- Where Insurance & Technology Meet

When Demographics are Not Enough: A View of On-line Evolution

Population characteristics – age, gender, income, etc. –  play large roles in marketing generally and insurance marketing specifically.  With the proliferation of data coming from sources including social media and on-line services, leading experts are agreeing that these factors – referred to as demographics – may not be enough for optimal results.  A set of tools – psychographics – is beginning to show its value in on-line consumer marketing generally, and could provide benefits for insurance marketers specifically.

First, what is lacking when using demographics as differentiators?  A colleague of ours recently pointed us to an article by , a Digital and Social Media Strategist at Janrain, which deals with this well. To cut to the chase, Beckland points out that demographics seeks to influence large groups into taking buying action.   The philosopy, according to Beckland, is: “When you lump 78 million people into one group called ‘Baby Boomers,’ it’s much easier to sell them stuff, especially when consumers accepted their generational classification.”

The challenge is that this is not working as well as it has in the past for a variety of reasons.  For example, the cohorts (age bands) are shrinking in size.  Also, within a cohort, fragmentation is becoming the norm. “With the recent rise of the social web, people self-select into groups so small, so fragmented, and so temporal, that no overarching top-down approach could be successful at driving marketing performance,” Beckland writes.

An alternative that leading marketers are turning to is psychographic profiling, and we are all seeing this every time we buy something from Amazon.  Beckland describes this as follows:  “Psychographics look at the mental model of the consumer in the context of a customer lifecycle. has long been a leader in this space, through innovations like ‘recommended products’ and ‘users like me also bought.’ Its algorithms have learned to predict its users, and what they are interested in. And now, there are a number of tools that any business can use to leverage psychographics.”

So how might this apply to insurance?  Some leading on-line marketers are doing this already.  Progressive, for instance, uses comparison shopping as a lure to get a specific set of prospects to their site, and then uses a quoting facility to funnel ‘qualified’ prospects to the Progressive quote, while guiding others to competitors.

We found a marketing site which offers to provide qualified insurance leads based on psychographic qualification mechanisms.  Social Traffic is dedicated to ‘helping companies drive more traffic to their sites using social media.’  While we can’t vouch for the quality of the results, we were impressed with the description of how the company would devise a programme to attract qualified insurance shoppers.

The key element is to deeply understand the qualities you want in a ‘perfect’ customer.  That requires both intuition and good analytics to interrogate databases of customers and results.  With the resulting information, and a presence in the appropriate social media, there are proven mechanisms to pave roads for that perfect customer to follow to you.  Powerful stuff.