Is digital killing loyalty? That’s the question posed by a recent Accenture study. Consider that across all industries, the number of customers participating in loyalty programs has gone up by more than 40 percent since 2009. At the same time, nearly two-thirds (64 percent) of customers switched providers in at least one industry. How can this be? How can customers simultaneously express their loyalty (by joining a loyalty program) and their disloyalty (by switching providers)?
The short answer: digital hasn’t killed loyalty, but it has forever changed it. Today, customers are loyal to experiences—not brands, products or companies.
Yet, many companies haven’t gotten the memo. Insurers especially tend to still be product-centric and focused on a linear sales funnel. With such a model, the purchase is a pivotal event, and most loyalty programs focus on the point of purchase but do little to foster a long-term relationship with the customer or encourage more spending.
Digital, then, is a double-edged sword. It empowers customers with more information and opinions and lowers barriers to competition. Notably, it has paved the way for digital giants to enter the insurance industry. But it also offers insurers a unique opportunity to identify what matters to the customer and deliver value through every interaction and any channel. When used effectively, digital can help insurers become a part of a customer’s day-to-day life—to create ongoing, engaging experiences that translate into long-term loyalty.
Learn more about Is Digital Killing Loyalty? and join me next week as I share five keys to driving loyalty in the digital age.