Customer satisfaction is the cornerstone of success for any business, but particularly so in the insurance industry.
With a mortgage, the customer is surrounded by the bricks and mortar that they are paying for every day. When it comes to insurance however, the customer is essentially paying for something that they may never (if they’re lucky) need to call upon. It’s a far less tangible proposition and the true value is only ever realised if the worse happens.
It’s true that cost is a significant factor for the customer when it comes to buying any form of insurance however the latest EY Global Consumer Insurance Survey research shows that customer retention and satisfaction is also based upon good, regular communication.
Insurers themselves are notoriously bad at staying in touch with their customers. Having bought a policy and if they haven’t had to make a claim, the customer will generally only ever hear from them again when it comes to renewal.
In my experience, intermediaries are generally better at staying in touch with their customers and the EY research shows that brokers have an enormous bearing upon the behaviour of a customer. However it is important to remember that customers are bombarded more than ever with information via social media and the internet. Therefore every communication you undertake – whether face to face, by email or post, or using digital channels – should be regarded as a ‘moment of truth’ that could influence their future buying decisions.
According to the Harvard Business School, increasing customer retention rates by just 5% increases profits by between 25% and 95%. With that in mind, who wouldn’t develop a customer retention strategy and embedding communication into that programme?
Develop a rolling calendar of communications ranging from letters, calls, ‘thank you’s’, special offers, follow ups and even cards with a personal touch – even if just at Easter and Christmas. If you know your customer is comfortable with social media and other digital channels then use those. You should find that customers respond positively and appreciate the contact as it makes them feel valued and important. It also reinforces the reason why they chose to use your services.
Remember the golden rule – make it relevant, timely and appropriate. If you stick to this then there is a greater chance that your customer will value hearing from you and continue to purchase their insurance through you rather than someone else.
Kevin Paterson is managing director of Source Insurance