Customer relationships: The insurance differentiator
Here are four strategies for fostering more personal relationships with your insurance customers.
Insurance is becoming a highly commoditized product, with an increasing focus industry-wide on reducing costs and building new actuarial models to get product prices down. While this is ultimately good for the consumer, it has made it hard for different issuers and brokers to stand out in the (still) crowded market. So what can you do to differentiate your offering?
The answer: Build a personal relationship with your customers that’s based on trust.
Why personal relationships matter
Trust — built through personal connections — is one of the few remaining differentiators available to the modern insurer. Not only that, but it’s still the biggest indicator of a long-term sustainable business. Sure, you can try to compete on price, but does your company have the balance sheet to support that strategy? Does management have the stomach for losses in certain markets and product segments while you compete your way to the bottom of the price curve?
Many businesses have competed on scale and price with great success, but there is value to being the contrarian in that market. And connected customers are not only more loyal, but also less price-sensitive. If your customers trust you and feel connected, they’re more likely to stick.
Of course, it’s up to you to proactively establish these relationships, which should start with a holistic focus on customer “relationship experience.” You want to make each exchange about something more than the transaction. Two 2018 J.D. Power studies found that customers are more likely to seek advice on insurance matters from their agents than any other resource. If you’re not available or if you show your customers you are only interested in selling product, another agent will be more than willing to step in. The bottom line: Show your customers that you are there for them.
Take the claims process, for example. It it is common to talk to multiple reps over the course of a claim. Not the most personal of experiences — and a practice that does nothing more than add frustration to what’s already a stressful time, increasing the chances of customer dissatisfaction. One survey revealed that customers were nearly five times as likely to be dissatisfied with the customer experience when speaking to three or more insurance reps. But imagine if you had already built a personal relationship with your customer and that customer looked to you as a trusted and reliable expert. Insurers who achieve this see consistently lower attrition rates, which adds up to big money saved over time.
Four insurance agent strategies
Providing the customer experiences that build successful relationships isn’t always easy. Not all customers want to know their brokers on a personal level, and it can be difficult to determine whether the person you target falls within this category. And even if a customer is interested in getting to know you, his or her needs won’t necessarily mirror the rest of your customer base.
Consider the way a single customer’s needs can change on a dime. A person may not be in the market for life insurance today, for example. Come tomorrow, he or she could’ve lost a job, had another child, or experienced some other life-changing event. As such, you need to build a balanced and consistent framework in your customer relationship strategy that lets you be there when the customer needs you.
So how do you build a business model that facilitates personal relationships with customers? Here are four strategies:
No. 1: Build buyer personas.
Few services are more personal than insurance, so your go-to-market strategy should include buyer personas. Personas allow you to segment your audience and create marketing content, insurance products, and other materials that are highly specific to the individual. Doing so at least gives the illusion of customization and personalization, which in turn offers an opportunity to build a one-on-one relationship. And how do you know what persona should apply to each customer? Ask them! A key component of an effective customer experience strategy is allowing your customers to determine how they want to be interacted with. If you give them that chance, you will be better off in the long run.
No. 2: Maintain consistency.
From communication to service, consistency is key. It establishes a pattern that customers can come to expect, helping to underscore your value proposition and enrich the customer experience. Just make sure to personalize interactions, framing your conversations and messaging in less “scripted” ways. In fact, one survey found that most marketers fail to personalize communication beyond digital channels. Next time you hop on a call, get more customer-specific with the conversation. It should help strengthen the relationship.
No. 3: Use multiple channels.
People are bombarded with communication, so you can’t rely on one channel to make a connection. Instead, use all available mediums, including email, social media, phone, and direct mail. Surprise your customers with personal communications on unexpected channels, like sending a birthday card. It’s the last thing they’d expect a cost-focused, impersonal insurance company to do, and it will have an impact. This touchpoint in particular can make a world of difference in building trust. It also shows you care, which is one of the main reasons consumers connect with a brand.
No. 4: Find a partner.
Most insurance agents and brokers manage hundreds (if not thousands) of relationships, which can make it difficult to maintain a customer-centric approach. Why not plan for reinforcements and engage with your local community? Besides helping to build a personal rapport with a potential customer base, it’s an opportunity to establish relationships with local vendors who can shoulder some of the marketing load. Neighborhood florists, gourmet grocers, and other specialty shops provide gift options that can leave a lasting impression and show your investment in the customer relationship — and nobody ever got in trouble for buying local.
No matter the insurance company, the customer ultimately looks to you, the agent, for advice, service, and responsiveness. Despite the changing strategies and focuses in today’s insurance markets, remember to prioritize your customer relationships first, and you’ll find yourself building a book of business that sticks around for the long haul.
Patrick McCullough is the client strategy director at Hallmark Business Connections, a subsidiary of Hallmark that helps businesses build and strengthen relationships with their customers and employees. He is passionate about helping businesses transform and has worked with companies of all sizes as they look to evolve their strategies in order to match the demands of the customer in the 21st century.
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