Companies that are able to provide great customer experience tend to be rewarded over the long term with higher rates of customer retention and increased brand loyalty. Most insurance companies are set up to acquire new customers, however, recent studies suggest that retaining customers has a greater impact on the bottom line.
According to the Database Marketing Institute, spending $1 to keep a customer increases profits more than spending $5 to acquire a new customer. This is further compounded by studies that report that the probability of selling goods to an existing customer is 60-70% while the probability of selling to a new customer is only 5-10%. So how does a carrier keep its customers happy?
Developing and implementing strategies that humanize the customer experience are key to having satisfied customers. There are several opportunities where carriers can interact with their customers outside of enrollment. Carriers should ask customers about their experience at key moments of customer interaction, such as important life events (e.g. having a baby or marriage), billing or claims issue resolution, or even when a customer has had a technical issue with the website. Each of these interactions can have a strong impact on whether or not a customer will decide to keep coverage or terminate it. According to an article written by Jay McLauchlin, SVP of Sales and Distribution of HealthPlan Services, the most successful retention programs will engage in a multi-touch, customer-focused process that provides a 360-degree view of the client and the business, from on-boarding to renewal. Proactive touch points can include on-boarding calls, mid-year checkpoints, contact change request follow ups, first claim calls, past due follow-up calls, term request calls renewal support calls, and non-renewal follow-up calls.
A carrier that can provide good customer experiences is a carrier that will keep its existing customers and have an easier time expanding its client base. Loyal and happy customers tell others who they are doing business with and, according to a study by Harris Interactive/RightNow, some 9 out of 10 U.S. consumers say they would pay more to ensure a superior customer experience. Finding out what really matters to your customers, how to meet their needs, and how to address their concerns will go a long way toward developing the loyal customer base that is needed in today’s current competitive market. The room for improvement in this area is vast. According to Econsultancy, only 26% of companies have a well-developed strategy in place to improve customer experience. Carriers can get great ideas from Zipari’s white paper: 12 Ways Health Insurers Can Improve Customer Experience and Increase Market Share. Carriers that seize the opportunity to provide individualized customer service through innovative products will rise above the competition to reap the benefits of positive brand image and strong consumer loyalty.