While insurance industries preferred a price-based approach in the past, they are now looking to upgrade their marketing strategies to a more customer-centric approach. Not only does the customer-centric approach help get new clients, but it also helps insurers improve client retention. One of the key factors of customer-centric marketing is customer segmentation.
Below, we discuss the different types of insurance customer segmentation to improve your marketing strategies and better understand your target audience.
Types of Insurance Customer Segmentation
Insurance customer segmentation refers to dividing your target audience based on different matrices. This allows you to create a more targeted marketing strategy for each group. Insurance customer segmentation helps reach out to potential clients and relate to their needs accordingly.
Insurance customer segmentation can be divided into four main types:
1. Segmentation Based on Demographic Data
Customer segmentation can be conducted on the metric of demographic data, splitting your target audience based on age, sex, race, family size, education, income, religion, and more. Demographic-based segmentation is one of the most common types of insurance customer segmentation and allows insurance agents to obtain the necessary data quickly.
You can collect data through different methods, including customer surveys, analyzing social media profiles, using third-party data providers, or using data management tools.
2. Segmentation Based on Geographical Data
Insurance customer segmentation based on geographic data includes dividing your target audience into groups based on location. This can help insurance agents understand the kind of insurance a potential client requires.
While the most common method of segmentation based on geography includes division based on state or city, insurance agents can go one step ahead and divide their target audience based on the characteristics of their location. This includes climate, population density, traffic, accidents, and more.
3. Segmentation Based on Personality Traits
One of the most effective insurance customer segmentation is based on personality traits. Such data includes customer interest, lifestyle, values, and other information on their personality. Such segmentation helps insurance agents create a targeted ad campaign and service package tailored to a particular customer. This increases lead generation and customer retention.
4. Segmentation Based on Business Companies
While individual customer segmentation is vital to creating marketing campaigns and reaching out to individual customers, insurance agencies also look at the characteristics of a company to divide different businesses into groups.
The data collected on such companies can include the industry type, revenue, location, employees, equipment, and more. Such segmentation is more common for business-to-business (B2B) companies that want to market to different companies.
Benefits of Insurance Customer Segmentation
Customer segmentation is a crucial marketing strategy for insurance agencies. Some of the major benefits of insurance customer segmentation include the following：
• Targeted Marketing Campaigns:
Dividing customers into groups allows insurance agencies to create and launch targeted marketing campaigns to engage an audience and improve customer satisfaction.
• Improved Product Development:
Customer segmentation helps insurance agencies develop services and packages based on customer needs, appealing to the customer base and improving the company's reputation.
• Improves Customer Retention:
By dividing your customers based on specifics and creating a targeted approach to customer satisfaction, insurance agencies can provide value and improve customer experience. This helps improve customer retention and even gives you chances to upsell.
Bottom Line
Insurance customer segmentation has become a crucial part of insurance marketing. While collecting data on your target audience and dividing customers based on that data used to be time-consuming, new tools in the digital insurance community have allowed insurance agencies to quickly and effectively carry out customer segmentation.
Wesurance is an Insurtech company in the U.K. providing a platform that empowers insurance companies and brokers to easily build, develop, and grow their digital insurance branches. Through a simple-to-use and easy-to-implement solution, you can build your own digital insurance quickly and with ease. No worrying about coding to integrate the digital insurance process into your insurance business. Learn more about us at https://www.wesurance.io/.
