Dudley Larus explains why talking beats mailing to boost business
Readers do not need reminding how competitive the insurance industry has become. New entrants, the internet and increasing regulation has resulted in squeezed margins and diluted customer loyalty.
Acquiring and maintaining new and existing clients is a major challenge for brokers who need to spend more time, effort and money to ensure that they keep the customers they have, and still replace the customers they lose.
In the past, brokers have invested in 'reactive' marketing campaigns, which entailed waiting for customers to call them, rather being more proactive'.
Direct marketing tools, such as direct mail and advertising, obviously help to build brand awareness, but the onus still remains with the existing or prospective customer to call the supplier.
It is hardly surprising then that the results can be poor with response rates as low as 2%. Based on feedback from insurance providers, part of the reason for this is that insurance is one of the most complex financial products that an individual can buy. This is further complicated by the increasing regulatory information that must now be included when selling a policy.
When using direct mail, first, you need to capture someone's attention, and then the customer needs to read and fully absorb the information on the printed page.
Many insurance organisations are beginning to recognise that complementing their brand-building exercises by actually talking to new and existing customers can achieve better results.
Getting desired results also comes through representatives personally handling objections of customers considering a particular policy; something that is difficult to achieve via direct mail.
As part of the world's second largest insurance broker, Aon warranty group, is using this approach on behalf of a number of its affinity partners. A team of customer services representatives call existing customers to cross-sell complementary insurance products.
Not only is it helping it to win new business from the end-customer, but it also helps it to secure new deals with other affinity partners.
Aon implemented Amcat's unified inbound/outbound contact management system and sales increased from 4% using direct mail to 14% with the contact centre operation - a 75% increase in sales conversions.
Jon Russell, divisional director for contact centres at Aon warranty group, says: "Not only does this method dramatically reduce our cancellation rates, but it is also a critical part of our market research and on-going customer service."
But why is a unified contact management system important? First, it eliminates artificial walls that are typical in organisations today, resulting in minimal sharing of customer information.
We have all experienced the pain when we have called a company with whom we only spoke with a few days ago, or we've bought one of their products, or they called us, and yet they still don't know who we are and what our issues are.
When the contact centre has a common database and contact routing structure, representatives can easily access your data and display it on their desktop.
Additionally, all contact types such as inbound and outbound customer contact data can be linked and customer satisfaction goes up.
Second, a unified contact system allows organisations to act on existing data to implement proactive and tailored contact campaigns.
"The automated system is used to record and archive all calls, so that we can comply with all the industry regulations and also be fully prepared for regulatory visits by the FSA," says Russell.
What is clear from Aon's experience is that maintaining verbal contact and managing customer interactions is crucial. It can increase conversion rates.
In an industry where on-going renewals are its lifeblood, it may be time to review your customer contact processes and look at implementing fundamental changes to improve your results. IT
' Dudley Larus is vice president of marketing at Amcat