How to Keep Customer Acquisition Costs Low
COVID-19 made the insurance industry move online faster than anyone had planned. Budgets were redistributed to build digital interfaces for clients since face-to-face meetings were not happening. Resources were shifted to digital sales. And shifts to long-term planning and thinking through the sales process were made to accommodate our “new normal.”
But with all those necessary expenditures, how can insurance companies keep their customer acquisition costs low?
Digital Sales Bring New Costs & Risks
It’s no surprise that Deloitte reported that 40% of insurance companies expect to increase investment in direct online sales. Insurance companies’ marketing departments increased their digital budgets by 11.5% last year and expect another 10% increase over the next 12 months.
This is smart planning, but it brings with it new risks, especially in terms of costs, compliance and cybersecurity.
With the world doing so much business online now, cybercrime has increased. While ad fraud and lead generation fraud have always been handled as “the cost of doing business” and written off as an inefficiency, rates are on the rise now, making it a costly business risk to ignore them.
As a cybersecurity company specializing in ad and lead fraud – and with many clients in the insurance and financial industries – what we see happening is this:
Criminals are using bots and click farms to fill in forms using data stolen from recent hacks and then sold on the dark web. The data is real, but the customer never consented to be contacted. So, when you or your call center contact that client, you may think you have proof of consent, but what you really have is a TCPA violation that can cost you at least $500 PER CALL!
Let’s face it, it’s already expensive to acquire a new insurance customer. Insurance industry ad keywords are among the most expensive there are, costing between $30 and $50 per click. Overall, the average insurance customer acquisition cost (CAC) is between $500 and $800.
Increased fraud has caused an increase in those costs. The most recent Oxford BioChronometrics Quarterly Affiliate Benchmark Report shows that 80% of all affiliates in the industry deliver between 12% and 25% of fraud. And those are the numbers when we take out the best and worst 10% of performers. No company can afford that kind of waste in our “new normal.”
How to Keep Those Costs & Risks Low
If you want to keep your CAC low, you need to take a serious look at your digital lead generation now. First, you need a solution that lets you detect fraud in real time. That will ensure you have the clean data you need. Of course, you need that detection to be fast and to cost less than it would cost you to just let it slide.
In other words, you need Oxford BioChronometrics’ fraud detection. We can keep fraudulent data from entering your customer data platform and skewing your post-campaign analysis. But most importantly, we can help you keep your CAC low, so your profits can increase.
Here’s your takeaway:
Oxford BioChronometrics has a proven track record in the insurance industry of:
- Instantly lowering customer acquisition costs by 12% – 25%
- Mitigating risk exposure (settlements over TCPA violations) by filtering out fraudulent leads
- Providing clean, unpolluted campaign data.
We’ve helped other companies like yours for years. Now let us help you.