Three Ways Insurance Companies Can Engage with Customers Better
By engaging customers with individual messages that are relevant to their needs and situations, insurers can create a relationship that lasts.
When it comes to engaging with customers, insurers are at something of a disadvantage. Unlike retailers, insurance companies have traditionally been limited with their interactions with customers. This often takes the form of a renewal notice, a bill in the mail, or a direct mail solicitation. Many customers rarely think about their insurance provider until their latest statement arrives.
Impersonal relationships have a consequence – the average retention rate for most insurance companies has stubbornly hovered at about 80 percent. That means 20 percent of customers are ending their relationship with one carrier and moving on to another after just a year. According to E&Y, customers are willing to build long-term relationships with their providers. “However, insurers must improve the effectiveness of their communications, as well as recognize and reward the value of the relationships.” That’s what will reduce churn rate and build the loyalty that insurers need today.
But how can you build a sophisticated customer engagement engine? There are three important areas to consider:
1. Data Validation
Insurance companies have a lot of data. Customer demographics, addresses, business and family relationships, assets, financial status, and past and present relationships with the company are all recorded across different areas of the company. But, for most carriers, uniting all of that data into one singular view of the customer is still a vision for the future.
Data is going to build the foundation for your new customer engagement strategy. Finding data software that can perform data cleansing, validation, deduplication and normalization is critical to ensuring that your data can become a corporate asset, not just something stored in Excel spreadsheets across the company.
2. Analytical Tools
Once the data is cleansed, insurers need a way to glean actionable insights from all that information. That’s where analytics tools come into play. Once an insurer has enhanced and organized customer data, it’s time to implement a robust analytics program.
Customer analytics fall into two segments: group dynamics and individual behaviors. By analyzing group data, insurers can identify patterns and trends that can support product development, segmentation and campaigns. By analyzing individual customers, insurers can create a more personal relationship by identifying new opportunities, finding policyholders who are at risk of churning and personalizing communications.
3. Customer Communications
After applying analytics to cleansed data, insurers will be able to personalize customer communications in a new way. Rather than sending out blanket statements, they’ll be able to input data about the customer’s unique financial situation, demographics and status to personalize messages and make them much more useful and engaging.
If data is continually analyzed, insurance companies won’t just be able to customize messaging in the mail, they’ll be able to personalize web promotions, emails, phone calls and even social media messages. If an insurance rep and the carrier can get a holistic view of the customer, the chances of creating a more meaningful, positive experience helps to build a richer and deeper relationship going forward.
Relationships = Revenue
The ease of researching competing businesses online hasn’t done insurance companies any favors. It’s difficult to create a heartwarming bill statement and insurers are struggling to provide relevant messages to customers who traditionally hear from them just a few times a year.
But staying relevant and present is crucial to keeping customers engaged. By engaging customers with individual messages that are relevant to their needs and situations, insurers can create a relationship that lasts and guarantee more revenue in the future… and eventually less churn.
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