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Fostering Customer Loyalty in the Insurance Industry

Advances in digital technologies, along with significant shifts in consumer behavior, are opening up new opportunities for insurers to enhance their market segmentation, product and service offerings, and distribution models. In an age when demand for insurance remains stagnant, and consumers are increasingly dictating how their providers should meet their needs, these advances also create the opportunity for insurance carriers to enhance their relevance and value by engaging more frequently with more personalized services.

Loyal customers have a huge economic impact. They have positive experiences with insurance companies and subsequently cost less to serve, buy more insurance products (cross-selling opportunities), and remain in the relationship longer. In fact, these promoters have a lifetime value that’s nearly seven times higher than those of detractors, people who have negative feelings toward their insurers. Currently, however, only a handful of providers are really doing an outstanding job.

What makes clients loyal to you and your company?

New research sheds light on how customer segments perceive their P&C and life carriers, what customers want from their carriers and how different distribution and interaction channels influence loyalty. According to Bain & Company’s 2016 Customer Behavior and Loyalty in Insurance, the customer journey that provides superior results is characterized by four elements:

  • Pick your battles. Concentrate on specific customer segments, understand their needs, and fulfill any promises you make.
  • Selectively invest into moments of truth. The most important moment of truth is when a customer is reporting a claim. Whether a scripted call center agent takes the claim or someone highly informed and helpful is allocated to assist over the phone, makes a big difference.
  • Insurers have more to offer their customers than a commoditized service. In P&C insurance, acquisition of a customer is highly driven by price and retention is driven by product differentiation and service. The most successful companies are highly concentrated on price + service.
  • Consumers place importance on personalized services that help them manage the risks they face (e.g. personalized advice on reducing the risk of loss or injury and becoming and staying healthier). Successful providers are embracing the transformation from a traditional business to an electronic business model (incorporating digital with physical). Customers want multi-channel access and the freedom to choose.

 

Determine Your Net Promoter Score with One Simple Question

The most efficient way to foster loyalty, or retention, is to meet or exceed customer expectations. To determine whether you’re fostering customer loyalty, find out how your customers talk about you. Look at your customer base; are they unenthusiastic and vulnerable Passive customers, unhappy and potentially brand-damaging Detractors, or happy and loyal Promoters who continue to purchase and help grow your business with referrals?6.22 Blog Image

The best way to get feedback is to ask for it. SoGoSurvey offers a ready-to-use Net Promoter Score (NPS) survey that can be deployed within minutes on your website or inserted anywhere in your brand loyalty or customer experience survey. Proactively reach out to clients before it’s time to renew. The bottom line is to implement systems that will enable you to communicate regularly with clients in meaningful ways.