The Beginner's Growth Hacking Guide to Funnel Optimisation for the Insurance Industry
Funnel optimisation is a crucial element of growth hacking for the insurance industry and it starts with understanding the customer journey. By adopting the pirate funnel model and using data-driven marketing strategies, insurance companies can identify bottlenecks and inefficiencies, generate more leads, and optimise each stage of the funnel to increase conversion rates. Techniques like A/B testing and customer journey mapping can help to create a better client experience while retargeting and referral strategies can drive revenue growth. Tashi Hati specialises in funnel optimisation and can help insurance agents and brokers achieve their growth goals through data-driven marketing strategies.
Introduction
The insurance industry is an important sector of the economy, providing financial protection and risk management to individuals and businesses. In Asia, the insurance industry is rapidly growing, with countries like Indonesia experiencing a surge in demand for insurance products and services at a rate of 8.67% on average annually for the past five years. Yet, the industry faces numerous challenges with low conversion rates, lack of education and consumer trust.
As an insurance broker or agent, you know the importance of generating leads, improving conversions and driving revenue. However, especially with the rise of InsurTech, traditional methods of sales and marketing may not be enough to keep up with the evolving landscape. This is where the “Growth Hacking” strategy can become an effective and low-cost method to stay competitive within the marketplace.
Growth Hacking, coined by Sean Ellis in 2010, is a data-driven approach to rapid experimentation of different tactics and determining which results are the most effective one for a company’s growth. At Tashi Hati, we primarily focus on sustainable growth and refer to this system as Growth Marketing. Growth Marketing focuses on more than just top-of-the-funnel creative-led traditional marketing. It combines product, marketing, data and operations, giving this discipline a more holistic approach.
One powerful tactic is funnel optimisation, which involves analysing and optimising each stage of the sales funnel to create a better client journey, increase lead generation and ultimately drive more revenue. By optimising the sales funnel, insurance companies can identify and address the inefficiencies and bottlenecks that are hindering their growth.
At Tashi Hati, we specialise in understanding the unique challenges of service industries, like insurance, and how to overcome them with data-driven marketing strategies with a customer-centric approach. This article will dive deep into the fundamentals of growth marketing metrics and how to funnel optimisation strategies can be an alternative method of how insurance companies can grow their business in today’s environment.
Using the AARRR Pirate Metrics for Funnel Optimisation
Growth marketing adopts the pirate funnel as opposed to the traditional sales and marketing funnel, which is awareness, interest, desire and action (AIDA framework) or a slightly more modern adaption of this to include elements like loyalty.
The pirate funnel is the foundation of growth marketing and was developed in 2007 by Dave McClure. Its elements are Acquisition, Activation, Retention, Referral and Revenue, with the acronym AARRR - giving it the name pirate metrics. This funnel focuses on the consumer lifecycle and conversion behaviours. It is suggested that founders stick to 5 to 10 metrics for the whole cycle. While we’re specifically discussing the insurance industry in this article, these metrics apply to any business.
Acquisition: How are people becoming aware of your company?
The pirate funnel starts with gathering extensive information about their leads, specifically, where they come from.
To create a better buyer persona it’s best to collect as much data about their characteristics, such as age, location, background and interests. This allows you to create targeted personas and evaluate whether they are using the right acquisition channel to drive growth.
The three questions you should ask yourself are:
What are the highest volume channels? (%)
What are the lowest cost channels? ($)
What are the best-performing channels? (%)
For insurance professionals, this could mean website visitors, SEO, email marketing, PR and business development relations. Ultimately it is your goal to gain a deeper understanding of your visitors so that you can target audiences more precisely leading to more traffic.
Activation: How many people are showing initial interest in your company?
The activation phase is all about getting your client to start using the service, also known as the “Aha” moment when they realise the true value of your offer. In traditional marketing, this part is often overlooked but it is one of the most important ones. It is when the customer makes the decision to stick with your company.
The goal is for your lead to start using your service, for example, sign up for your newsletter, but your strategy is to offer shortcuts by conducting A/B testing and landing page optimisation. For insurance professionals, these metrics might be filling out a form for a quote or contacting the broker for more information. The conversion might look like the number of activated leads / total number of leads visiting your website.
Retention: How many customers continue to engage with your company?
While acquiring new customers is essential, it is far more cost effective to retain current ones. Repeat engagement shows that the lead is having a positive experience and can be measured by email open rate, repeat visits, time in between purchases or customer churn.
At Tashi Hati, we use retention strategies such as sending personalised emails and maintaining a strong presence on social media or blogs to provide valuable insights for the customers. For insurance professionals, this metric could be how many businesses renew their policies year after year.
Referral
Referrals are another cost-effective metric compared to customer acquisition that can lead to brand loyalty. Word of mouth is the best social proof that is also scalable. The goal with referral is not quantity, but rather quality.
However, it is important to note that the referral metric is only relevant if you have a great product. The last thing you want is the power of viral marketing about a bad product or service. For the insurance industry, this might look like how many people are referring you to their friends or family to do business with them.
Revenue: How much money is the company generating from the customer?
The last stage of the pirate funnel is revenue which looks at the minimum revenue and breakeven revenue of your service. It is not only important to look at increasing the revenue, but also to increase the customer’s lifetime value while decreasing costs.
In insurance, this might look like the premiums collected from policyholders. It helps that with this industry, you can have flexible offers which when used strategically can help you increase the customer lifetime value.
Funnel Analysis and Optimisation
Measuring these metrics is not enough, companies must be able to analyse and optimise them to be able to adapt to the changing market environments. Here is a 5-step framework that you can use to help you along the way.
Define the metrics: Identify one to two metrics per stage of the funnel. Less is more as it provides clarity and direction.
Analyse the data: Once you have set the metrics, analyse them to identify where the bottlenecks and inefficiencies are. When first starting out, it is best to compare yourself with the industry standard metrics. For example, according to Mailchimp, the industry-standard average open rate for newsletters in the insurance industry is 21.36%.
Identify the problem areas: Identify which part is not up to industry standard and where you are losing your customers. For example, you might want to answer why visitors are leaving your website without filling out a lead form or not converting into policyholders.
Develop a solution: Once you identify the most important bottlenecks, you can develop a solution to optimise the pirate funnel. This might mean reducing the steps it takes to fill out the lead form or offering referral incentives.
Test and iterate: It is important to test these solutions and iterate quickly so that you can grow at a faster rate.
There are various techniques that can be employed to optimise this funnel. Tashi Hati starts by conducting a customer analysis to understand the specific pain points that leads are experiencing at each stage so that the right solution can be offered. Surveys and customer feedback can help identify the areas of improvement.
Messaging plays another crucial part. Is the customer aware of the jargon you are using? Ensuring the customer understands the message you’re trying to convey while remaining consistent across all channels helps build trust and builds on brand awareness.
It is also important to focus on personalising and segmenting your clients so you can send out targeted messaging. A personalised approach, especially in the insurance industry, helps your company to resonate with your client's needs and interests.
Lastly, analyse your data to track behaviours continuously so that you can make well-informed decisions throughout the funnel. The last section of this article will go through a few optimisation strategies to help give you ideas for your business.
Lead Generation and Acquisition Strategies
There are many ways to acquire new leads, but as mentioned, the most important ones to focus on are:
What are the highest volume channels? (%)
What are the lowest cost channels? ($)
What are the best-performing channels? (%)
Some techniques include targeted advertising, however, at Tashi Hati, we prefer to start with organic methods allowing us to test our hypothesises without a large budget. These methods include content marketing which demonstrates the knowledge of your company, referral programs by incentivising customers, and integrated multichannel marketing strategies ensuring you have clear messaging. Our approach includes a combination of online and offline channels and is tailored to the unique objectives of each firm.
A/B Testing and Customer Journey Mapping
A/B testing refers to testing two versions of a component, such as a webpage or email to determine which is most effective in achieving the desired outcome. By analysing the test of these results, you can make better decisions about which strategies to implement to improve your customer journey. Customer journey mapping allows us to gain a visual representation and analyse the customer feedback at each stage.
Retargeting and Referral Strategies
Retargeting and referral strategies are two important techniques to help insurance professionals boost their marketing efforts, and Tashi Hati can assist in making the most of them. Retargeting can help bring back potential customers who have left the funnel by showing them advertisements on different platforms, like social media and search engines.
Referral strategies, on the other hand, can build loyalty. We do this by creating personalised campaigns that incentivise customers to spread the word. This could include referral discounts, giveaways and loyalty programs.
Revenue Growth and Funnel Metrics
Measuring revenue is ultimately the metric that matters along with customer acquisition costs, lifetime value and conversion rates. With the right data-driven insights, these metrics help us understand which metrics should be prioritised or avoided.
The Wrap Up
In the fast-paced world of insurance, funnel optimisation is crucial for staying ahead of the game. One way to do this is by adopting the pirate funnel approach, popularised by startups. By making data-driven decisions, companies can identify bottlenecks and inefficiencies, optimise each stage, and generate more leads using A/B testing and customer journey mapping. The end result? An improved client experience and increased conversion rates. But that's not all. Tashi Hati can help insurance companies take things to the next level with retargeting and referral strategies, leveraging data analytics to track funnel metrics and optimise revenue growth. Ready to take your insurance business to new heights? Let Tashi Hati show you how it's done - get started today.