Insurance II

Session 2 Insurance Marketing: Modern Views on Marketing, Marketing of Insurance Products, Selling Experience and Service Experience

Marketing

Marketing is to know and understand the customer so well that the product or service fits him and sells itself. Marketing should result in a customer who is willing to buy. Need to look at the business from the customers rather than suppliers viewpoint.

A simple marketing system

Communication Goods / services Money

INDUSTRY (a collection of sellers)

MARKET (a collection of buyers)

Information
Economists view market as a collection of buyers and sellers. Marketers view buyers as constituting the market.
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Marketing and Selling

Sales orientation attempts to increase sales by informing and persuading the customers through advertising and publicity, tempting the customer through promotion including price reduction and gift offers, and personal salesmanship.

Marketing involves designing the product, determining the price, deciding how to distribute, planning the media and the messages for advertisement and publicity. Marketing focuses on the customer and his behavioral characteristics in a manner in which selling did not.

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Marketing vs. Selling

ATTRIBUTE FOCUS ATTITUDE PRODUCT DEVELOPMENT PRICE

MARKETING
Needs and interest of the buyer Create pull from buyer Follows marketing activity Determines cost

SELLING
Needs and interests of seller Push products to buyer Precedes sales Determined by cost

HORIZON

LONG TERM (customer is important throughout)

SHORT TERM (customer not important after sales)

Marketing of Insurance

Marketing of a contingent promise.

Benefits to be realized at a future date

Insurance is like sand while bought, like gold when it is realized.

Need for buying the product rarely felt.

Prospective buyer has his own special needs: requires specialized solution through face-to-face contact (in most cases).

The Concept of Marketing

Modern Concept Philosophy of Caveat Vendor (let the seller beware)

Products to match the customer needs (ULIP, Annuity, Health Plans, Micro-insurance etc.) Business decisions are market or customer oriented Continuous evaluation and adjusting the product characteristics to market needs Traditional Concept Philosophy of Caveat Emptor (let the buyer beware) Goods are produced as per the decision of the Marketing Manager and are put on the market (Traditional products like Endowment, Whole-life etc.)

Marketing of Life Insurance Three Important Areas

Effective and successful marketing depends upon the quality of customers experience in three areas:

Selling

Selling
Service Relationship
Relationship Service

The Selling Experience

Personal selling is dominant in insurance industry Need to follow a sequence of steps in personal selling Selling an art, not taught so much as caught When we sell insurance, we sell ourselves Emphasis upon grooming, personality & communication style

Steps in Personal Selling Prospecting & Qualifying Pre-approach Approach Presentation Objection Handling Closing Follow-up

PROSPECTING AND QUALIFYING

PREAPPROACH

APPROACH

OVERCOMING OBJECTIONS

PRESENTATION AND DEMONSTRATION

CLOSING

FOLLOWUP AND MAINTENANCE

The Service Experience

Performance of certain services heart of the insurance contract Insurer need not be confined to just services only, but may expand its scope to new areas
(Example - Star Customer Support, Star Health Initiative, Max Bupa Health Information, Health Articles etc.)

Main concern Quality of Service Delivery, as experienced in real time by the customer Everybody swears by quality service reality may be different

The Relationship Experience

Where is the relationship ? Out of sight, out of mind Merely catching customers or meeting their service requests: Is it enough? A relationship is to be established

2011: Policy issued

Renewals Received

2012-2030:

Maturity Claim Paid

2031: