The insurance industry is a notoriously difficult one in which to profit, with enormous amounts of data put through incredibly complicated risk analysis formulae required to set premiums, and the possibility of huge numbers of unforeseen claim expenses coming through at once. Additionally, competition legislation which makes it easy for customers to switch insurers means that customer satisfaction is more critical than ever to profits.
The most obvious method of satisfying customers in the insurance industry, paying a high percentage of claims, is unfortunately a method that eats directly into profits. So today we look at the facts and figures, and think laterally about what customer satisfaction means in the insurance industry and how to create it.
The Changing Face of Insurance Customers
We know that the things that keep insurance customers happy are changing, because we know the customers themselves are evolving! Compared to the baby boomers, e-surveys have found that the new generations of insurance shoppers are:
- Not responsive to traditional advertising methods
- Incredibly savvy about using the internet to gather and compare information about companies
- More sensitive to customer experience than to price
- More likely to be referred to a company by word of mouth
- More likely to switch insurers several times over their lifespan
Therefore, satisfaction for the upcoming generation of insurance purchasers is linked more to their own experiences of the company, to other customers’ experiences of the company, more to your online presence and reputation, and less to the price of your product. Contrary to popular belief, it seems that insurance customers are certainly willing to pay more for better service!
How to Create Customer Satisfaction in the Insurance Industry – And What All Industries Can Learn From It.
We always recommend designing and administering your own customer satisfaction surveyin order to get information that is specific to your procedures, your market position, your staff … and your customers! However, customer surveys administered by other companies also hold some valuable, though general, insights, including:
- Contactability is key: A core issue in good customer experience is the accessibility and attitude of your frontline staff. Make sure you have enough customer facing/call centre staff, that these staff have enough training.
- Ethics are important: If customers perceive a disconnect between what you appear to be saying, and what you do, they are likely to switch at the drop of a hat. Insurance salespeople are not perceived as a trustworthy profession, but that doesn’t mean customers tolerate weasel words and disingenuous marketing.
- Every action is important: Consistency is the key to customer satisfaction – remember that any poor customer experiences will likely be recorded by disgruntled customers online and then seen by your potential new customers.
- Loyalty discounts don’t always matter: Remember that price is less of a factor for the new generation of insurance purchasers? That means that discounts are less important, too.
- ‘Refer A Friend’ programs having limited success: Many companies have tried to capture the power of word of mouth by rewarding customers for referring friends. However, the take up rate is notoriously low for these programs.
Customers are not so difficult to figure out … especially with the implementation of easy-to-use, cost-effective customer satisfaction measurement tools.
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