PROMOTING LIFE ASSURANCE PART I

LIFE assurance cover business is one of the thriving sectors of the insurance industry. Insurance companies have been shifting their focus from motor and other forms of insurance business to life assurance because of the huge untapped market in this area.

Insurance cover products are usually not sought after, and therefore a lot of customer education, persuasion, and information are required in promoting them. Most insurance companies have not really appreciated the enormous role that personal selling can play in the marketing of their products and services.

Visits to most insurance companies, show company staff seated in their offices awaiting a knock on their doors from clients who want to buy insurance cover products.

The essence of getting sales representatives to town to prospect for clients has not been embraced by most insurers, although some have now introduced vans as mobile offices, especially for motor vehicles insurance cover, which may not come with a lot of technicalities that demand attention to details and guidance.

Most clients, both potential and actual, are quite apprehensive when it comes to parting with premiums to insurers. This is largely traceable to lack of adequate information and education, which are essential for customers in making the choice of the insurer or insurance company to transact with.

Insurers cannot effectively market their products without marketing communication or promotion. Personal selling is a vital marketing communication and promotional tool in the service industry today with the benefits of awareness creation, customer education, persuasion and corporate image building.

The importance of this promotional tool in the services marketing effort is what most life offices appreciate. Life offices need to apportion substantial percentages of their promotional budget to recruiting and training sales representatives for personal selling.

Promotion is defined as communication by marketers that informs, persuades, and reminds potential buyers of a product, in order to influence an opinion or elicit a response. It can also be defined as a marketing activity aimed at communicating marketing messages to the market, to influence buying decisions and offer incentives to enhance sales of a company’s product or service.

Additionally, promotion can also be defined as any form of communication a business or organisation uses to inform, persuade or remind people about its products and improve its public image. In this regard, I would like to argue that few goods or services, no matter how well developed, priced, or distributed, can survive in the marketplace without effective promotion.

Moreover, promotion is now accepted, by insurance executives as an effective sales tool; more product managers are qualified to use sales promotion tools; and product managers are under greater pressure to increase current sales. In addition, the number of brands has increased and competitors use promotion frequently.

I wish to discuss the role of personal selling in persuading, educating and informing prospects, and actual customers of life assurance products. I look at the perspective of insurance clients and their views on the relevance of personal selling, a role performed by sales representatives, in the promotion of life assurance. I focus on contrasting personal selling efforts with other awareness creation promotional tools in marketing of life assurance products.

I wish to discuss how insurance companies adopt the tenets of personal selling in their promotional efforts. This will help in ascertaining how sales representatives help in informing, educating and persuading the public about life insurance products.

Further, the role of promotional messages is essential to making the target audience favourably aware of the availability of products and services in the market place. Attempts to distinguish between advertising as satisfactory and sales promotion as unsatisfactory are somewhat artificial and arise from the fact, that advertising agents receive commission on space bookings from the media.

What specific tasks should promotion accomplish? The answers to this question may vary. However, marketers generally identify the following objectives of promotion; provide information to consumers and others; increase demand; differentiate a product; accentuate a product’s value and helps to stabilize sales.

Insurance informative promotion seeks to convert existing need into a want or to stimulate interest in a new product. It is generally more prevalent during the early stages of the product life cycle. People typically will not buy a product, service, or support a nonprofit organisation until they know its purpose and its benefits to them.

A frequent objective of the life office promotional efforts is product differentiation. Homogeneous demand for many products results when consumers regard the life office output as virtually identical to its competitors’ products. A differentiated demand schedule, in contrast, permits more flexibility in marketing variables such as price. Promotion is also aimed at accentuating a product’s value. By this, promotion can explain the greater ownership of utility of a product to buyers, thereby accentuating its value and justifying a higher price in the marketplace.

This objective benefits both consumer and business products. A life office promotional message must build brand image and equity and at the same time deliver a call to action.

Marketers must choose their words wisely when creating messages that accentuate their product’s value. I would advise insurers to stay away from five words: quality, value, service, caring, and integrity. These over used words are vague and tend to fall on deaf ears.

Sales of most goods and services fluctuate throughout the year. These fluctuations may result from cyclical, seasonal, or irregular demand. Sales of bottled water increase in the hot season and goes down in the cold season. Stabilizing these variations is often an objective of promotional strategy.

Communication is received by audiences from two principal sources; within an organisation and external sources. The later includes word of mouth recommendations from friends and editorials in the press.

Most clients get to know of the life office through sales persons compared to other promotional tools. This is largely because sales persons take time to adjust their insurance products sales messages to the understanding of prospects. Though quite expensive and time consuming, it is obvious that personal selling is unbeatable when it comes to awareness creation for insurance products.

A key advantage personal selling has, over other promotional methods is that it is a two way form of communication. In selling situations the message sender can adjust the message as they gain feedback from message receivers. This means if a customer does not understand the initial message or does not fully understand how the product works; the sales person can make adjustments to address questions or concerns. Many non personal forms of promotion, such as radio advertisements, are inflexible, at least in the short term, and can not be easily adjusted to address audience questions.

Customer education is very important in any insurance products sales attempt. It provides information and or training on what an organisation offers. Most clients were well educated about a particular insurance company, when they first encountered sales persons. It is recommended that the life office considers sales force training in order to convince some clients who feel poorly educated by sales persons. Look out for part II.