The challenges of paperless communication

We have all received thousands of requests to eliminate paper correspondence. Almost every insurance company has explored ways to migrate their customers away from expensive paper documents. Successfully switching customers to digital delivery saves money on materials, production and postage. Yet not every generation is ready to eliminate paper documents. Unless the insurer has a clear strategy for keeping in touch with these customers, they risk cutting the important connection they have with them – the paper documents. The effect of this separation can be expensive. This is why outlining targeted communication strategies, with the objective of enhancing connections with each customer demographic, is critical.

Sending bills, policies, correspondence, and claims information isn’t strictly a cost of doing business. The creation and delivery of these communiques is an opportunity for personal engagement with members. In pursuing cost savings, some organizations have forgotten these documents can be a critical component of their customer relationships. While some people prefer paperless, others feel more comfortable getting their communications in the mail. Customer engagement can weaken if insurers replace paper documents with digital versions. This can cause an increase in customer service calls, open the door for competitors, and lead to fewer policy renewals. Insurers must be conscious of different preferences and provide Omni Channel delivery options.

Paper or paperless?

In many cases, older generations of consumers are more likely to open and read paper bills and other transactional correspondence when delivered by mail. These documents are the most consistent connection, and sometimes the only connection, carriers have with their members. What happens if they are converted to electronic-only? One survey indicated the open rate on electronic transactional communications decreases to about 15%. Losing a regular touch point with a significant portion of your customers should be cause for concern.

However, Millennial consumers – which are about to become the largest generation alive – are more inclined to open and read digital communications, as smartphones, tablets and computers are an integral part of their lives. Most of them find it very convenient to receive a notification email as soon as their bills have been issued, or when their pre-authorized payments have been completed. Yet, for insurance companies, one of the big challenges of paperless channels is succeeding in their marketing activities. Important notices, special offers, or personalized marketing messages are likely to languish unseen in customer email in-boxes.

Thus, enhancing customer engagement must be achieved through targeted communication strategies that support personalization capabilities and customer-preferred channels:

  • Direct mail – Sure, relevant and personalized campaigns are costly to develop, test and produce, but they should resonate with older generations. As a result, companies will see a higher response rates and repeat business from this demographic.
  • Email – The open rate on marketing emails is abysmally low. That is why advertisements, special offers and marketing messages need to be finely targeted; communications that are relevant to consumers have better chance to be read. Plus, the environmental argument carried by this type of digital correspondence is particularly appealing to younger generations.
  • Website or blog – Customers won’t visit a website unless they perceive a benefit. Advertising or another piece of promotional communication must drive traffic to the site. Again, the success of these marketing efforts comes with highly targeted, relevant content.

An insurance company successful at implementing paperless communications saves hard-dollar operating costs. But the soft cost of eliminating a consistent and accepted channel of communication is often overlooked. In the world today, insurers should maximize this established channel of communication with members, while encouraging paperless channels. Better long-term communication strategies should include Omni Channel delivery mechanisms, as well as high personalization capabilities, to ensure improved engagement with each generation of consumers.