I have a picture of my great grandfather taken in 1947 by a newspaper reporter covering an insurance convention. Maurice G. Smith is sitting in the Midland National Life booth, where new agents were recruited and existing agents got a chance to meet people from the home office and learn about new products and features. While there is a family resemblance, his suit is cut a bit differently from mine and he wore a cool straw hat that I could not get away with today.

The reason I have that particular picture is because, like Maurice, I have spent my career as an insurance professional. And exactly like him, I have spent plenty of days sitting in a booth at an insurance convention for exactly the same reasons he was. Virtually everything about my life is different from Maurice’s except how we do our job, and in that regard we haven’t changed much at all in the last 65 years.

The web has done a lot for the insurance industry – electronic payments, online underwriting, instant quoting and policy delivery, and on-site claims settlement and payment. These and many other innovations primarily serve to make buying insurance faster or less expensive – but for the consumer that does not automatically translate to a better experience. And a lot of insurance agents out there probably agree.

What is missing for a great consumer experience?

As an insurance agency manager and owner I was focused on winning referral customers. As I look back, I believe I had the right idea for the wrong reason. I wanted referral customers because they were less expensive to acquire. It was easy money. I was missing the fact that referral customers aren’t just cheaper, they are better.

Referral customers tend to have better product knowledge, ask better questions during the sales process, offer more complete answers to underwriting questions, are more receptive to expert advice, and most importantly, have realistic expectations of what their policy will and won’t do.

Consumers are very good at helping each other choose financial products. When the industry adopted technologies to move our customer interactions online, we lost the value of those referral interactions.

This concept works just as well in the professional world with insurance carriers recruiting and training appointed agents. Insurance conventions work because when agents meet each other and exchange ideas, we get better agents.

Here are a few tips for tapping this referral power online to deliver better experiences:

Trust your customers and partners to talk about you. In 1947, customers referred their neighbors to an insurance agent, and insurance agents took the time to travel to conventions to collaborate with their peers. Those conversations helped insurance companies then, and they can still help today.

Motivate your customers to market for you. There are many motivations:

  • Altruism – consumers and professionals naturally want to help their communities. Need a good proof point? Watch strangers line up for movie tickets and ask each other for recommendations. People are good at helping each other.
  • Ego – consumers like to be recognized as experts just as much as professionals. People contribute to communities because they like how it makes them feel.
  • “Paying it forward” – consumers that use word of mouth content to make decisions are more likely to contribute word of mouth content to help others decide.

Be truly social. Finally, if you are going to use social tools to get your customers talking, make sure your actions are really social. Social is a dialogue, not just another way to broadcast your own message. Insurance agents don’t go to conventions to hear speeches from insurance companies. Likewise, consumers don’t ask their neighbors for a recommendation hoping to be handed a sales pamphlet.

The best social implementations are nothing more than a new way for your customers (the consumer or your partners) to talk with you, and about you – just like the convention Maurice G. Smith attended in 1947.

The Conversation Index Vol. 3