Research finds that failure to recognise and personalise service are the biggest weaknesses in insurers’ loyalty and customer experience programmes
Research commissioned by Collinson reveals many insurers are failing to offer a personalised experience for customers – and are jeopardising customer loyalty.
The survey of more than 2,000 UK consumers revealed that just one in five (19%) felt valued because their insurer recognised and rewarded their loyalty. Over a third (35%) said they received offers or loyalty initiatives that they would never use and 34% received too many pointless communications. Almost a third (31%) said they received communications that weren’t personalised at all. And less than a quarter (24%) believe that their insurer treats them like an individual, not just a number.
Despite these sentiments, only 21% of those polled intend to switch insurance providers because they don’t feel valued, while 15% would switch due to a lack of personalisation. In an industry with traditionally high consumer inertia, these figures are significant.
Steve Grout, Director of Loyalty at Collinson, believes part of the issue is insurers’ failure to use data to understand why their customers are loyal to their organisation. “Consumers are choice-rich and savvy and the balance of power has shifted in their favour. They understand their worth and expect to be rewarded for their loyalty with highly relevant and personalised experiences. It only takes one bad experience to undermine customer trust. By failing to understand what matters to their customers and to treat them as an individual, insurers are effectively sending them into the arms of a competitor.”
Indeed, a Collinson commissioned study, conducted by Forrester Consulting, which surveyed decision makers at financial services institutions with revenues exceeding $300million, revealed that a quarter (25%) don’t have a deep understanding of why their customers are loyal, yet two-thirds (66%) say that improving customer loyalty and advocacy in the next 12 months is a high priority or critical business need.
The study found that less than half (45%) track and analyse the behaviour of their most loyal customers, adapting their recommendations for the next product or service accordingly. Moreover, a staggering number (53%) are not collecting sufficient data to build a bigger picture of the customer. This is despite such data allowing businesses to gain a deeper understanding of who their customers are and what they want, allowing brands to provide a flexible, personalised offer.
Steve Grout added: “Given the depth of customer data available and the proliferation of tools to analyse and mine that data, it’s disappointing that so many insurers are taking such a blanket approach to loyalty in 2018. Insurers urgently need to raise the bar on their approach to loyalty – so many are apparently flying blind in an age when customers have more power, choice and higher expectations than ever before.“