Investing In Social or Mobile Technology? Go P.O.S.T.-al
Insurance Experts' Forum, September 18, 2009
Enough already! Is this another article about the genius of Twitter, Facebook and the iPhone?No…relax and keep reading. Social media and mobile technology are becoming the Lindsay Lohan of the media—all glamour and no substance.
Is Dell the only company making money with Twitter? There are very few publicized examples of true return-on-investment generated from social or mobile technology. I believe there are several dozen success stories, but smart executives are not divulging their secrets to the media or analyst community. Call it first-mover advantage.
Yes, mobile and social channels get brands closer to consumers. Forrester’s own data shows a strong positive correlation between social media, improved customer experience and revenue growth. And social and mobile are part of the digital ecosystem that allows consumers and brands to communicate directly. Firms are using Twitter to improve customer service; address customer complaints and even sell products (e.g. see Dell). All of these 1:1 interactions create loyal, brand ambassadors who may influence other shoppers.
But social and mobile channels are part of a firm’s overall multichannel strategy. They are not stand-alone channels responsible or capable of generating bottom and top-line growth.
Nationwide was the first U.S. insurance company to develop an iPhone application. My colleague, Julie Ask, and I wrote a case study on the success of Nationwide’s iPhone experiment. State Farm and AAA released similar apps this year, too.
Nationwide developed their mobile strategy around it customers. Yes, they were excited by the chance for innovation and differentiation in a crowded market. But they based their entire iPhone application on consumer insights. Many firms don’t.
The firm asked their customers and consumers what features and functionality they wanted from a smart phone application developed by an insurance company. Claims, accident toolkits and even a flashlight function ranked as the most-desired functionality.
Nationwide then built an app for a small, but hyper-loyal customer segment—iPhone owners. iPhone owners tend to be more affluent, younger and more educated than the general population. They are the next generation of auto insurance customers that Nationwide wanted to attract.
Forrester is frequently asked to predict and analyze emerging technology trends. How can social media impact my business and improve my customer experience? How can we use mobile to improve our agents’ workflow and efficiency?
My answer and your answer should always start with an acronym: P.O.S.T. P.O.S.T. is a simple methodology created by Forrester to evaluate any social, Web, mobile or IT investment. Its effectiveness is based in its simplicity.
1. People. Review the profile of your target audience. Most of the data is available in your customer database. If it’s not there, then ask your customers. When evaluating your technology strategy, consider two other elements of the people equation: 1) your employees, and 2) your partners. You need a target customer segment with demonstrated or emerging behavior to create the foundation for new channel or technology investment. Otherwise, scrap it. It makes no sense to build a $500,000 Facebook app if you don’t have a current or a growing customer segment using that channel. You also need to evaluate your internal resources (human and capital) and external partners to determine if you can succeed.
2. Objectives. Decide on your goals. Make sure they align with your enterprise business objectives. It gets easier after you solve the People question. The objectives must be measurable, complimentary and should focus on growth for the company; efficiency to improve profitability or have the potential to positively impact your target customers (e.g. improve customer experience, satisfaction or retention).
3. Strategy. Determine your approach to meet your objectives. This is the game plan to determine how the firm is going to allocate resources to meet the objectives. Don’t over think—develop a plan and execute.
4. Technology. Choose the technologies that will enable you to implement your strategy. Technology is the last step. It is the least important. You will fail unless you account for P, O and S. Technology is merely an enabler of the objectives based on your target customers.
Use the P.O.S.T. method to evaluate social, mobile and any other technology investment. The P.O.S.T. may tell you to stop where you are—sometimes the best decision is to not move forward.
Do you agree or disagree?
Chad Mitchell is a senior analyst with Forrester Research. He covers trends in global insurance; eBusiness and channel strategy; emerging Web and call center technologies; consumer trends in researching and buying insurance; and best practices and rankings of leading insurers.
The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.
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