Effective Cross-Selling & Up-selling for ROI Improvements in the Insurance Marketplace

In last week’s post I discussed retention in insurance, but this week I decided to focus on ROI tactics. I have found throughout my entire 25+ yr financial services/insurance career that even with the availability of today’s technology, very few companies put anywhere near the same emphasis and resources on incremental customer revenue that they put on pure new account acquisition. And in fairness to my Marketing brethren, the first line-item on every new annual Plan is NAP, aka “New Annualized Premium.”

I was asked to speak at a recent PIMA Conference in FL, and the research findings that I presented reinforced that insurance companies are still not taking advantage of opportunities to cross-sell/up-sell EXISTING customers – with the next-right-product, gleaned obviously from a robust data analytics component to their marketing mix.

Net/net: existing customers overwhelmingly confirm in research findings that irrelevant content is worse than no content at all. Thus, although a lucrative opportunity to increase revenue is appealing, it must be logical, i.e., offering me a 529 College Savings Plan would cause more harm than good, as database marketing techniques would reveal no children remain in my household.

How to practice effective cross-selling

Significant ROI improvements (double, even triple-digit) can be achieved by utilizing today’s digital technology to drive the next product cross-sell or up-sell. An example, which is only being utilized by 7% of insurance carriers responding, is to utilize the renewal billing notice as a selling device. For those opting for an electronic statement, the same messaging can be pushed out in a pdf format. And for those CFO’s in the audience, this is a low-cost, nearly no-cost means of acquiring incremental premium income.

In summary, although superior Customer Experience is the KEY to customer satisfaction, and thus retention, incremental revenue opportunities abound for the saavy marketing executive. Unfortunately it is yet to be fully-embraced by many of the companies in my industry.

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