The seven Ps of marketing is a well-established blueprint that many businesses follow to sell products and services effectively. Each element plays a crucial role in ensuring that marketing strategies are aligned with the target audience and business goals.
But insurance companies operate a unique business model, requiring a set of best practices tailored to the industry’s specific needs.
In this article, Insurance Business discusses how insurance carriers and brokerages can use the 7 Ps of marketing to their advantage. We will also share an expert’s view on how businesses within the industry can apply this marketing mix to their campaigns.
The seven Ps of marketing, also referred to as the marketing mix, is a set of techniques that your business can use to promote your brand or product. In the case of insurance companies, this product comes in the form of insurance policies.
The seven Ps are:
We will discuss each element in more detail in the succeeding section.
These seven Ps play an important role in the success of your marketing campaigns. They allow you to define your target audience more clearly and help establish your brand identity. This marketing mix also enables you to identify your priorities and differentiate your business from industry rivals.
“It’s an unbreakable rule of business that if you want to get customers, you have to market yourself,” Jo Macdermott, founder at Next Marketing, shared with Insurance Business. “Marketing can seem like a chore when you have many other things to do but it’s important that you do it, and you do it well.”
Macdermott explained that understanding the most effective way to market your business allows you to save time, money, and effort, and ensures that you have the best chance of success.
She added that there’s an abundance of information out there to guide businesses that are trying to navigate the complex world of marketing. Unfortunately, many of these materials are designed for product-based businesses, leaving companies “marketing something more elusive and hard-to-define” often to their own devices.
“You aren’t selling a tangible product,” Macdermott shared. “The customer isn’t going to walk away with something they can hold in their hand and show off to their friends. What you are selling is your own knowledge and expertise, along with the experience of dealing with you or your business.”
According to Macdermott, marketing works differently for businesses with an intangible offering such as insurance.
“Product marketing strategy often centers on four main factors known as the four Ps,” she explained. “When it comes to marketing a service-based business, things get a bit more complex and instead of four, there are a total of seven main factors you will need to think about if you want to have a complete, effective marketing strategy.”
Here’s a quick guide to the 7 Ps of marketing for service-based businesses, along with a few ideas to help you apply these elements to your own marketing strategy.
One benefit of selling a service is that it can be customized to fit the unique needs of each client. But while your business will often benefit from this level of flexibility, it’s still important that your key selling points remain consistent.
“When you are selling a service, what you have to offer is usually more fluid than a solid, physical item,” Macdermott shared. “It can be adjusted and tailored for each purchaser. Unlike products, you don’t produce what you are selling until the client is ready to consume them.
“If you want to market your service successfully, the first step is to define what it is you’re actually selling. Ask yourself, how much of it is customizable for different customers and how much of what you offer needs to be the same for the sake of consistency?”
Macdermott added that although you have flexibility around what you’re offering, you still need to differentiate yourself from the rest of the market.
“You need to figure out how you will stand out and make sure that your main selling points remain the same even as you adapt your services to the needs of each individual client.”
The same applies to insurance policies. The features and add-ons one client can access for the same type of policy can vary depending on their profile and personal circumstances. That’s why it’s important for insurance businesses to identify the key differences between insurance policies and how these relate to their target market.
Pricing is another essential element of successful marketing, according to Macdermott.
“Charge too much and you are likely to struggle to find customers,” she explained. “Price yourself too low and you may end up selling yourself short, as well as earn a reputation for being cheap. Getting the balance right can be tricky.”
She added that pricing services comes with additional layers that make the process more challenging compared to pricing tangible products.
“There are several factors you need to think about when pricing your services. When you are pricing products, you can calculate a charge from the cost of the raw materials, production, and distribution, but pricing your services is a more complex process.
“When considering how much to charge, you will need to think about the market rates, your level of expertise, and the benefit to the client, as well as your overheads, paying employees and any other expenses. Don’t forget to include a reasonable mark-up so you get a profit.”
For insurance policies, however, pricing isn’t always the main differentiator. Clients also often look for policies that offer the highest level of protection at the best possible price. This car insurance comparison is a good example of how the top insurers differentiate themselves from each other not just via pricing, but also through the benefits and features their policies offer.
The physical location of your business is another crucial element of the 7 Ps of marketing as it plays a part in forming your overall image.
“Your office or business premises is like the packaging on your product,” Macdermott explained. “Clients will form an instant impression of you and your abilities based on what they see. Make sure their impression is a good one!”
Among the factors to consider when choosing a physical space are its location, if there’s adequate parking, if it’s appealing to look at, and if it creates a professional image.
But apart from the physical location, Macdermott adds that it’s important to consider your “online location.”
“In most cases, your website will be the first contact that your potential clients have with your business, so think of it as your virtual shopfront. With so many people turning to online facilities to find services, it’s even possible that your clients may never actually visit your physical premises. Your website should create a positive, memorable impression and be easy to use.”
Brand awareness and recognition are important if you want customers to purchase what you’re offering. This is where effective promotion comes into play.
“Services, unlike products, aren’t unique. Chances are you are not the only person in your area to offer the same service,” according to Macdermott. “Why are people going to choose you and how are they going to find you? Promotion is essential when you are marketing a service-based business.
“Even with the best skills, the most up-to-date software, and a plush office or website, if you don’t take a proactive approach to promoting yourself, nobody will know you’re there. If you are going to be successful you will need to think about how and where to advertise your services, plan a promotional strategy, and regularly analyze the results.”
Brand recognition is also one of the biggest reasons why many of the industry’s top players are investing tens of millions of dollars in advertising. If you want to see what a successful insurance ad looks like, you can check out our picks for the best insurance commercials of all time.
Customer satisfaction is a key determining factor in whether clients use your services again or refer your business to friends and relatives. Your people play a vital role in providing quality customer experience.
“Unlike a product, which exists independently of the person selling it, a service is indistinct from its provider,” Macdermott explained. “Whether you are a one-person operation or you have a team of employees, it’s important that customer service is the priority, and a high standard of professionalism is maintained at all times.
“Contact employees should be given specific customer service training and the way they deal with the public should be aligned with your brand values.”
Having a clear and efficient process not only enables you to stay on top of your day-to-day operations, but this also allows you to offer customers a reputable service. This makes your business’ operational process an integral part of the 7 Ps of marketing.
“To present a consistent image and brand, you will need to make sure your level of service is consistent, reliable and your clients know what to expect from you every time they use your services,” Macdermott advised. “This usually requires some level of process implementation, especially if you have a large team of advisors and support staff.
“Even if you are a small business or a one-person operation, you can probably benefit by creating a few basic processes to allow you to keep on top of everything. By creating systems and processes you can ensure that your clients receive a consistent experience every time they deal with you, and that you continue to live up to their expectations.”
She adds that showing clients that you’re efficient and reliable can build their confidence and make it more likely that they will refer you to others.
“If you have multiple staff members, good systems equate to more consistent service delivery and happy clients.”
In insurance, it’s important that businesses understand every step of the process that clients go through and how each step should be handled. This begins from when they start shopping for a policy to when they sign the documents, until when an insurance claim is filed.
Physical evidence is especially important when you are selling something intangible like a service.
“Although there may be no physical product to associate with your business, think about the physical experience your clients have when they visit you,” Macdermott suggested. “Is your office set up to be client-friendly? Do they have comfortable chairs and magazines to read while they wait? Do the décor and general setting match the image you are trying to present?”
She added that service-based businesses should think about the way they present their offerings.
“Your advice and expertise may not have a physical manifestation, but you can create physical evidence in the form of reports, case studies, and fact sheets. Physical brochures and marketing materials can be reassuring to clients as they give them something tangible to see and hold on to.”
Insurance Business created a list of key questions relating to the 7 Ps of marketing to make sure that insurance companies are using the marketing mix effectively. The details are in the table below.
When used correctly, the 7 Ps of marketing allow service-based businesses such as insurance companies to establish a reputable brand and attract clients. This can help pave the way to success and profitability.
“Services marketing does require a different approach to marketing a product but with a bit of thought you can successfully market yourself to clients, increase your leads and sales, and watch your business go from strength to strength,” Macdermott concluded.
An effective marketing campaign comes in different forms. If you want to get an idea of how one looks like, you can check out our choices for the best insurance ad campaigns.
Do you think the 7 Ps of marketing suits the constantly evolving insurance landscape? How can insurance companies use this marketing mix to their benefit? Feel free to comment below.