How do insurers get beyond retention rates as a benchmark of success?

Like it or not, Insurance traditionally has never been an attractive forum to talk about customer engagement and value journeys. The traditional metrics of customer satisfaction have always been retention rate, and if the retention rate of an insurer exceeds the competitive benchmark, it is generally used to lay the yardstick.

Question is – Is it good enough? Is it good enough to map customer engagement only through retention rate in today's digital marketing world? Consumers are seeing the thinning engagement margin of financial services and they want similar experiences whether transacting a retail banking account or buying an insurance product or shopping on e-commerce platforms. Consumers are getting more and more demanding, e-transaction focused, want everything through a “few clicks” and for the engagement engine to service them.

Below are few effective strategies to navigate through the digital insurance customer-engagement cycle. 


1.   Understand before you Engage

Customer engagement can’t start without understanding the needs of your customer. Hopefully you would agree that understanding is the key to customer loyalty. In the typical insurance world, traditional segmentation is inadequate for understanding the customer in detail, which would include demographics dimensions like age, income profile, employment and location.

To better understand the customer in today’s digital world, insurers should:

  • Map the customer journey through their lifecycle
  • Establish the connection or event when a customer abandons the services
  • Create a customer-centric services organization to map and deliver contextual services based on “specific demands” of consumers
  • Create a value-tree of his / her family, referrals, friends or any associated members so that the insurer can understand the experience in its totality and assess “overall demand”

To complete the customer understanding, be prepared to measure effectiveness before and after the sale.


2.   Create true consumer personas

As stated above, generic customer segmentation will yield generic results and outcomes, wherein the result-set can be generalized to a wider group of customers, rather than specific customer needs. Henceforth, creating value journeys or customer personas will be the norm. Good personas are a representation of good customers. A good persona accurately reflects your target customer’s age, location, goals, social behaviour, emotions, which will result in shaping better or contextualised products.

To create true and effective buyer personas:

  • Don’t assume that you know your target audience. The target audience needs to be mined, understood, patterned and then shaped according to the target segmentation which the insurer would prefer
  • Update personas frequently and see the results
  • Create the full journey map i.e. from the interest to the sales closure


3.   Apply Intelligence in Customer Engagement

Optimized or contextualised customer engagement is no longer just a thought but a reality in the digital engagement world. Using various tools, insurers can engage with the customer on a real-time basis and communicate with the customer more effectively.

To better understand your customers' motivations and buying habits, you can leverage a customer intelligence platform to quantify and analyze your customers' spending habits based on demographics, analytics, and data-mining. 

Relying on an organized and actionable collection of customer data (customer intelligence) is important for understanding the motivation of a particular group of customers and driving higher ROI from your marketing campaigns.

Internally, this customer data can be generated through customer interactions, whether online through browsing histories or in person at different touchpoints. Externally, data can be gathered from several different sources, falling into one of the following categories:

  • Personal demographics: age, income level, debt level, educational profile, marital status, etc.
  • Geographic demographics: rural areas, big cities, small towns, etc.
  • Attitudinal data: survey results, contact centers, reviews, etc.
  • Situational customer data: location, time of engagement, and device type.


4.   Market in the Digital World

Traditional methods of digital distribution may help but will not gain a lot of traction in today's consumer society. Enterprises should look at different elements of digital marketing to connect with digital / mobile / social consumers.

  • Video on-demand
  • Social media influencers
  • Social media stories, themes
  • Content marketing

The crux is to integrate marketing activities into the customer lifecycle. Given the way the complexity of marketing and digital marketing has increased, techniques like customer-journey mapping for different personas are increasing in importance to help define the most relevant communications and experiences for different touch-points in the customer journey.

Reach > Display, Search, PPC, SEO, Content Marketing

Engage > Campaign, Offers, Lead-Nurturing, Marketing automation

Convert > Remarketing, Personalization, CRO


5.   Measure success

There's nothing better than understanding if the hard work has paid off, which means measuring customer satisfaction levels. There are 3 different KPIs which need to be measured:

Net Promoter Score (NPS) – this is a measure of how many customers would recommend (promote) your brand to others. More customers promoting a product or service would mean a positive score. Customer referral schemes are a handy way to push the NPS score into the positive zone

Overall satisfaction Index – this can be a percentile-, points- or index-based rating measuring how overall satisfaction (either for offered products or services) stands compared to earlier periods. For example, if the satisfaction index has dropped 10% on claims efficiency, this would suggest that the claims administration process is not efficient and needs radical customer focus or transformation.

Brand Equity – this is also a handy measurement to understand how the overall brand has done compared to the competition or historically. Example, if the brand equity research (generally done by the third-party) shows that the score has increased from 78% to 85%, this would imply that more people are aware of the product or services being offered.


6.   Finish off with a survey

Customers are generally not best pleased when going through a “canned survey” – it’s boring, mundane and creates no value-add for their time. Key fundamentals of a great survey are:

  • Be crisp and ask specific questions, rather than throwing out a platter of questions
  • Don’t project or force someone's point of view
  • Use ready-made choices
  • Set it up to be completed in less than a minute
  • Send the overall survey results in due course – don’t just collect and forget to send the results

There are great tools available in the market to conduct surveys, whereby the survey can be initiated in matter of minutes and results can be auto-distributed to the participants. It is not a bad idea to throw some brownies (loyalty points) to customers investing their time during the survey.


The Next Step

The era of consumer engagement in insurance is well underway, and now is the time to seize this exciting growth opportunity. Winners will be those who best connect products and services with the needs of consumers and make the insurance-buying experience as natural and smooth as possible. How do you get there?