Six Key Ways to Establish Brand Loyalty in Policyholders
Every insurance company puts considerable effort into attracting new customers. However, statistics indicate that it can cost between 5 and 7 times more to acquire a new customer than to retain an existing one. In addition, increasing customer retention by 5% can see a corresponding 25% increase in profit.[i] This dramatic profit leap can be attributed to the fact that customers, once loyal, will often purchase additional products from that company. Loyal customers will also be an excellent source of free advertising; many happy customers will share positive company reviews with friends (and, conversely, unhappy customers will share negative experiences). Therefore having a solid strategy for keeping policyholders loyal to your brand, is a lucrative business move for any insurance company.
What can we do to keep our policyholders loyal to us?
In a world of competitive pricing and enticing advertising, the relevant question is, “what can we do to keep our policyholders loyal to us?” Keeping policyholders happy is not perhaps as straightforward as it may first appear. While one might assume that simply offering a better price point than any competitors may be effective, in fact, acquiring customers in this way opens the company to the risk of the individual immediately moving on again when they find another company willing to shave a few more pounds of the price of the product. But there is good news; according to a report by customer strategists, Walker, the value customers place on their experience will be 50% by the year 2020; with 34% being placed on the product and a mere 16% based on the price.
[ii] This clearly indicates that, while competitive pricing is beneficial, customers are far more swayed by a positive customer experience.
How can this positive experience be achieved in practice?
Know your customer
Find out all that you can about your policyholder. Ensure that you are using their preferred name, and that you send out offers that are relevant to their age and situation. There are numerous companies and products that will assist with the gathering and safe storing of customer information, making it possible to send out offers on birthdays, track upcoming events that may require insurance, or be responsive to cultural issues or relevant religious celebrations. There is huge scope here; a customer with a child turning 17 could be sent offers for adding additional drivers to car insurance; customers who regularly take holidays abroad can receive details on annual holiday cover; customers with their own business can be offered reduced rates on business insurance. If a customer feels that they are known and understood by their insurance company, it will increase their satisfaction.
Ask your policyholders if they are happy
In addition to keeping detailed records, it can be beneficial to call or e-mail customers asking for feedback and reviews, in order to ensure that they are happy with the service they are receiving. Many customers that leave a company do so without first complaining – so proactively asking whether they are happy can get your company ahead of any potential problems.
Ensure a smooth Customer Service experience
[iii] More than four out of 5 dissatisfied customers could have been retained, with satisfactory early intervention! Ensure that it is possible to access customer services quickly and easily. Customer services staff must be trained in problem resolution and be polite and eloquent. Be willing to resolve problems.
Sell a second policy to increase retention
In many cases, once a policyholder has more than one policy with a company, their loyalty increases (perhaps partly due to a sense of convenience and a reluctance to research and change providers). Using the data that you have (see above; “Know Your Customer”) it should be possible to offer tailor made policies to suit their lifestyle – be it car insurance, home insurance, life insurance or business insurance. Many companies find that offering discounts on multiple policies can be a good way to convince customers to increase the number of policies that they hold.
Make your website accessible
Current trends show that more and more people like to independently make purchases online, as well as being able to solve any problems themselves. Therefore, companies would be prudent to ensure that the website experience is easy and convenient, with fast speeds, easy navigation, clear direction and the ability to purchase policies online, as well as being able to make changes.
Make any claims process smooth
While both the customer and the insurance company hope that claims will not need to be made, when a policyholder does need to make a claim, ensure that they have a smooth, impressive experience. This prompts them to stay loyal to the company, perhaps even purchasing further policies, as well as making customers more inclined to recommend your services.
These six strategies can help to increase a policyholder’s brand loyalty; increasing customer retention, saving money, creating more profits and potentially being a source of new custom as happy customers share their positive experience with family and friends.
[i] Fred Riechheld, F, 2017. Prescription for cutting costs. Bain and company, 1.
[ii] Walkerinfo.com. (2017). Customers 2020: The Future of B-to-B Customer Experience. [online] Available at: https://www.walkerinfo.com/customers2020/ [Accessed 9 Mar. 2017].
[iii] Accenture, 2013. Accenture 2013 Global Consumer Pulse Survey Global & U.S. Key Findings. 22.