Giving customers A warm welcome Profitable relationships start with A welcome [date]

1/3 63% 3 of 4 The insurance market Key headlines Customers say emails don’t contain information that’s relevant to them2 Customers switch within less than 12 months1 3 out of 4 don’t trust their insurer3 The UK is the 3rd largest insurance and long term savings industry in the world and the largest in the EU. 84% of consumers own at least one insurance product. Switching is rife and more prevalent than ever before. Email isn’t hitting the mark, with 63% of customers saying emails don’t contain relevant information. And insurance has really poor levels of trust amongst consumers. With many saying they wouldn’t trust their insurer to pay out if they needed to claim. Against all this mail has been declining. Source: 1 Mintel, December, 2015 (average across commoditised Insurance products.). 2 DMA, 2015 . 3 Accenture.

32% £13m 37% Using mail in insurance Mail usage in insurance is second only to TV 32% The top 20 average spend on mail £13m 75 out of 201 advertisers in General Insurance use mail 37% There are currently 201 listed advertisers in the GI sector. Over the last 5 years 191 used mail but only 75 used mail in 2015, 37% of the sector. Interesting then that mail volumes over this period have been falling. Source: Royal Mail MarketReach, Print Catalogues in a Digital Age, Illuminas, 2013.

3 out of 4 consumers say they don’t trust their insurer Switching is high Across all INSURANCE TYPES 34% All Insurance 43% Motor 29% Home Insurance1 3 out of 4 consumers say they don’t trust their insurer Retention rates aren’t great are they? Switching obviously increased with the aggregator presence. And insurance price hikes haven’t helped, especially in the motor insurance segment – where prices have been rising by as much as 13.5% ahead of tax increases. Even in home insurance where 86% of consumers hold a joint home and contents policy 35% looked around for a better deal but decided to stay. 29% still switched and this in an area where the prices are a lot more predicatable! Therefore the trust element seems really key. Surely if you trust your insurer you’re more likely to stay with them? How might a welcome communication help to build that trust? Source: Lightespeed GMI/ Mintel, 2015.

A good welcome Serves many goals Starts to build loyalty Provides reassurance Something tangible to keep EMOTIONAL Reminder who to renew with File it in a safe place PRACTICAL Mail has the unique ability to address a host of consumer needs in one simple communicaiton. From a practical level people have a routine, they’ll often file important household information in the same place. With car insurance many of us keep it in the glove compartment, should we need to call on it. Mail, particularly business mail like this, stays in the home for up to 45 days. It won’t just be looked at once but probably visited again and again. And mail is uniquely tangible, you can hold it, renew it and check that your policy details are all right. Whicch all means it helps to build trust, provide reassurance, builds loyalty and helps to keep your brand front of mind. All emotional benefits which link directly to coimmercial benefits in the longer term. Keep it in a habitual place Keeps it front of mind Helps to build trust

57% 58% Mail creates a lasting Impression from the start Valued mail makes people feel more valued Prefer a welcome pack by post rather than email When people receive mail they feel more valued. Consumers tell us that emails are easy to ignore. If 52% of emails are deleted in 2 seconds it’s easy to see how a welcome email could be overlooked and it almost certainly won’t have the same impact as mail. And finally customers who receive mail and more likely to buy from a company after receiving mail. Mail drives all sorts of commercial actions in a way other channels don’t. 58% More people would consider buying after receiving mail Source: Royal Mail MarketReach, Valued Mail, Quadrangle, 2014.

MAIL THAT MAKES PEOPLE FEEL MAKES THEM DO SOMETHING of respondents said their valued mail made them feel something of those who felt something, did something of commercial value In our study of valued mail In we explored the relationship between what recipients said valued mail told them, what it made them think and feel and ultimately what they did. What became clear is that people who recorded feeling something were more likely to act than those who did not. This correlation is quite clear: mail that makes you feel something makes you do something. And conversely, those who felt nothing – a total of 8% of our sample – were much less likely to do anything. Note to media specialists: Unusually 2 of our key statistics were 92%: - 92% of people said their valued mail made them feel something - 92% of those who felt something did something Source: Royal Mail MarketReach, Valued Mail, Quadrangle, 2014.

The fact that mail touches people with such a high emotional intensity is important when you want to build trust. Mail is a really vital way of building long term trust with consumers. And the brands they trust they’ll come back to again and again. Source: Royal Mail MarketReach, Neuro-Insight, 2013.

TOUCH CREATES A POWERFUL EMOTIONAL RESPONSE When people can both see and touch something, they value it 24% more highly than if they can only see it. Over a third of people say that the physical properties of mail influence how they feel about the sender.    +22% +24% Touch is an important part of that emotional response. Behavioural marketing experts have investigated the importance of touch in human psychology. Multisensory stimulation seems to alter the way the brain processes messages – often making processing quicker. Physical contact results in what psychologists call the ‘endowment effect’ – a sense of ownership over an item which makes people value it more highly. Scientific experiments have shown that people value something they can see and touch 24% more highly than something they can only see. Meaning that the physical nature of mail gives it a sense of importance as well as influencing how they feel about the sender. How important is that in a market typified by switching… Source: Peck, Joann, and Suzanne B. Shu. The Effect of Mere Touch on Perceived Ownership. Journal of Consumer Research, 2009

Ultimately you should add mail Because it makes you money Campaigns that included mail were: 27% more likely to deliver top-ranking sales performance 40% more likely to deliver top-ranking acquisition levels And from an extensive study by Media expert Peter Field when he studied all the campaigns that were submitted to the IPA Marketing Effectiveness awards was that campaign which included mail performed btter in terms of return on investment. Again all important factors in a business where of course all of your marketing spend is crucial and any wastage would be scrutinised. Source: Royal Mail MarketReach, IPA Databank Meta-Analysis, Peter Field, 2013

2.9x 3.4x WITH MAIL IN THE MIX, MARKET SHARE GREW 3 TIMES MORE EFFICIENTLY Mail included in multi-channel campaigns drove market share growth with 3x efficiency versus non-mail advertisers 2.9x Market share growth for all clients using mail 3.4x Market share growth for service sector using mail Furthermore the results of this analysis showed that where mail was included it drove market share growth with 3 x the efficiency of those that did not include mail. A brand spending the same amount of money on two campaigns, would therefore experience three times the amount of market share growth from one that included mail than one that did not. Source: Royal Mail MarketReach, IPA Databank Meta-Analysis, Peter Field, 2013

CLOSE BROTHERS WELCOME REDUCES THE COST TO SERVE

THE RIGHT SOLUTION FOR CUSTOMERS THE RIGHT WELCOME THE RIGHT SOLUTION FOR CUSTOMERS Backgound: Close Brothers underwrite products for many leading brokers, they have a direct relationship with over 2m consumers. To ensure customers are covered Close Brothers sends a welcome pack and they require the customer to sign and date the agreement and return it to them. Their welcome pack however wasn’t clear and they were receiving over 1m calls to their call centre every year as customers did not fully understand their policy details. Solution: Close Brothers changed their welcome pack to ensure that it included the name of the broker the product was purchased through. Simple step by step instructions were set out, guiding the customer on what they needed to do next. Results: With a small investment in artwork and copy of just £10k the savings so far (a month into the campaign) are running at £425k from an 8% reduction in calls to the call centre. There has been a four-fold reduction in the levels of administration Close Brothers are doing due to the higher consumer compliance to sign their agreements and understand their policy details.

Welcome customers with helpful Tools to get through winter Background: Rarely are customers rewarded for their loyalty so the relationship between customer and insurer can be fickle. So MORE TH>N wanted to do more and strengthen the relationship with their renewing customers. Solution: MORE TH>N proved it understood its customers’ needs by mailing a welcome and subsequent collection of motoring related gifts, relevantly timed, to get them through winder.. A branded ice-scraper, demister cloth and a credit card sized torch, with the message: ‘The British winter – we’ve got it covered.’ Results: The campaign’s effectiveness was measured through retention levels at renewal. Source: Royal Mail MarketReach, More Th>n, Winter 2009/2010

MAIL INNOVATION: NRMA SENT A TRACKING DEVICE TO MAKE SURE THEY DIDN’T LOSE CUSTOMERS Background: NRMA Insurance Australia wanted to welcome new customers and reassure them that they’d made the right decision in taking out an NRMA policy. Solution: Insurance companies help people protect the big things in life: cars, houses, boats etc. But more often than not, it's the little things that go missing. And they can be extremely difficult to track down. So, NRMA Insurance mailed new customers a TrackR – once it was attached to a wallet, keys or even a pet the owner could log on to an app to locate it should it go missing. Sent in a cheerful blue envelope with a personal and welcoming message, this unexpected gift was certain to leave a warm glow. Results: The TrackR received an overwhelmingly positive response from customers – helping them track down things like purses, remote controls, even pet guinea pigs. And during the process, customers provided additional data that would enable more relevant and engaging future communications and so reasons to stay with NRMA. All headlines appear in uppercase and are always out of the blue text boxes, up to a maximum of 2 lines. Single headline master is available in the theme. Source: Direct New Ideas

ROYAL MAIL TESTING & INNOVATION SCHEME (TIS) TEST A NEW USE OF MAIL AND EARN 30% DISCOUNT Test and learn activity has reduced in recent years as budgets and time are tight ROYAL MAIL TESTING & INNOVATION SCHEME (TIS) This Testing incentive is designed to help you overcome the barriers to testing

HOW THE TIS WORKS THE DEAL WHO’S ELIGIBLE TEST IDEAS Discount from the Royal Mail price for customers testing new business mail or advertising mail applications THE DEAL 30% discount on business mail tests and 15% discount on advertising mail tests carried out over a period of 1 – 6 months 10% discount in months 6 – 12 for business mail tests that roll out Discounts paid in the form of postage credits WHO’S ELIGIBLE Anyone testing a new mail activity, and sending a minimum of 10,000 items in a test (limited to 10m items for business mail and 1m items for advertising mail tests) For postings sent directly with Royal Mail or an Access Operator TEST IDEAS New mail application e.g. welcome pack Re-design of letter layout Envelope changes e.g. Digital Stamp

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