Only one in five customers feels that their insurer values their business, according to a new study commissioned by customer benefits and loyalty firm Collinson.
In a survey of more than 2,000 consumers, Collinson found that many insurers are jeopardizing customer loyalty by failing to offer a personalized experience for customers. Just one in five (19%) said they felt valued by their insurer, more than a third (35%) said they received offers or loyalty initiatives they would never use, and 34% said they received too many pointless communications. Thirty-one per cent (31%) said they received communications that weren’t personalized at all, and just 24% said that their insurer treated them like an individual rather than a number.
Twenty-one per cent (21%) of those polled said they intended to switch insurers because they didn’t feel valued, and 15% said they would switch due to a lack of personalization.
“In an industry with traditionally high consumer inertia, these figures are significant,” Collinson said.
“Consumers are choice-rich and savvy, and the balance of power has shifted in their favour,” said Steve Grout (pictured), director of loyalty at Collinson. “They understand their worth and expect to be rewarded for their loyalty with highly relevant and personalized experiences. It only takes one bad experience to undermine customer trust. By failing to understand what matters to their customers and to treat them as an individual, insurers are effectively sending them into the arms of a competitor.”
A Collinson-commissioned study conducted by Forrester Consulting, which surveyed decision-makers at financial-services companies with revenues exceeding $300 million, found that a quarter didn’t have a deep understanding of why their customers were loyal. At the same time, two thirds said that improving customer loyalty and advocacy in the next year was a high priority or critical business need.
Less than half (45%) of the surveyed decision-makers tracked and analyzed the behaviour of their most loyal customers and adapted their recommendations for products or services accordingly. Meanwhile, 53% aren’t collecting sufficient data to gain a deeper understanding of what their customers want.
“Given the depth of customer data available and the proliferation of tools to analyze and mine that data, it’s disappointing that so many insurers are taking such a blanket approach to loyalty in 2018,” Grout said. “Insurers urgently need to raise the bar on their approach to loyalty. So many are apparently flying blind in an age when customers have more power, choice and higher expectations than ever before.”