Social media is not out of the infancy stage, yet we are already starting to witness a transition to what might be the next step in how insurers approach the topic.
Social Media is an opportunity for companies to engage with customers, to become more transparent, open and personal. Most companies, not just insurers, have recruited Twitter and Facebook followers steadily, nurturing a new relationship, careful not to come across as too “corporate”. Good social media behavior dictates that you develop a network of fans building trust; these fans become loyal customers and after some ritualistic mating period, may even become brand advocates. This is not completely natural for insurers who can struggle to understand how, why or even if they want to establish an intimate relationship with so many consumers about complex and frankly unpopular products.
USAA has long been regarded an advertisement for “good” social media; they have attracted fans with whom they actively engage, discussing products and relevant subjects such as the potential government shutdown. They trust fans to publically rate and review their products and services. For USAA, this has not been an overnight success: it has taken over two years, during which time they added Facebook fans at a monthly growth rate rarely exceeding 8% or dropping below 6%. They have shunned sweepstakes or any incentives to recruit fans yet more than 172,000 have joined them. The level of engagement is impressive and fans regularly start more than 2,000 new and relevant discussions on the USAA Facebook page every month.
But there is another way. Recently, Farmers Insurance collaborated with the producer of the very popular Facebook social game ‘Farmville’. The campaign lasted not 2 years but 24 hours from midnight on 23 June. During this period, the company was adding new fans, in exchange for virtual gifts, at the rate of 100,000 per hour and at midnight on the 24th, they had amassed an additional TWO MILLION fans.
Is this the beginning of a new departure in social media? Farmers rented a crowd, but is that a bad thing? Clearly, the relationship between Farmers’ and these fans does not compare to USAA and you can expect some, possibly many fans to drift away. This Facebook generation is hard to reach through traditional marketing and Farmers have a window of opportunity to influence this group and potentially their friends. With each fan having an average of 130 friends, and the Farmville crowd will far exceed this, the reach (albeit temporarily) is a staggering 286 million consumers – so forget the SuperBowl. Farmers is the latest and certainly the most extreme example but every month, at least one insurer has a big spike in Twitter or Facebook followers and this is almost always the result of ads or other traditional marketing techniques (and money).
So is social media about transparency and creating a dialogue with customers; is it about changing the way we do business or a relatively inexpensive way (to date) to reach large numbers of potential customers? We want your input; this is an important debate for all insurers. Facebook, Twitter and Linked all need revenue and ads are becoming more important, where do you sit in this debate, what is the better short and long-term strategy?
