Discover 4 principles of customer engagement

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Insurance is traditionally a low-touch industry, where insurers have typically been focussed on customer acquisition and then policy renewal. Conventional wisdom recommends minimal interaction between these key points – but, are insurers missing a trick?

 

The balancing act of engagement in insurance | Creating Engagement | Collinson

In an age where customers not only want, but expect, brands to engage with them in a personal and meaningful manner, should insurers be taking a more proactive role in building engagement and reaching their customers on a more emotional level?

There are a variety of ways in which insurers can do this during the life of the policy. Whether that be through providing relevant and timely content related to their customers policy or lifecycle, for example travel tips and weather updates for upcoming holidays, or by communicating their added value benefits and services. These add-on benefits provide the insurer with more opportunities to have positive interactions with their customers outside of policy renewal. 

Unfortunately, there is no hard and fast rule for determining the frequency in which you should communicate with your customers. Simply, you want to deliver the right message to the right person at the right time with the right frequency. You can let the customer tell you what they want – by giving them the choice to set preferences around frequency and the content they want to subscribe to. That way the customer knows you’re going to tailor the experience to their needs.

Finding the ‘right’ balance of engagement runs a fine line. Insurers need to communicate at the time of renewal, but they should also be looking at other opportunities to engage throughout the year. This will help to build a more active and positive relationship so when renewal time comes the customer feels they have received true value from the relationship and won’t be adverse to renew.

 

The value of engaged customers

Engaged customers are often described as your ‘best’ customers – but this can be quite ambiguous.

Engagement is a personal and emotional connection between a consumer and a brand that is based on the culmination of ongoing interactions and experiences which simultaneously deliver on customers’ needs and generates greater profitability for a brand.

Gallup research shows that a fully-engaged customer represents a 23% premium in terms of share of wallet, profitability, and revenue over the average customer[1]

Research also shows that engaged customers are 4x more likely to say they “appreciate when {a} brand reaches out to me”[2]  highlighting the fact that these customers welcome, and respond positively to, communications and interactions from a brand.

Members of a successful insurance loyalty engagement programme that Collinson launched saw a positive response in their first year with 22 meaningful engagements – such as sharing content - per member. With such high levels of engagement, the insurance provider was able to build rapport and deeper relationships with their customers and provide personalised communications and recommendations.  

When insurers are successful in enhancing customer engagement, they can reap the rewards of a reduction in price sensitivity, improved renewal rates, and an increase in LTV to lifetime value (LTV) through cross-selling and up-selling opportunities.

The value of engagement is clear – it goes straight to the bottom line.

Some key principles and methods to consider:

  1. Know your customer beyond just their interaction with you – listen, learn and deliver

    Leveraging internal and third-party data to build a holistic view of a policy holder will enhance your customer engagement. By better understanding your customer’s behaviour, their wants and needs, and aligning these to your brand, you can deliver individual messages which are relevant and timely. For example, you can use event-based marketing that is triggered by a life event, such as offering additional automotive insurance to a family when their child reaches legal driving age.

  2. Journey mapping

    The customer journey in insurance is often complex. While the journey will be unique for each individual policy holder, there is true value in these mapping exercises. Findings can uncover inefficiencies, and insights can be used to improve systems and processes to deliver an enhanced, and more personalised, customer service at the individual level. For example, when consumers shop for their auto insurance policies, it’s common to shop for quotes via price comparison websites, click through to the insurers own site, then perhaps switch to a call centre to complete their purchase. Understanding and delivering the right information and reassurance the customer is seeking at each interaction can make the experience more seamless and more rewarding.

    By better anticipating customers’ needs at every stage in their journey, and going beyond the pay and claim mentality, insurers can start to build deeper emotional engagement with their customers. 

    Insurers should invest in delighting, not simply satisfying, their customers at key moments of truth. Richard Coleman, European Director at Collinson, discussed this recently in our ‘Winning customer experiences’ report; ‘From our experience working with our clients, we would suggest focusing on joining the dots of an experience to create a differentiated and relevant ecosystem of products and services which directly enhance the overall experience for the end customer. This not only increases overal engagement but as a direct output also influences their level of spend and loyalty to a partner’s brand."

  3. Identifying opportunities and taking action

    A strategic commitment to customer engagement will pay multiple dividends. The key to determining how and when to engage with customers comes down to understanding the individual needs as well as their current and historical relationship they hold with your organisation, then building a tailored strategy to address these opportunities to engage.

    It could be a detailed communications plan where you deliver the right message, at the right time, adhering to the customer’s preferred channel(s) of communication. The frequency of comms can be tailored to the customer’s engagement level and any actions taken.

    RSA Insurance Group, based in the UAE, were the first insurance company to offer an added value proposition in their market. They use trigger-based comms aligned to a member’s life stage, sent at specific times. The daily data feed from RSA enables processes to be set up to broadcast emails based on specific rules with each trigger developed in line with specific objectives such as delivery of information, cross/upsell and reactivation.

    Many insurers are now going beyond this typical comms approach to incorporate loyalty, or even experience-based, programmes to connect with their policy holders on a more emotional level.

    Over the past few years health and life insurance provider, Vitality, has been winning new customers and boosting sales by incentivising members to lead healthier lives and rewarding them for getting active. Their programme means that customers can benefit without having to claim, and the more Vitality points one earns, the higher the status, the bigger the rewards.

    FWD, an insurer based in Asia, wanted to change the way people felt about insurance. Collinson worked with them to design and launch FWD MAX, an interactive, social, points-based programme which rewarded members for engaging with their content. Members redeem their MAX points for meaningful rewards such as music events, cooking classes, and sports activities based on their own passions in life. 

    Vitality, FWD MAX, and others in the industry, have demonstrated that it is possible to add an emotional layer to a very functional category.

  4. Measurement

    Customer engagement is a very worthy goal for insurers and can be tracked, measured, and targeted for improvement at a granular and detailed level for all customers. Of particular interest is the level of meaningful engagements produced by customer. Whatever the approach, it’s essential to set up your KPIs at the start, but then measure, track and optimise as you go. This lets you know which customers to focus your efforts on and how to adjust your efforts.

    There are several metrics you can keep an eye on to maintain and optimise the health of your brand’s customer engagement. This will differ depending on your brand, but in your consideration set could be NPS, renewal rates, LTV, and typical comms metrics like open rates and CTR. Whichever you decide to measure and track, what could be the most interesting is comparing engagement results between those policy holders who have claimed vs. those who haven’t.

 

For most customers, insurance companies all look the same. If utilised effectively, customer engagement has the potential to bring in substantial business gains for insurance companies and help to differentiate in a challenging marketplace. By placing the customer at the heart of your planning, your brand can deepen and broaden your relationships. 

References:

  1. https://www.gallup.com/services/169331/customer-engagement.aspx
  2. https://scottgould.me/engagement-statistics/

 


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