“Prosumers” Changing the Face of Life Sales

When the world is full of Internet-savvy consumers who practically live online and have low expectations of their experiences with life insurance, what can companies do to stay ahead?

It’s a challenging world for the financial services industry, admits Maria Umbach of Maddock Douglas — one of the experts speaking at this week’s LIMRA conference in New York City — but there are ways that our new web- and social media-centered society can still connect with agents and producers.

Umbach says it’s mostly a matter of carriers and their network of salespeople understanding that sales don’t (and probably won’t, ever again) take place like they did in the pre-web world.

Instead, she says a new class of consumers have arisen, dubbed the “prosumer;” professional and proactive consumers who “hack into product information on the web” and make their decisions based on the informed advice of other consumers, not necessarily professional salespeople.

“It’s a matter of flirting with the uninterested and dealing with, unfortunately, a ‘crisis category’ in this business, products that people associate with negative emotions and low engagement — like root canals and funeral planning,” Umbach says. “Your job is to figure out how to move that needle from the negative to the positive.”

Engaging your audience

And not unlike the self-directed and creative ventures that consumers are able to accomplish online through sites such as YouTube, iTunes and Legal Zoom, Umbach suggests that insurers must make moves to get potential clients involved, engaged and best make use of their rapidly dwindling free time.

Some salient points for your own business? Consider the following:

  • The future is about less selling, and more business development. Building a reputation and considering your markets may be more important than quick sales.
  • Prosumers see your products as a commodity, not a service, necessitating less distribution-driven product development and more consumer-insight driven innovation.
  • Prosumers are willing to pay for a positive emotional experience, especially one that can help overcome the longstanding negative connotations of the life insurance and annuity buying experience.
  • Less social media, more social currency: Social media is being used the wrong way by the industry, she suggests. People are more interested in the social currency related to a product — what it means to them and their community — than in the products themselves.

The adjustment period

Fellow speaker Ben Moreland of Celent Communications says it may also be a rough adjustment period until the industry adapts, requiring the evolution of products and ways of figuring out how to better address consumers who are looking for value, security and convenience in their buying experience.

Despite the huge explosion in use of mobile devices, for instance, Moreland says that only 7 percent of the total use of smartphones is currently dedicated to financial applications or websites.

And companies who screw up in a big way with even a little client can pay the price, as evidenced by the viral video created by a disgruntled United Airlines passenger after his guitar was damaged by baggage handlers.

More than 2 million viewers watched his YouTube video, an astonishing number even back in 2009, and the impact cost United more than $180 million in stock value loss.

By Andy Stonehouse for LifeHealthPro

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