How to cross-sell add-on insurance to boost e-commerce revenues

Are you thinking of increasing revenues by cross-selling add-on insurance through your e-commerce website? Avoid landing in hot water by following these 8 Do’s & Don’ts
If you operate an e-commerce website, cross-selling add-on insurance gives you the opportunity to tap into your existing customer base and achieve double-digit revenue growth; without having to spend additional funds on marketing.

After all, retaining existing customers and increasing their lifetime value is cheaper and more effective than attracting new business.

Cross-selling add-on insurance products, however, is not straightforward. This is a highly regulated industry with complex selling processes and consumer protection is paramount.

But if you’re still interested, read on.

In this post, we explore the top 8 Do’s and Don’ts so you can take advantage of this revenue opportunity, without ending up in regulatory hot water.
 

What exactly is add-on insurance?

 
First things first … a general add-on insurance is an insurance cover sold alongside goods or services such as a smartphone, car, holiday, or another insurance policy.
 
Insurance add-ons come in two types:

1. The first is an add-on insurance sold alongside or together with another – unrelated – item such as a smartphone, car tyres or holiday, by a retailer. The customer did not set out with the intention to buy insurance, but decided to purchase a policy cover alongside the primary product or service at the point of sale.

2. The second type refers to optional covers that a person buys on top of the stand-alone insurance product. An example would be Gap Insurance when buying a car insurance policy.

Whilst the two types of add-on insurance have much in common, for the purpose of this post, we will focus on the first type.

Now, for our top Do’s when cross-selling add-on insurance.
 

Do #1: DO Implement reliable data analytics

 
Just as with any other user journeys within your e-commerce website, ensure you are collecting reliable data and measuring the right KPIs. We suggest keeping an eye on the following as a minimum:
 
  • Number of times an insurance product is proposed at checkout. (You can collect this data by measuring the number of times a specific API is called).
  • Number of times a purchase is made. (You can either measure the number of times a specific API is called, or the insurer can share this data with you). 
  • Conversion rate. (Easy to calculate if you have the above data). 
  • Segment by audience type (use the Audience Segments in Google Analytics or something similar), by product category and by product type, eg smartphones vs tablets, or iPhone vs Samsung, and group by frequency of visits, user type etc. 
  • Traffic to “More Info” pages such as the policy’s Terms and Conditions. (Many times this indicates there is not enough information within the main pages. See Do #4 below).


If possible, use heatmaps and other types of analytics to visualise and improve user experience and flows.

On a regular basis, share the aggregated data with your insurance partner so together you can optimise the customer experience and conversion rates. It is likely that the insurance company has experience in selling insurance online with other retailers and through their own website. They have seen it before so they should be able to extract actionable insights from the data you provide to them.

A good insurance partner will also provide you with technical tracking. These KPIs answer questions such as:

  • Is the API connection reliable?
  • Is it slowing down the checkout process through slow response times?
  • Is the API secure? For example, am I, unknowingly, sharing access credentials or credit card data
 
The above data can go a long way to help both you, the retailer, and the insurer, build products that are more suited to the needs and context of your specific audience.

Do #2: DO Use a recommendation engine

 
Amazon and Netflix pretty much nail this technique. At the most basic level, using non-personal historical statistics already available, you can recommend the right insurance policy based on what similar customers have bought. For example, “Customers who bought an iPhone 8 also bought Gadget Insurance.”
 
Customers who buy the more expensive model of a product, might be willing to shell out for a more comprehensive cover, compared to others who bought a less expensive model.
 
You know your customers best; so you are ideally positioned (with the help of your insurance partner) to recommend the right insurance cover at the right time to the right person.
 

Do #3: DO Identify the right time to cross-sell

 
The checkout screen (right before proceeding to payment) is, arguably, the best place to propose the add-on insurance cover. With just one click (see Don’t #2 below), the customer can add the cover to their shopping basket and buy both in one easy step. There is no need for additional friction in the checkout process.
 
Other areas of the online retail store, such as the specific product page, are a good place where you can talk about the additional value gained by buying an insurance cover specifically tailored for the product the customer is looking at.
 
 

Offer an insurance cover specifically tailored for the product you are selling

The FAQ section is well suited to answer the most common queries without the user leaving your site. Here, again, your insurance partner can help by recommending what are the most common questions customers tend to have before purchasing a policy.

Do #4: DO Provide easy access to policy details

 
No one has the time to read multiple pages of policy conditions. This does not mean, however, that such information should not be provided. It means that it’s on us to make the policy details easy to read.
 
So provide access to the full policy terms at various points along the journey. At the same time, create a number of key points (or FAQs) to highlight the most important clauses of the policy, especially what is covered and what is not.
 
Just as important as it is to get certain things right, it is also crucial to not engage in bad practices
 

Don’t #1: DON’T Compromise on your macro conversions

 
Yes, you want to increase your revenue. But not at the cost of losing sight of the primary objectives. At PSA Insurance Solutions, for example, our marketing and technical team, work with our e-commerce partners to ensure that add-on insurance is integrated within the check-out process in a seamless manner for the user.
 
With the right technology in place, adding insurance to the checkout process does not disrupt in any way your goal of selling your main products; if anything, it enhances your proposition by adding more value.
 
 

Don’t #2: DON’T Engage in opt-out selling

 
We have all experienced it before as users. The checkbox is ‘conveniently’ pre-selected, and unless we untick it, we end up buying a product we never intended to in the first place. Some retailers do this in the hope that buyers will purchase the insurance without noticing.
 
At PSA Insurance Solutions, our approach is simple. Not only we do not permit this behaviour; our technology is built in a way to ensure that this is simply not possible.
 
We need to make certain the customer actively elects to purchase the add-on insurance cover and is making an informed decision. This includes providing access to policy details and full price disclosure.
 

Don’t #3: DON’T Obscure the price of the policy

 
This tactic is sometimes used by certain retailers for the same reason opt-out selling is used. It is hoped the users do not notice that they are buying a cover they never intended to.
 
Full price disclosure is not only a must from a regulatory perspective but also best practice when considering the value of long-term relationships with your customers.
 
Make it clear to the customer how much they are paying for the add-on insurance cover, who the insurer is and what is included (or not) in the insurance product they are about to buy.
 

Don’t #4: DON’T Cross-sell a cover unless a customer is eligible

 
Either due to personal circumstances or the insurance product’s eligibility criteria, a customer might not be eligible for that policy.
 
Your insurance partner is primarily responsible to communicate the eligibility criteria to you so you can make them clear on the website. A good technology solution will automatically detect whether or not a customer or retail product are eligible for a specific add-insurance cover. This reduces the possibility of mis-selling down to almost zero. It also avoids having to add fields to the purchasing funnel, thereby keeping the checkout experience friction-less. .
 
Add-on insurance has several benefits when complimenting an e-commerce site. But as you saw from the above, it’s easy to fall into a trap when the process is not properly thought-out and implemented.
 
So make sure to follow these top Do’s and Don’ts whilst building a stronger online presence.
 
Good Luck!
 
 
 

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Recommended Reading
Ecommerce stores are embracing Insurance APIs. Here’s why. 26 February 2020
Increase e-commerce revenue with add-on insurance 09 July 2019
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PSA Insurance Solutions Ltd Reg No: C83206 is a limited liability company under Maltese Law, having its registered address at: MIB building 53 Abate Rigord Street Ta’ Xbiex Malta, Tel + 356 22 58 34 92. The company is enrolled to act as an insurance agent in terms of the Insurance Intermediaries Act, 2006 by the Malta Financial Services Authority (MFSA), Notabile Road, Attard BKR 3000, Malta.