Insurers and Customer Relationship Management: Time for the Real Thing

In the old days, before health care reform and the escalating costs of insurance (health and other types), customers never expected to hear from their providers. Checks were written, and if a claim was filed, you dealt with the customer service. Maybe you heard from an agent once or twice, but customer service was the only kind of “customer relationship management (CRM)” that existed.

Clearly, times have changed. Consumers have more choices than ever before when it comes to health care coverage, and there are even more property and casualty companies offering policies than during those same “good old days.” With prices higher and higher, customer churn is no longer a rarity—it is a situational and economically-driven reality.

During instances of churn, the consumer self-talk dialogue begins as a nagging sense of discord, and goes something like this:

• “Those premiums are really going up.”
• “What am I getting in return?”
• “Let me see—what were my claims?”
• “OK…let me see what else is out there.”

That customer is now—thanks to instant quotes online and the intrusiveness of relentless banner ads–a wandering one.

Once he or she finds less-costly coverage—and of course he or she will because it does exist—that thought process becomes one of simply trying to justify staying with your brand. And, if he or she hasn’t heard from you except at renewal or claims time, which may actually have contributed to his lack of connection to your brand in the first place, they are thinking something like this:

• “I haven’t heard from them except at renewals or claims time, so…I’m not really that connected to that brand in the first place.”

So now, that wandering and restless customer morphs into the kind that goes out for a latte and never comes back. After all, none of us likes confrontation, as in “My premiums are really high and I’m thinking of switching, what else can you do for me?”

Can this relationsihip be saved? The answer is probably no. However, the REAL answer is: DON’T LET IT GET THAT FAR!!!

Communication, as in good personal relationships, is critical. Other industries have taken a more aggressive lead and have gotten substantially ahead of the insurance business in terms of adoption of these principles. The concern for the bottom line is likely to blame. But the truth is, whether your customer is worth $1,500 or $20,000 to you annually, there is a plan for communicating cost-effectively and measurably with that customer. CRM puts you in control, and depending on how sophisticated your systems and marketing are, you can utilize CRM to help you track and measure overall churn prevention and reduction.

Worst thing you can do: wait to establish a dialogue with your customers and members…and then discover that the competition is launching a no-holds-barred marketplace assault to win competitive share (in other words, stealing from your customer base). Then you are in scramble mode and hoping to stave off revenue loss.

In Part 2, we talk about how this scenario can be staved off.

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Direct Choice Inc. is a full-service direct marketing agency that has worked with national and regional brands in a wide variety of vertical markets. In addition to this blog, you can also find us on Facebook, Twitter, YouTube and LinkedIn.