 "DND forces insurers to go online for sales lead")
With tele-callers providing sales leads to insurers out of the system owing to stringent telecom regulations, companies are now turning to other sources such as online lead generation. The bulk of tele-callers for the financial services industry including insurance left the segment due to the do-not-disturb (DND) rules by the Telecom Regulatory Authority of India (Trai).
Direct sales personnel who sell insurance directly as an employee of an insurance company, used to bring 50-60 per cent of direct sales, apart from online purchase of policies by customers themselves. Since leads provided to them by tele-callers came to a halt, it became tough for these employees to contact customers.
“Direct calling customers was one of the most cost-efficient methods of reaching out to customers. But even since Trai has regulated tele-calling and begun the DND list, it has been difficult to sell products due to absence of leads. But, we are relying heavily on the website where customers search for products,” said the chief marketing officer of a private life insurer.
The private insurance official quoted above added that since most websites allow customers to view product pricing and other details only if they enter their mobile number, it offers an opportunity to generate reliable leads. With the help of such need-based search leads, direct-selling employees contact the customers who viewed the product details.
Low tariffs and direct reach to consumers had made SMS and direct calling the most cost-effective ways of selling financial services and products. However, the concerns related to telemarketing and privacy invasion issues led to the telecom regulator taking firm steps to curtail unfair practices.
The number of telephone subscribers in India increased from 935.81 million at the end of April 2014 to 938.34 million at the end of May 2014, according to Trai data. From September 2011, Telecom Commercial Communication Customer Preference Regulations, 2010 was brought into force. This was to done to regulate unsolicited commercial calls and messages.
Under this, a DND registry was created for customers who did not wish to be called. Telemarketers also had to get themselves registered, making it difficult for insurance companies from contacting potential customers without prior permission.
Vighnesh Shahane, CEO and whole-time director of IDBI Federal Life Insurance, recently told Business Standard that norms related to DND registry led to the decline of direct business. However, he added they could feed leads to direct sales personnel through their website, work-site marketing or some form of tele-calling to make this a much more robust channel.
Direct selling channel for insurers includes sales done directly by the company employees, supported by leads which tele-callers would generate. This also includes sales done through the company website or through a web aggregator. Here, the premiums are cheaper because there is no agent commission to be paid.
Following Trai norms, the Insurance Regulatory and Development Authority (Irda) also tightened norms for distance marketing of insurance, making training requirements for tele-marketers.
Sanjay Tripathy, senior executive vice-president at HDFC Life, said that although direct selling through tele-calling has come down, permission-based direct sales are being done. He explained that they have an initiative wherein a customer wanting to buy a product or seeking information gives a missed call on a number. Later, a company representative calls the individual. This is done to ensure that customers are first asked for their permission before contacting them.
Direct sales personnel who sell insurance directly as an employee of an insurance company, used to bring 50-60 per cent of direct sales, apart from online purchase of policies by customers themselves. Since leads provided to them by tele-callers came to a halt, it became tough for these employees to contact customers.
“Direct calling customers was one of the most cost-efficient methods of reaching out to customers. But even since Trai has regulated tele-calling and begun the DND list, it has been difficult to sell products due to absence of leads. But, we are relying heavily on the website where customers search for products,” said the chief marketing officer of a private life insurer.
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Direct selling as a proportion of total individual business stood at 2.55 per cent in 2012-13, according to Irda’s Annual Report. This was higher than 1.9 per cent in 2011-12, especially because sales through the company websites went up. Private life insurers had 6.14 per cent (5.05 in 2011-12 ) of new business from direct selling, while the Life Insurance Corporation of India procured 0.82 per cent through this channel in FY13, compared to 0.02 per cent in the previous year.
The private insurance official quoted above added that since most websites allow customers to view product pricing and other details only if they enter their mobile number, it offers an opportunity to generate reliable leads. With the help of such need-based search leads, direct-selling employees contact the customers who viewed the product details.
Low tariffs and direct reach to consumers had made SMS and direct calling the most cost-effective ways of selling financial services and products. However, the concerns related to telemarketing and privacy invasion issues led to the telecom regulator taking firm steps to curtail unfair practices.
The number of telephone subscribers in India increased from 935.81 million at the end of April 2014 to 938.34 million at the end of May 2014, according to Trai data. From September 2011, Telecom Commercial Communication Customer Preference Regulations, 2010 was brought into force. This was to done to regulate unsolicited commercial calls and messages.
Under this, a DND registry was created for customers who did not wish to be called. Telemarketers also had to get themselves registered, making it difficult for insurance companies from contacting potential customers without prior permission.
Vighnesh Shahane, CEO and whole-time director of IDBI Federal Life Insurance, recently told Business Standard that norms related to DND registry led to the decline of direct business. However, he added they could feed leads to direct sales personnel through their website, work-site marketing or some form of tele-calling to make this a much more robust channel.
Direct selling channel for insurers includes sales done directly by the company employees, supported by leads which tele-callers would generate. This also includes sales done through the company website or through a web aggregator. Here, the premiums are cheaper because there is no agent commission to be paid.
Following Trai norms, the Insurance Regulatory and Development Authority (Irda) also tightened norms for distance marketing of insurance, making training requirements for tele-marketers.
Sanjay Tripathy, senior executive vice-president at HDFC Life, said that although direct selling through tele-calling has come down, permission-based direct sales are being done. He explained that they have an initiative wherein a customer wanting to buy a product or seeking information gives a missed call on a number. Later, a company representative calls the individual. This is done to ensure that customers are first asked for their permission before contacting them.