Heightened customer expectations, demographic shifts and increasing usage of new technologies are creating new opportunities. Of late, I have been researching on the role of Social Media in new product development. It seems some industries (Retail) are leading in this area whereas others (Insurance) are still warming up to the idea. Insurers can exploit the opportunities by leveraging Social Media, not only to reach out to the customer (Participation mode), but also completing the feedback loop to improve or create insurance products (Integration mode).
Creation of an insurance product generally follows the below process.
Product Development in insurance can take 3 forms:
- Re-pricing or Refinement
- Add-on Features
- New Product
Although Social Media is already playing the role in maintaining the brand image and marketing of insurance products, it can also play a huge role in Idea Generation, Evaluation and Prototyping phases for all 3 aforementioned forms of Product Development.
Social Media is already becoming an important channel for ‘voice of customer’. A great product can take off easily whereas the news about the bad one spread much faster. Insurers can leverage Social Media to listen to customers. Using advanced analytics and techniques like Natural Language Processing for Sentiment Analysis, insurers can do trend analysis and demand assessment. Insurers can get insights about the lifestyle, buying behavior, social behavior etc. about users, which can help in further refining the segmentation. Product Managers can also directly interact with the target customers and prospects and can do dip stick analysis and competitive assessments.
Whether Insurer’s marketing strategy is being a ‘Leader’ or a ‘Fast Follower’, social media has something for both the strategies to aid in Product Development. The role of Social Media in understanding customer better and thereby developing customized products cannot be neglected for long.