Zurich Customer


CUSTOMER BEHAVIOR:

BUILDING LOYALTY INTO YOUR BUSINESS PLAN

5 TIPS TO BUILD A CUSTOMER LOYALTY PLAN

Increasing customer retention requires a proactive and planned approach throughout the year. Here are five ways to get started:

PROGRAM BUSINESS IS GROWING, BUT SO ARE CUSTOMER EXPECTATIONS.

DO YOU HAVE A LOYALTY PLAN IN PLACE?

Program Administrators should be some of the happiest people in the insurance industry. According to a 2017 study by Target Market Program Administrators Association (TMPAA), program business is growing at a faster rate than the overall commercial insurance marketplace and has doubled since 2010, when TMPAA first published its annual report.¹


Growing your business, however, requires not only bringing in new customers, but also creating loyalty among your existing customer base. The 80/20 rule, or Pareto Principle, states that 80 percent of results will come from just 20 percent of actions. Applying that rule, we posit that 80 percent of your revenue comes from 20 percent of your current customer base. This means that it’s critical to develop customer-retention strategies.


Developing loyal customers is good for your business because they buy more products, recommend your company to peers and reduce churn and its associated costs. But creating customer loyalty in the insurance industry is more challenging than ever, as indicated in a 2015 report by Accenture, “Capturing the Insurance Customer of Tomorrow.” Customer expectations continue to rise, while more customers believe there is little differentiation between products and services. “Today’s insurance customer is more empowered, more social and has higher expectations of his/her providers,” explained John Cusano, Senior Managing Director of Accenture’s Global Insurance practice, in the report.²

  1. Target Markets Program Administrators Association. “Program Business Premiums Topped $36 Billion in 2016.” 2017. http://www.targetmkts.com/component/k2/item/1663-program-business-premiums-topped-36- billion-in-2016
  2. Accenture. “ $470 Billion in Insurance Premiums Up for Grabs Due to Declining Customer Loyalty and Perceived Product Commoditization, According to Accenture Report.” 4 August 2015. https://newsroom.accenture.com/news/470-billion-in-insurance-premiums-up-for-grabs-due-to-declining-customer-loya ty-and-perceived-product-commoditization-according-to-accenture-report.htm
  3. Henrik Naujoks, Henrik, et al. “Customer Behavior and Loyalty in Insurance: Global Edition 2017.” Bain & Company. 14 September 2017. http://www.bain.com/publications/articles/customer-behavior-loyalty-in-insurance-global-2017.aspx
  4. Nathan, Sam, and Karl Schmidt. “From Promotion to Emotion: Connecting B2B Customers to Brands.” Think with Google October 2013. https://www.thinkwithgoogle.com/marketing-resources/promotion-emotion-b2b/

1 Ask customers for their communication preferences.

Some customers want digital or text interactions, while others prefer a call. Maybe it’s even a combination of communication methods. Be sensitive to the different communication needs of each customer.

2 Communicate to build transparency.

Building trust with your customers will create stronger, lasting relationships. Be clear and transparent in your communications can help build that trust.

3 Create networking opportunities.

Ask your top customers to join you for lunch with other customers or at a conference or business event. Your customers will enjoy creating peer-to-peer connections to learn from others and to promote their own brands.

4 Inspire a storytelling culture.

Tell stories of customer successes at your employee meetings and encourage your sales agents to do the same with their customers. Training your employees to start with a story instead of facts will create the emotional connection proven to influence purchase decisions.

5 Develop a frequency plan.

Don’t make renewal time the only touch point you have with a customer. Check in with customers periodically about how their business is going, if something new is happening they might need help with, or to share a positive story or insights learned from other customers.

5 TIPS TO BUILD A CUSTOMER LOYALTY PLAN

Increasing customer retention requires a proactive and planned approach throughout the year. Here are five ways to get started:

1

Ask customers for their communication preferences.
Some customers want digital or text interactions, while others prefer a call. Maybe it’s even a combination of communication methods. Be sensitive to the different communication needs of each customer.

2

Communicate to build transparency.
Building trust with your customers will create stronger, lasting relationships. Be clear and transparent in your communications can help build that trust.

3

Create networking opportunities.
Ask your top customers to join you for lunch with other customers or at a conference or business event. Your customers will enjoy creating peer-to-peer connections to learn from others and to promote their own brands.

4

Inspire a storytelling culture.
Tell stories of customer successes at your employee meetings and encourage your sales agents to do the same with their customers. Training your employees to start with a story instead of facts will create the emotional connection proven to influence purchase decisions.

5

Develop a frequency plan.
Don’t make renewal time the only touch point you have with a customer. Check in with customers periodically about how their business is going, if something new is happening they might need help with, or to share a positive story or insights learned from other customers.

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10      PROGRAM LEADER