The insurance industry is undergoing a significant metamorphosis as Millennials and Gen Z take center stage as consumers. For insurance providers, reaching out to people in this demographic is crucial to securing a future stable client base. With anyone over the age of twenty-six required to have their own medical insurance, the timing to engage these younger clients is more pressing than ever. Adapting to the needs and preferences of Millennials and Gen Z will ensure that your company forms lasting relationships with these generations. Traditional outreach methods such as phone calls and paper mail are losing efficacy as the focus shifts toward digital communication channels. Based on our research, SMS messaging has emerged as a highly effective way to communicate with Millennials and Gen Z.
SMS messaging has become so effective because of the unique characteristics and experiences of Millennials and Gen Z. Millennials, born between 1981 and 1996, have witnessed the rise of the internet, mobile technology, and social media. They grew up when the internet and mobile technology entered daily life, becoming easily accessible. In general, they are tech-savvy, value convenience, and often prefer digital communication over face-to-face interactions. Gen Z, born from 1997 onwards, has grown up with smartphones and has a natural affinity for instant communication. They expect immediate responses and prefer platforms that offer quick and easy interaction.
Both groups value personalized and authentic communication. They are more likely to engage with brands that speak their language and cater to their needs. In this context, SMS messaging emerges as a powerful tool for insurance providers to capture their attention and foster meaningful engagement.
Our research has shown us that SMS messages boast an open rate of 98%, significantly higher than email which is typically around 20-30%. SMS messaging is immediate. Approximately 90% of the time, the text captures attention within about three minutes of receiving the text. Insurance providers will find that SMS messaging is an incredibly effective communication method for clients. Millennials and Gen Z grew up with that convenience right at their fingertips, so text messages feel natural and unobtrusive to them.
Millennials and Gen Z, accustomed to a continuous stream of information and interaction, tend to appreciate straightforward communication. If brands reach out to them through text, they expect those messages to convey urgency and authenticity, or they will be ignored as spam. A well-crafted SMS message from an insurance provider can resonate well with Millennials and Gen Z when they provide personalized offers or serve as a gentle reminder for policy renewals. SMS messaging allows for direct, one-on-one communication with potential clients. Unlike generic or impersonal emails that can be dismissed without opening, text messages are considered intimate and personalized.
Not only is SMS better for interacting with Millennials and Gen Z on a personal level, but messages can be versatile and interactive. SMS messaging can include links to videos, infographics, or personalized landing pages that explain complex insurance products in simple terms. Millennials and Gen Z prefer when insurance providers are concise and utilize multimedia content. In addition, SMS can be used to conduct surveys, provide immediate customer service, and even facilitate the claims process. SMS messaging can provide a seamless and interactive experience through a preferred means of communication.
Finally, compared to traditional marketing channels like direct mail or phone calls, SMS messages are relatively inexpensive. This cost-effectiveness makes it an ideal choice for insurance providers looking to maximize their marketing budgets while reaching a broad audience. SMS campaigns are easily scaled up or down depending on the response rates and engagement levels. SMS marketing offers a flexible and adaptive approach to marketing.
With all the benefits of SMS messaging laid out and supported by research, it might be easy to ignore the usefulness of other methods of communication. Emails, however, still play an important role in engaging Millennials and Gen Z. Emails convey a formality that should not be overlooked as a means of communication. They are particularly effective for delivering detailed information about policies, coverage options, and terms and conditions. Messages that cannot be condensed into short texts make the best content for emails, for example, newsletters and policy updates. Emails risk being deleted or ignored completely, so the key is personalization and relevance. Targeted, value-driven emails that resonate with Millennials and Gen Z stand a better chance of being read and acted upon.
Studies have shown that younger consumers are unlikely to answer calls from unknown numbers, let alone engage with direct mail pieces that often go straight into recycling bins. Rather than waste more paper, insurance providers need to see the shift in perspective of Millennials and Gen Z. Phone calls and direct mail are intrusive and outdated in their eyes. Millennials and Gen Z have grown up adapting to more convenient means of communication and have come to rely on digital methods. Insurance providers who continue to rely heavily on phone calls and direct mail may find themselves struggling to connect with the new generation of consumers.
It is vital to obtain explicit consent from potential clients before sending them SMS messages. This is the first step toward utilizing SMS messaging as a means of communication with consumers. Insurance providers must respect the Telephone Consumer Protection Act (TCPA). Additionally, obtaining consent is also an important step in fostering trust and goodwill. It gives clients the ability to maintain power in the relationship by opting in to receive communication from their insurance provider.
As mentioned before, Millennials and Gen Z appreciate concise and straightforward messages. It is important to consider that SMS messages often have a 160-character limit. Avoid using jargon or overly complex language that might confuse the recipient. Audiences, no matter their age, respect well-written, straightforward, and clear messages. Respecting a character limit like the one in SMS messaging enforces this clarity in texts.
As an insurance provider, you want to work closely with your clients, establishing a strong, trusting relationship. The key to this is personalized messages. Using means that your Millennial and Gen Z clients will prefer is the first step in personalizing your communication, but going beyond means tailoring message content to their specific needs or interests. Personalized messages are more likely to be opened and engaged with than generic ones.
Additionally, ensuring your clients engage with the content means including a clear call to action. This could be as simple as encouraging customers to click a link, call a number, or visit a website. SMS messaging is convenient and straightforward, but it is also important to establish a clear purpose for sending the text.
Another effective practice for maximizing the impact of your text messages is considering the timing of messages. Sending messages during typical work or school hours might not yield the best results. Instead, aim for times when recipients are more likely to be on their phones, such as early evenings or during the early morning.
Finally, like all marketing campaigns and sales efforts, monitor the performance of text messages. Use analytics to track the open, response, and conversion rates to determine what is working and what is not. This data can be used to refine your approach and improve future marketing efforts.
The rise of a new generation of consumers means all industries will need to adapt. Change is gradual, of course, and none of the traditional means of communication with clients will die out overnight. Emails, phone calls, and direct mail are still likely to be used for a while yet. However, insurance companies must be aware of the shift taking place in the consumer market. With their preference for digital communication, immediacy, and personalization, these younger consumers are best reached through SMS messaging. High open and response rates, along with versatility and cost-effectiveness can effectively engage and convert digital natives into loyal customers. Adapting to the preferences of Millennials and Gen Z is a necessity and will help to establish a strong, happy, and loyal customer base now and in the future.
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