It is easy to sell candy. Candy tastes nice. It is full of sugar that our body craves, and we have to use our willpower to stop ourselves from overindulging.
If you want to sell me more candy, you just need to make it easy to buy and hard to avoid. You can ensure the packaging is bright, bold and colorful so that it grabs my attention and makes it hard to ignore my cravings. You can place the candy by the supermarket checkout so that it tempts me while I’m waiting to be served.
It is much harder to sell sprouts. Although they are good for you, sprouts just do not taste good to many people. We will not sell many more sprouts just by making it easier to buy sprouts. Wrapping them in beautifully colored packaging and placing them by the supermarket checkout is unlikely to lead to a dramatic increase in sales. Few people would find themselves unable to resist impulse-buying a pack of sprouts.
It is both fortunate and unfortunate that selling life insurance is much more like selling sprouts than selling candy. Fortunately, like sprouts, life insurance is good for you. It protects families from losing their homes and livelihoods and enables people to leave a legacy to future generations. Unfortunately, for most people, life insurance does not taste good. We do not crave it, and we do not have to fight an impulse to stop buying more of it.
So why, when we are creating digital distribution channels, do we assume that selling life insurance has suddenly become like selling candy? All the focus is on making it as easy as possible to buy life insurance by reducing friction. This is undoubtedly important, but it is not the whole picture. Carriers focused solely on reducing friction continue to see disappointing digital sales figures.
Part of the reason is that we are looking to the wrong industries for inspiration. I have heard countless speakers at industry events talking about what we need to learn from businesses such as Amazon and Netflix. But Amazon and Netflix sell very different products than we do. I want to listen to music, read good books and watch great content – it tastes good. So just make it as easy as possible to do and as hard as possible to stop (Netflix’s auto start).
People who build digital systems are very good at reducing an activity to its core. They can identify waste and unnecessary steps to such an extent that experiences become so simple they are almost frictionless. But there is a danger to this approach: What digital designers see as friction may actually be persuasion. What might seem unnecessary may actually be core.
A technologist might look at a server in a restaurant and think: “We don’t need a person to do that job; we can automate that.” It is only a few months later when sales, return visits and customer reviews are down that they realize the server does more than take your order and deliver your meal – the server welcomes you, makes you feel at home and signals the status of the establishment. In automating the insurance purchase journey, we have forgotten that financial advisers and life insurance salespeople do more than facilitate a purchase – they persuade the customer to make the purchase.
We all know the oft-repeated adage that “life insurance is sold not bought.” But we seem to forget that when creating digital insurance platforms.
So how do we sell more life insurance online? What does persuasion mean? What is clear is that while many people have a problem that life insurance can solve, most do not realize they have this problem. To sell life insurance online, we must awaken the need for it – just as advisers and salespeople do.
Prompting awareness of a person’s mortality and morbidity can awaken a need. Traditionally, we have accomplished this by asking difficult and even disturbing questions:
These questions provoke an instinctive emotional response. For some, the answers will be comforting: “I have $1 million in the bank, so my family will be fine.” But for many the answers are worrying: “I don’t know how they’d cope.” The questions awaken a need people did not realize they had. They become anxious and determined to solve the problem they are now very much aware of.
The challenge is to effectively replicate this approach online. Can a Facebook or Google ad grab someone’s attention and make a strong enough connection for these types of questions to work? Or will people react negatively to being asked such questions in this context? This still needs to be tested and proven either way.
It may be that digital channels need a different approach, one that matches the context and the mood of people as they interact online. Carriers and startups are focusing on using more positive messages and storytelling techniques to engage customers. But too often these approaches lack real emotional punch – to awaken the need, we might need to shout rather than whisper.
More fruitful could be approaches that work in a slower, less direct way but still use emotional intensity and tap into the inherent sociability of digital experiences.
For example, crowdfunding platforms that enable people to ask their friends and families to help pay their medical bills can help increase the demand for health insurance rather than reduce it as is often feared. Seeing a friend or family member suffer a serious illness prompts awareness of one’s own mortality and morbidity. Seeing them have to ask others to fund hugely expensive but potentially life-saving treatment makes people want to avoid ever finding themselves in the same situation. This awareness has awakened the need for life insurance and opened a potential sales channel. Mutual aid platforms using this approach are growing fast in some markets and appear to be increasing the size of the market rather than just winning market share.
The potential for digital insurance sales is huge, but so are the potential pitfalls, which is why we at RGA have made this an area of focus. What is already clear is that we need to stop making assumptions that are simply not true and hoping people will suddenly crave life insurance in a way they never have before. We need to start creating products, platforms and communications based on how people really think and behave rather than how we think they should. If we continue to design our digital journeys for the ideal person, in effect we are designing them for no one.
