Insurance as we know it has been firmly built based on an acquisition model. While this approach may satisfy most insurance executives, its’ focus is limited. Now that you have these new members, how will you retain them as long-term members? This study shows that “$1 paid towards customer retention increases profits by more than $5 spent on new customer acquisition.”
Here are several ways carriers can cost effectively retain members, reduce churn, and increase revenue while accurately measuring member activity throughout the entire customer journey.
Listen to what your customers are telling you
If every picture tells a story, then a click can translate into a never-ending one. Carriers know when a member enrolls, but do they where and why a prospect dropped off? Can you quickly identify when a member should modify their current plan or consider voluntary products? Carriers have the ability to leverage modern industry specific technologies that can provide valuable member insight by capturing data from every member interaction. This information creates a complete story of the member and allows carriers to proactively engage and determine appropriate coverage for their members.
Avoid the communication breakdown
The insurance industry presents many challenges in the area of communication, clarity and transparency. The majority of consumers lack basic knowledge of health insurance concepts and terms and are unaware of transparency tools. Carriers must remove these frustrating barriers and learn from online retailers. These online retailers constantly engage with consumers through interactions that provide value as opposed to being intrusive. Marketing efforts should be optimized in such a way that members receive communications that are informative and resonate the most. Simplify everything. Are you explaining things in a way that people with minimal education can understand? Are you engaging with your members across multiple channels regularly?
Multiple policies drives loyalty and revenue
If the insurance sector can learn one thing from the banking industry, it is that multiple products can drive revenue and retention with customers. A free checking account was the carrot that lured customers away from one bank to another. Once these new customers were acquired, the key was to cross-sell other products like personal loans, credit cards and other financial services that would make it harder for people to leave.
Insurance carriers can go down a similar path by offering voluntary products throughout the entire customer lifecycle. Carriers can leverage a CRM and data analytics to easily segment members to offer the most relevant products and services to that particular segment through product specific marketing campaigns.
Positive experience + Customer behavior = Greater Revenue
The majority of consumer interactions with their carriers are usually under some distress or lack of attention they are feeling from their carrier. “About one of three (32%) U.S. adults spent a lot of time dealing with insurance paperwork and disputes or were either denied payment for a claim or paid less than expected.” It would be more beneficial to be able to anticipate a member’s needs before a question about a claim escalates. A customer experience platform that can assess member value and sentiment by gathering behavioral information and member data throughout customer journeys would allow a carrier to proactively engage with a member that has been identified as having low member sentiment so that you do not see that member walk away due to a $40 dispute.
Photo: Thomas Hawk