How to ask millennials about (boring) insurance: Customer development hack
We’ve been talking about them so much, that by now millennials is probably the most exhausted topic on the Internet. Still doesn’t mean that we all (and by “we” I mean those who create products and services) know how to serve this generation. While millennials are getting more annual purchasing power, more businesses experience some kind of FOMO. We all want their attention. The FOMO grows when you see that some innovative companies have done really good job (take for instance Netflix and television, or Udemy and education), while others could not keep up. Insurance business is among the last ones. As a result, millennials are the most underinsured generation alive today. On the one hand they actually have less assets to protect (or they do not feel that attached to the stuff they own). On the other hand, we can assume that current insurance products are simply not solving the problems this generation has. So what do millennials actually think about insurance?
Millennials, insurance and Vigi
Vigi is a Dutch insurtech startup. At Vigi we build on-demand on-item insurance for millennials. With the Vigi app you can insure your important stuff whenever you want for as long as you want. You turn your insurance on and off with just one simple swipe and pay only for the days when you really use it.
Vigi is built based on the lean startup methodology and startup thinking approach. Meaning that we run a lot of tests and talk to our users regularly. Everyone in the team is part of this process (in the next posts I’ll share how we’ve implemented a feedback loop). We want to really understand our users in order to be able to help them better. So we’ve gained quite some knowledge about our (potential) customers. We’ve put it against the previous generation to strengthen the gap.
What was missing for us is an insight about the context in which millennials think of insurance. E.g. why they prefer taking risk to insuring? Do they act similarly in other situations?
Vigi’s winning customer development hack
I’ll describe our thinking process and the steps that we’ve taken. That is basically the approach that we usually follow with our tests, from assumptions to experiment design to analysis.
Step 1. Assumptions
We’ve started with putting some hypotheses for the future tests and filling in a test card. We assumed that:
- …attitude towards insurance exists in a broader life context. In other words, millennials do not think or act towards insurances as something special, it’s not a basic value like family or health. Our guess was that the behaviour towards insurance should correlate with some other behaviours.
- …millennials live in unpredictable world and accept risk as part of it. Life for the young generation is way less stable — they have less to spend, while having more debts, they have to change their jobs more frequently, they have to postpone marriage and own housing.
Step 2. Experiment design
We decided that we need some kind of a survey here, where we could ask our segment about insurance, pension, savings, life plans and all that (boring) stuff. Now can you imagine anyone filling in a survey like that without being seriously, very seriously incentivised? Me neither. And we had to gather relevant number of responses for the test. How? By being relevant (or faking it).
In 2013 the most visited story at the New York Times website was the quiz about regional variations of American English. It gained more views than any other story that year. The Buzzfeed’s quiz ‘Which City Should You Actually Live In?’ has accumulated in 2014 over 20.5 million views.
That was the perfect combination of social engagement and virality, hugely relevant for young audience. We’ve browsed through dozens of quizzes in order to learn about the style and tone-of-voice. As a result we came up with a quiz that would tell you to what extent you have your own life under control. The questions that we had initially were re-written in a relevant style and mixed with humorous and recognisable for millennials situations. In the end we had 27 statements with which users could agree or disagree. Then we’ve used Typeform to build our online quiz (in Dutch).
Step 3. Boost it!
To collect more responses we’ve boosted the post on the Vigi’s Facebook page. We put 30EUR into promotion. Within 3 days we’ve gained 400 clicks and 282 responses. That is a response rate of 70%!
Step 4. Analyse
Just the analysis of the most popular choices would already give us some insights. But since we were researching the context we needed to look deeper. So we decided to use Principal Component Analysis (PCA). In short, PCA allows you to uncover correlations between variables, group them, and describe the (theoretical) factor that explains them.
In our quiz users could choose all the statements that they agree with. Every time that they would choose the statement it would get 1 in our matrix, the statements that were not chosen would get 0.
To run PCA we used R. It could be as well done in SPSS, or other applications (you just need to remember the course of statistics from school, or ask your data analyst to press a couple of buttons).
Step 5. Interpret
From the analysis we’ve got four factors, each with variables (statements) with different loads. Based on the loads we decided which statement belongs to which factor. By looking at the content of the statements in each of the factors we could describe the context of risk taking in financial behaviour (and not only insurance), how millennials see the future, in which situations they think of insurance.
Some general learnings
There is of course nothing new about the fact that quizzes work for younger audience and social media. Still you need to put in some effort to really-really make it work. We’ve learned the following simple things:
- Make it easy to reply. Use Typeform or any other similar tool. Transform open questions into multiple choice (add Other if necessary). Consider that the big number of respondents will fill in your quiz on their phones.
- Give something in return. For our quiz we added 3 possible outcomes that respondents would get, based on their answers. We did not really care about those outcomes, but they were funny and would make our respondents smile. That was our way to thank them for spending their time.
- Make it shareable. Sharing should be easy and worthwhile. In our case, people were willing to share their results and challenge friends to fill in the quiz.
That’s it from Vigi for now. I’ll share some more of our learnings soon. Stay tuned! 🐝🐝🐝