between online shoppers and more traditional ones is already clear–and growing. “They’re either coming in with more knowledge, or they’re on the other side of the spectrum and are completely misinformed,” he says. “You have to debunk a lot of their pre-conceived ideas.”

Attitudes have also shifted, he adds, noting that online shoppers tend to cling to their ideas and challenge broker expertise. In the past, customers came in “with very little knowledge and had faith in the broker–it’s definitely a new breed of shopper.”

Who owns the client?

The new breed also has different ideas about loyalty. Shoppers tend to be brand loyal for certain online purchases, but the transparency of auto insurance pricing makes it easy to jump ship when they find a lower quote. They don’t consider themselves tied to an insurer anyway: The Institute of Direct Marketing study found that online shoppers are “more inclined to perceive their relationship to be with the price comparison site and not the insurance company.”

That tug-of-war also applies to the broker-client connection, notes Bell. “Quoting engines do encourage them to go back,” she says.

These challenges can deter some brokers from cultivating online shoppers, says Hall. Add the cost of leads–roughly $16 to $20–and “some brokers drop it because the cost per lead has gone up,” he says.

The loyalty issue is also a big concern, Bell points out. “Some [brokers] don’t like lead generating tools–they think of the person that uses them as a shopper, that they’re going to waste time writing them up this year, but next year [the shopper] will leave them,” she says. “My challenge to them is, to do something that will make them fall in love with you.”

Building loyalty

Both Bell and Hall agree that education can be the first step in getting online clients to appreciate a solid broker connection. Letting them know that a broker can do what an online service can do–and compare quotes from multiple providers–is part of that, Bell says. “It’s about building trust and building that relationship right from the get go.”

That upfront conversation helps reestablish the terms of the relationship, she says, noting that she tells online shoppers, ‘We aren’t just here to give you a one-time price. We want to be your insurance broker, we’ll do the shopping for you.” Often, that’s something quote jumpers haven’t heard before. Bell estimates that about 70% of leads coming to her have previously dealt with direct writers or banks. “In many cases, we can get them a better price than they get online.”

Offering them additional education on coverage is also an eye opener for them, she says, and an opportunity for brokers to differentiate themselves from other distribution methods.

To solidify new relationships, Hall looks to bundling–explaining the benefits of having all their insurance with one provider–as a way of offering another type of discount. And as the year progresses, he and his colleagues also track pricing for clients. Anything going up more than $100 raises a flag, and they contact the client to try to find an alternative.

That kind of trust is working for brokers like Hall and Bell. Both brokers have promising retention rates for clients originating online. Hall puts his retention at 90%, and Bell estimates her own at 91% overall. At three years old, her brokerage is relatively new, she points out. “The majority of it did begin with Hotline. We still have those clients.”

Changing online demands

The technology that generates quotes for consumers is also nudging customers beyond price. Some U.S. insurers are starting to follow retailers in the way they maximize what they know about online customers to increase the odds of keeping them beyond one transaction.

Newer online tools create detailed customer profiles as soon as a shopper clicks on a quoting service or insurer website, explains Michael Costonis, managing director for Accenture’s insurance practice in North America. When a shopper arrives, their browsing history allows the site to customize its approach. That “creates a totally different buying experience,” he says.

“If I was looking at the Wall Street Journal and The Robb Report then went looking for auto insurance, I don’t want to have the cheapest coverage pop up, I want to look at luxury automobile coverage, and high touch service,” he says. “It’s an interesting bridging mechanism to change the online experience in response to that profile.”

That approach is changing the paradigm. “What we’re starting to see, is more than just a price shopper is showing up online,” he says. “We’re staring to see the market turning on its head, where people aren’t just going online to save money.”

Segmentation can also bridge the gap between online shoppers and brokers. With older tools, the context of someone’s experience can be lost between their online search and phone call to an agent or broker. With the newer approaches, a high-net-worth client who lives in the suburbs and likes horses would be pre-matched with a broker.

“When the prospect shows up on the broker’s system, they know what she’s looking for,” he says. “It’s pre-matched to a profile, and the conversation becomes much more intelligent and much more customer-focused.”

Brokers may not be there yet, but they’re getting closer. For his part, Hall would never go back to a pre-online world. “From what we put into it, we’re probably getting back tenfold,” he says.


Copyright 2011 Rogers Publishing Ltd. This article first appeared in the April 2011 edition of Canadian Insurance Top Broker magazine.

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