Knowing Your Customer in an Increasingly Crowded Field is Key to Retention
In the insurance industry, retention is the 800 lb gorilla that can be the difference between growth and stagnation. With an industry average of 16% churn, customer success professionals have their job cut out for them. Additionally, aggregators sites have made it very easy for customers to shop and compare based on price alone so finding and keeping loyal customers is more important than ever. Marketing departments have limited resources to acquire new customers and research shows it costs 9x as much to gain a new customer as to retain an existing one.
Customer satisfaction is a key element of customer retention, but this isn’t your parent’s era for customer satisfaction. The modern tech savvy customer is used to an Amazon level of customization to their user experience. The millennial generation, who is in a rapid period of life change as first-time homebuyers and parents, are particularly interested in targeted communications and comprise up to 1/3 of customers and 41% of revenue. They will tune out generic messaging and zero in on that which most closely meets their own needs.
Fenris Life Events Monitoring and Alerts (LEMA) is the answer to meeting consumers right where they are in their customer journey. LEMA allows you to provide knowledgeable service and proactive communication at a time when customer is particularly likely to churn or shop. Imagine knowing your customer is planning to move at the point they list their house and being able to offer a proactive communication about the process of gaining insurance at a new home. By enrolling in our Life Events Monitoring service, you can monitor to major life events such as “newly married”, “newly single”, “prenatal”, “pre-mover at list” and “new baby” just to name a few.
What better way to show your customer that you value their preferences and respect their time than to make your communications as targeted as possible? By communicating at these specific life events, you to provide a level of customer segmentation and pro-active communication that isn’t possible with catch all messaging. Your customer will feel seen and be receptive to your messaging to make what can otherwise be a stressful time, more seamless. Once you have established yourself as a trusted advisor your customers are far less likely to churn.
Additionally, highly satisfied (5 on a 5-point scale) customers are a growth engine for referrals. In fact, clients who are highly satisfied are 6 times more likely to refer a friend or family member, cross-buy and repurchase than a client who is only “satisfied”.
Finally investing in retention is cost effective. Studies have shown that $1 spent on customer retention is more profitable than $5 spent on new customer acquisition. If you can move the needle and increase retention rates by as little as 2-5%, you can increase profits by at least 25%. Considering the margins of most insurance companies are only 3-8%, the need for retention is great to have a healthy bottom line.