In this bleak current economic climate, companies from all industries are struggling to get the necessary cut-through in their own market. One example of this is in insurance where customers are seeking to cut the cost of their premiums. Good customer service has now become paramount in order to secure the loyalty of those customers who could be tempted to get their insurance elsewhere.
As a result, empathy isn’t usually a term associated with the insurance industry. Yet, why is this so? Conventional wisdom has always suggested that it costs more to win a customer than it does to keep one, so shouldn’t there be a greater emphasis on customer service? It’s a proven fact that engaging with your customer on an emotional level leads to increased brand loyalty. Deal-seeking switching behaviour has encouraged a culture of short-termism in insurance, where too often a lack of customer engagement leads to customers being rewarded for changing supplier, not for staying loyal to one. How we communicate with these customers therefore is fundamental in reaching this desired goal.
Aviva, the UK’s largest insurer, has recognised this trend and identified that its customers are seeking a more personal relationship with their insurer, and value proactive product support and advice based on their individual circumstances. For these reason Aviva set up the ‘Model Office’, a ‘test and learn’ initiative devised to grow customer value and cross-sell life and health insurance products to carefully selected target group of new Aviva customers. Model Office trials a more customer-centric approach to customer management before rolling significant infrastructure, sales and training changes out throughout the organisation. The traditional product-specific structure has been replaced with a team of multi-skilled, dedicated sales and service advisors acting as a single point of contact; all trained in the various Aviva product offerings. Customer dialogue is supported through a single customer view database which enables access to all customer data, call record management and outcome recordings by all Model Office advisors. This means the team can have personal, relevant conversations with prospects, often resulting in sales opportunities beyond the initial reason for the customer call.
Coinciding with this, the customer brand experience is rounded off through a personalised direct mail and email strategy, created and implemented by us at Iris Associates. A tailored ‘Welcome Pack’ survey is sent to welcome the customer and introduce them to the initiative. This survey allows Aviva to secure marketing preferences while collecting lifestyle information that is used as a framework for future communications. For example, when a major event in a customer’s life (i.e birthdays, end of tax year, retirement etc) arises, Aviva sends out personalised emails and outbound calls, demonstrating their understanding of the individual. Themed monthly campaigns are also conducted through email and postcards by us, but the crucial factor with these is that the focus isn’t on product-driven content, but a lifestyle theme showing how insurance products can enhance day to day life. The obvious, ’hard hitting’ ad we normally associate with this sector is replaced with a softer, caring tone, refreshing for Aviva’s customers.
What can we learn from this approach? On a financial level, Model Office car policyholders were found to be more likely to buy a subsequent home policy than a control customer who had gone through the standard customer journey. Model Office customers are also more likely to buy a Protection product compared to typical customer, or to buy a subsequent annuity product. Clearly, the approach pays dividends for customer brand bonds, as well as customer satisfaction, with Net Promoter Scores for Model Office customers some 40% higher on average than customers undergoing the traditional customer journey.
This venture is allowing the brand to build a deep underlying trust that has created the ultimate reward: brand advocates. Companies, looking to survive the current recession, are all too eager to cut their budgets and squeeze that 1% profit where they can. Empathy is the crucial factor needed and exceeding your customers’ expectations will pay dividends for survival and growth. Doubters only need to take notice of Aviva’s success in this approach.
