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Study Shows That Psychographic Marketing Could Be the Best Way to Boost Annuity Sales

Marketing is a major part of an annuity agent’s focus when trying to identify potential clients, with many agents emphasizing home ownership, marital status, and other demographic cues to generate business. But recently, some annuity agents have taken to a different strategy: psychographic marketing.This type of marketing hones in on lifestyle, values, interests, and more […]

Study Shows That Psychographic Marketing Could Be the Best Way to Boost Annuity Sales
Marketing is a major part of an annuity agent’s focus when trying to identify potential clients, with many agents emphasizing home ownership, marital status, and other demographic cues to generate business. But recently, some annuity agents have taken to a different strategy: psychographic marketing.This type of marketing hones in on lifestyle, values, interests, and more personal information. This data is then combined with demographics to calculate the probability that a particular individual or household will conduct business with an annuity agent, according to Jeremy Rettich, the president of an insurance marketing organization in Tennessee. This helps agents narrow their list down to a manageable handful of prospects they can expect to attract.

Rettich explains that the benefit of this kind of outreach is increased efficiency, as well as monetary savings. Instead of marketing to an entire section of a city, agents can put their money into pockets of town that are more likely to work with them.

“Analytics and demographics are useful tools in targeting potential customers, but annuities sales, like all sales, rely heavily on a 1v1 interaction to successfully identify the needs of an individual,” says Todd Albert, CTO of Sell My Annuity. ”I think this type of marketing is good way of identifying new potential customers, but the ultimate sale depends heavily on the agent working close with his/her client to accurately understand their needs and objectives.”

Psychographic marketing could prove useful for a large number of agents, as the number of agents on the lookout for clients is on the rise. Cannex USA, a financial data compilation firm that focuses on informing financial providers of annuities, reports thatdouble the amount of annuity advisers searched their databases in the first quarter of this year as compared to the first quarter of 2013. The company tracks the number of times agents browse their database for different annuities, such as deferred income annuities, and single premium immediate annuities, and compiles this information in order to formulate the database’s usage.While this information does not necessarily indicate that the researched annuities were sold, it could outline annuity sales activity throughout the nation. Rettich states that the push toward an alternate marketing strategy was the result of his company’s investigations into claims of decreased annuity sales reported to the Independent Marketing Organization by annuity agents. His firm found that demographics alone were not enough to sustain sales.

To test out their hypothesis, Rettich’s team sent out two different advertisement mailings, one solely targeting individuals that matched particular demographics, and another that only went out to people identified as potential clients through psychographics. They discovered a higher response rate with the latter strategy, as well as a positive return on investment, compared to the former method, which lost the company money.

While psychographic marketing has yet to take over as a preferred sales tactic, and more studies need to be conducted to find Rettich’s firm’s findings more conclusive, psychographic marketing may ultimately become a useful strategy for annuity agents on a national scale.

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Written by Daily Inbox

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