Facebook puts Privacy back on the Agenda

We have reviewed online practices for over 7 years and have always reserved some of our time and benchmark categories to the issue of privacy. This has always been a major concern and a clear barrier for companies looking to encourage online purchases and even down to the provision of a personal email address.

We even had enough demand and interest that we ran specific benchmarks focused entirely on online privacy. We would capture huge amount of data about opt-in, marketing and data sharing practices but over the years, consumers seem to have come to accept that doing business online is a necessity and resistance and concerns have reduced. Less people read the privacy policies and companies have learned that carefully phrased assurances at key data entry points satisfy many customers. Now, privacy is back on the agenda because of the practices of a single company, Facebook.

Facebook grew up serving college students who have a different view about privacy. As one well-educated, intelligent but under-25 year old colleague stated recently, “we have no expectation of privacy, we just want an audience”.

Facebook founder Mark Zuckerberg is credited with the following exchange, apparently in early 2004 by Business Insider. Facebook apparently has not disputed the authenticity of the transcript.

Zuck: Yeah so if you ever need info about anyone at Harvard

Zuck: Just ask.

Zuck: I have over 4,000 emails, pictures, addresses

[Redacted Friend’s Name]: What? How’d you manage that one?

Zuck: People just submitted it.

Zuck: I don’t know why.

Zuck: They “trust me”

Zuck: Dumb fucks

Zuckerberg’s views may have matured since that time but not changed radically, earlier this year arguing that privacy is no longer a “social norm.”

The latest storm revolves around a feature called “instant personalization,” This allows Facebook data, including your birthday and your friends, to be available to partners like Pandora and Microsoft Docs. All Facebook accounts are included and opting out is a complex, multi-step process.

So far, the service has been limited to three partners — and they have promised to “behave appropriately”. CNN recently documented an example with a 24-year-old who considers herself social-media savvy. She was especially concerned when her Facebook friends visiting the music site Pandora could see which bands she likes.

“I was like, that’s really creepy. I haven’t logged in. I didn’t give it permission. I didn’t do anything,” she said.

That’s a quote from a 24-year old, but a much different user has now adopted Facebook with the largest single group in the age range 35-54 and they do care about privacy.

Has Facebook gone too far? Can we expect a backlash or is Zuckerberg correct that privacy is no longer something we can take for granted.

Social Media and Insurance – Whats Happening?

Insurance Social Digest

Social media is, without question, an extraordinary development and a very fast-moving topic. Adoption and implementation within the insurance industry has been very broad and varied. Much of the usage can be written off as experimental and a ‘toe- in the water’ but some is strategic and are the beginnings of a competitive advantage. Not everyone has the time (or inclination) to keep up with the myriad of possibilities and find the diamond in the rough. So, we want to deliver a quarterly (or monthly) Insurance Social Media Digest capturing the very latest findings, trends and developments specifically affecting the insurance industry. But what should be included? How much should be on strategy and if so, what are the critical topics, compliance, Facebook recommendations, fan recruitment, risks, policies?  How much be on pure facts – who is doing what?

To kick-start the process, we have completed a first version. We are sharing this copy in part, to generate input and comments.  After all, why not use social media to guide us on the subject. You can receive a copy of the Digest by visiting our website – http://www.customerrespect.com/Services/Social-Media.html. We ask you for your email address, not least so we can deliver the PDF file. No other information is mandatory.

If you are a key social media contact at your company, we would especially love to hear from you. We did make contact with as many organizations as we could, but we do want to represent your organizations as accurately as possible. You can add a comment to this blog by selecting ‘Leave a comment’ below. The blog host does ask for an email address but that is never published. A name is mandatory but there is no validation. If you would prefer to send comments anonymously, you can email socialdigest@customerrespect.com.

I hope you find the report informative but I really hope you will engage to help develop something that you will find even more useful in the next version.

Is it time to LIKE insurance?

Many companies in the insurance industry struggle with the role of social media. While it is clearly here to stay, business value remains cloudy? Providing customers the ability to talk freely and publicly about products and services goes against the culture of the industry and seems to offer little benefit but substantial risk.

There is no question that social media has many downsides and for these reasons alone it is vital to participate. This defensive posture however does nothing to take advantage of social media. Do not expect miracles,  most companies have seen little or no return from social media to date and I doubt whether we will see more than a handful of marginal success stories this year. Social media does however have the potential to change the relationship between insurer and consumer as affects trust, something that is fragile in many cases. We should take with a ‘pinch of salt’ the view business practice will change dramatically but adjustments will happen.

One of the biggest potential ‘game changers’ comes with the Facebook “LIKE” button. This little button will become ubiquitous on the web as it expands from Facebook to a range of sites allowing consumers to express their preferences for others to see. Take a look on the Levi website to see it in action; even though many of your friends might not have expressed their jeans preferences, this might be more about the demographics of this blog. How does this play out for insurance? The ‘Like’ button represents one of the most sought after goals in the insurance business  – the “customer recommendation”.

We pour over statistics about web behavior, knowing that consumers still prefer to buy from the offline agent but one thing we know more anything is referral and recommendations are still king. So if a consumer visiting your Facebook page sees that 4 of their trusted friends “likes” you or your products, how important is that? Over the next year the “like” button will evolve but will become central to the personalization of the web.  Insurance companies will recruit fans with increasing sophistication and user recommendations will help bridge the trust gap. We can see the beginning with USAA and Nationwide trusting their customers to rate them and their products online and as we move to the next phase of retail insurance, do not wait too long to adopt the ‘like’ generation.

Twitter – Who, What, Why in the Insurance Industry

Twitter activity in the insurance industry has settled down from its heyday in the heat of last summer. It is now time to ask what role twitter can play? Are you really reaching customers through Twitter?

The uncertainty surrounding compliance has been a drag on the enthusiasm for many companies as the risks can outweigh potential benefits. For those companies that have already embraced Twitter, the excitement seems to be dropping. New FINRA guidelines have loosened the knot a little but as one industry executive recently said, “this might just be so we can hang ourselves”.

In this context, we examine recent Twitter activity as companies constantly review their positions.

Industry follower count continues to grow, and there are now over 42,000 followers for the major insurers, but the rate of growth has declined. Growth rate averages 10% per month, still impressive but against 30% last summer it look pedestrian. Much of follower growth can be attributed to initiatives from newly entering companies building up initial base counts. Of the top 20 insurance tweeters, by follower count, all bar one saw their growth rate decline. USAA is now growing its follower count by 3% per month, down from 6% last summer, State Farm is down from 12% to 7% and Allstate down from 10% to 5%.

To what do we attribute this slow-down?

First, there are a certain number of people, other than customers, that will follow insurance companies; these include social media watchers, bloggers, competitors, analysts, researchers. There is a school of thought that tweeters follow tweeters and there are very few real customers involved. There is some truth in that statement but there are too many followers for that to be completely true. But remember, pretty much every competitor will follow you. One interesting illustration to this point is that AXA have grown their follower base by a steady 6 per cent per month to a respectable 671. Not bad until you realize they have yet to send a single tweet. They beat out Ameriprise (290) and Genworth (249) as the most followed silent tweeters.

Another reason is the drop in twitter activity from the industry itself. The average number of tweets across the major companies has declined from 35 to 30 per month. This does not seem a huge drop but is masked by early stage enthusiasts building their base. Eight of the top ten, by follower count have decreased their tweet rate. Conversely, seven of the bottom 10 has increased their tweet rate. USAA with a follower count at over 8500 now send on average 19 tweets a month, down from 34 in summer 2009. Some of the decreased activity might be associated with the weather or at least the season, Restrictions imposed by compliance concerns has limited many insurers to non-product related activities. Nationwide twitter activity has plummeted but they focus on NASCAR events so we may see an uptick again as the season picks up. This could apply also to other companies where golf, tennis and baseball all receive good coverage. The top tweeter activity comes from State Farm, Progressive, Liberty Mutual, Allstate and Esurance, all of whom have products in auto insurance, a segment with fewer compliance concerns.

A further reason is lack of interesting news; Twitter users are notoriously fickle. This goes to the question as to why people tweet, why do people follow an insurance company in the first place. No offense to the industry but it is all rather dull. Twitter is time consuming and while I follow, avidly, everything insurance companies tweet, it is not my weekly highlight. There really is not very much that is entertaining, engaging, or exciting. After following insurers for 9 months, it is clear that the same information distributed; is it coincidence that the insurer that recruited the highest number of followers in the past 3 months was the Aflacduck who recently pronounced that

Spring is here! If you need me, I’ll be flying a kite and high-fiving blooming flowers.

So what are the trends? Life and health insurers will remain conservative to avoid compliance concerns, they will prefer to promote philanthropic or sponsorship events, and maintain a steady growth in followers. We would not expect explosive growth. Scalability will be a limiting factor, as companies must/should review tweets in accordance with industry guidelines and risk management strategies.

Auto insurers, without many of the shackles of compliance, will adopt a more mainstream approach and look to engage customers and prospects. Twitter can become an alternative service channels and while volumes and caseload will be low, they will grow as companies examine business value. Customer engagement, measured by the Conversation Index, looks at the number of tweets delivered to a single person compared to broadcasting to all followers. To illustrate the different approach, Progressive has a conversation index of 78%, whereas USAA has 5%, many of which are sent to other USAA tweeters.

Key Findings

Leading Insurers by Follower count

USAA	8511
State Farm Insurance	5347
Aflacduck	5176
Allstate	3986
Progressive Insurance	3720

Leading Insurers by Average Monthly Tweet Activity (past 3 months)

State Farm	175
Progressive	149
Liberty Mutual	62
Allstate	55
Esurance	51

Leading Insurers for Customer Engagement (Conversation Index)

Progressive	77%
GEICO	58%
Esurance	48%
State Farm	41%
Amica	40%

Leading Insurers by average monthly follower growth over past 3 months

Aflacduck	368
Progressive	262
USAA	238
State Farm	228
Allstate	209

Leading Insurers by monthly percentage rate growth for followers (starting with more than 100 follower)

Chubb	25%
Westfield	20%
GEICO	20%
Amica	14%
Travelers	14%