In an attempt to gain more wins in today’s competitive market, insurance carriers are throwing more of their budgets into bigger and better advertising campaigns. But as advertising budgets grow to alarming rates, the unfortunate news is that this seems to be making very little difference for insurance carriers.
In fact, according to the J.D. Power 2015 US Insurance Shopping Study, auto insurers increased their advertising spend by 6% in 2015 compared with 2014, however brand awareness showed a decline – to 60% in 2015 compared to 62% in 2014. For all lines of insurance, research suggests similar trends.
While price will always remain an important factor for consumers, carriers can no longer compete on price alone. It is also becoming increasingly difficult to compete on product as competitors are easily able to replicate new or enhanced products and offer similar products at lower prices, once again engaging in a price slashing game.
The new competitive commodity has quickly become the customer experience. Consumers expect more, want transparency, and expect personalized relationships with their carriers and agents. According to a worldwide survey, insurance companies are not ranking very high on the customer experience playing field. In collaboration with EFMA, Capgemini uncovered that only 30% of insurance customers report a positive “insurance customer experience.” While these numbers are a bit disheartening, there is plenty of room for insurance carriers and agents to step up to the plate and deliver better experiences – and ultimately sell more policies.
Multi-Channel experiences
One of the biggest impacts affecting consumer expectations is the rise of new technologies and digital channels. Consumers are doing more research online and expect easy access to information across these channels. According to research by CEB TowerGroup Insurance, 38% of consumers prefer to research online. However, only 24% prefer to purchase online, which means insurance carriers and agents need an easy way for consumers to transition from channel to channel during the purchase journey.
Because consumers prefer to research online, it is important to have plenty of information, interactive tools, and easy ways to get in touch with an agent. Different consumer segments must also be considered to appeal to the way each prefers to research and engage with an agent.
A millennial may head to your social media sites to check out videos, read about different policies, and then schedule an appointment on your social pages. An older consumer may simply head to your website and to look for an easy way to get in contact with you. A busy professional on the other hand may research across mobile and want the ability to simply click and schedule an appointment at their convenience.
A multi-channel presence and engagement strategy is a huge factor in successfully catering to today’s consumers and creating positive experiences. Especially when you consider that in 5 years, more than 30% of insurer business will occur digitally.
Personalized offers and recommendations
Consumers appreciate offers and messaging specifically tailored to who they are, including their interests and unique life experiences. Be sure you know who your target audience is. You can’t deliver an experience that will resonate with your customers and prospects if you don’t know who they are. This means adding demographics to your customer database – data such as age, income, children, occupation, and lifestyle. With a better understanding of your customer segments, you can personalize offers for individual consumer groups.
Consumers also appreciate relevant messaging when they are going through a significant life event. According to a2013 Scarborough survey, consumers going through life changes are more likely to be receptive to insurance offers. For example, engaged couples are twice as likely to buy a vehicle in the next 12 months, and four times more likely to buy a home in the next 12 months.
In another study by LIMRA, 41% of life insurance shoppers looked for insurance after a life event such as getting married, having a baby or buying a house.
Benefits of positive customer experiences
Consumers will reward those agencies who provide positive experiences. Verint recently conducted a survey in which they asked consumers how they would respond to a positive experience. The overwhelming answer at 61% was to tell family and friends about it. Consumers responded as follows:
- 61% – Tell friends and family about the experience
- 38% – Write a positive review
- 27% – Signed up for their loyalty program
- 25% – Renew or upgrade products/services even if it wasn’t the cheapest option
This is huge as more consumers are increasingly relying on word-of-mouth referrals, recommendations from their family and friends, and online reviews. Creating loyalty, even when their coverage might not be the least-expensive option out there, also goes a long way in identifying new up-sell or cross-sell opportunities.
Positive customer experiences have become more important than ever for the insurance industry. Consumers want personalized communications and the ability to engage with an agent or carrier when, where and how they choose. And when brands deliver, 83% of consumers are more likely to do business with companies that allow them to control where, when and how they interact.
