Distribution & Marketing

Is Consumer-Directed Distribution Right For You?

New paths to client-connection

Research from LIMRA, presented here by Pat Leary, identifies emerging digital and omnichannel strategies. Visit limra.com

Organizations across all industries are exploring consumer-directed distribution methods. New LIMRA research shows that many companies are currently leveraging self-directed models to connect with consumers while others are developing new products for these channels.

While much of the focus has been on online strategies, organizations can take various approaches to market and sell their products. Consumer-directed distribution is part of overall digital and omnichannel strategies that many companies are embracing to drive profitable growth and provide clients a seamless customer experience.

LIMRA research finds that companies are leveraging several approaches in their consumer-directed strategies. Each approach has different benefits depending on the carrier’s strategy, resources, and positioning in the marketplace. Brand awareness, economics, and the degree of control over the customer experience are all considerations. LIMRA’s study indicates the direct-to-consumer method leads the way, followed by affinity direct, and third-party strategies.

Term, whole life, and accidental death and dismemberment (AD&D) are the products most commonly offered through consumer-directed models. Online and contact center approaches lead the way, followed by direct mail.

Deciding a Distribution Strategy

There are a number of questions to ask when deciding a distribution strategy and which approach—consumer-directed or otherwise—makes sense:

  • What is your target market? What is the best way to connect with those customers?
  • How does a consumer-directed approach align with your current distribution strategies?
  • How well does your company’s brand resonate with customers?
  • Will your product translate to a self-directed channel? Can consumers understand it and make an informed decision as to whether it is right for them?
  • What is the cost of client acquisition? What other distribution economics are in play?

Answers to these and other questions will help organizations decide if a consumer-directed strategy is right for them.