If you see an insurance commercial on TV, there’s a good chance that the insurer will be touting a lower price than the competition. We’ve all heard the slogans about how much money you can save by switching car insurance providers. The same goes for life, property and other kinds of insurance. When it comes to purchasing a policy, customers think about price first and brand second… if at all.
Auto insurance is increasingly being sold as a commodity – something that is often differentiated by price alone. And when you’re only competing on price, customers aren’t loyal and retention rates (and profitability) suffers.
Today, customers are more empowered and likely to switch carriers. Social media has given them a megaphone to talk about bad experiences and Google offers them an instant way to research different policy options.
So how can insurance companies reduce churn and build lifelong relationships with customers? It starts with building the brand around customer engagement and service — not the product.
To build better relationships with policyholders, insurers first need to better understand them. Who are their customers? How do they want to purchase insurance? What communication channels do they use? And just as important, what kinds of messages resonate with them?
Social media has enabled customers to talk directly to insurers and they expect insurers to listen. Insurance companies don’t have to respond to every social message, but they do have to keep in mind that customer engagement requires customized communications that fit their lifestyles. And those communications have to be personalized, integrated with other channels and delivered accurately and reliably.
To build loyalty and trust, insurers first have to show customers that the company knows them and understands their needs. That means stop being reactive – and start becoming proactive with their communications. Rather than just sending out policies and bills, insurers should be looking at opportunities to engage with their customers – with relevant content and delivered with a frequency that matches their wants . Make sure ALL interactions a policyholder has are coordinated and managed – in real time.
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In today’s more competitive world, insurers need to make sure the customer is at the center of every interaction. Policy administration systems need to stop being just a system of record and transformed into a system of engagement. Claims needs to be more proactive in their dealings with customers, addressing their needs early in the process to help reduce loss and increase customer satisfaction. And Marketing needs to improve customer segmentation and deliver better targeted messaging. So eventually, the right offer can be made to the right customer at the right time through the right channel.
By thinking first about what the customer needs – not what the company offers – insurers can start to build real relationships with policyholders that last for years. Loyal policyholders present a more predictable source of revenue, word-of-mouth references and upsell opportunities. Not only that, loyalty and service is a much harder thing to compete on than price point and product.
Want to learn more about engaging customers and building relationships with lifelong policyholders? Watch our panel webcast, “How Insurers Are Building Next-Generation Customer Engagement Platforms.”