Carriers that define and execute a dedicated strategy for customer retention could realize a significant payback, as each percentage point of retention can amount to millions of dollars in premium revenue. In the Accenture report, Hanging on: A new look at commercial insurance customer retention, we outline the four areas that an effective customer retention strategy should address. In this post, I’ll examine customer stickiness.
Carriers traditionally have attempted to discourage agents from transitioning customers to competitors by emphasizing product features and, occasionally, claims service. In most cases, though, carriers have been unable to differentiate themselves enough to drive retention.
According to the results of Accenture’s 2014 Independent Agent Survey, the two factors that most deter agents from moving customers to another carrier are the ease of doing business with the incumbent and customer experience expectations.
To increase customer stickiness, carriers will have to employ new strategies that spotlight their clear superiority, making customer transitions to an inferior service a difficult task for agents. A few ideas include:
- Drawing from internal data to develop value-added services, such as more intelligent risk management or loss services.
- Forming alliances with outside vendors to provide complementary services.
- Taking advantage of digital technologies to provide core or complementary services directly to customers.
- Offering billing structures that better meet customers’ needs. The surety market already does this by tying billing to project stages rather than to a calendar date.
To learn more download the report: Hanging on: A new look at commercial insurance customer retention
Next time: The renewal experience.