Webhelp customer solutions director Dave Pattman talks churn and what the insurance industry can do to improve their level of renewals when desigining the digital customer journey
Ever wondered why insurance has one of the highest customer churn rates in the UK service industry?
Perhaps it’s because customers buy insurance but rarely use it, making relationships hard to forge. Or, perhaps insurers have been indifferent, believing investments in relationships won’t generate returns.
That indifference could be the reason why price is often the biggest – and often only – factor in insurance buying decisions.
When customers attach little value to a product and feel no loyalty towards its provider, they inevitably buy on price.
Return on relationship investment
In fact, investing in relationships does deliver. Evidence shows that insurance customers who feel engaged are less likely to churn and will tolerate a price differential of up to 15% before they do.
But building relationships doesn’t depend on being ‘nice’, it depends on being knowledgeable; knowing what customers want, how they behave and what they value. Impossible? No.
In the same way your actuaries use analytics to evaluate risk and set pricing, analytics can help extrapolate valuable insights from the thousands of interactions your customers have with you every day.
Those insights can become the foundation stone on which you can build customer relationships that encourage loyalty and price tolerance and deliver greater returns.
Analytics applied to key customer journeys – application, onboarding, claims – will identify ‘moments of truth’ which, executed well, will cultivate engagement.
When it comes to value building, analysis of customers’ demographic profile, life-stage and past behaviour will indicate what they’re likely to buy next. Analysing interactions will identify when best to make the offer and how. Surely building loyalty and increasing product up-take are key priorities?
Designing the journey
Analysing customer interactions – and where they succeed or fail – will help you to design journeys that are easy for the customer and profitable for you.
Designing customer journeys based on insight rather than guess work won’t just win their hearts, it will reduce operational cost too. If you’ve always assumed that relationship building with customers is a luxury you can’t afford, think again. If you want to escape the price war that characterises today’s industry, it may be a necessity you can’t afford to be without.
Find out more about how to make relationships deliver by downloading Webhelp’s paper, Insured against loss: How insurers can win customers and keep them here:
Dave Pattman and his team work across industry sectors to design and deliver analytics-driven customer journeys that boost engagement and profitability.