Who is your best customer? The answer to this question can vary dramatically depending on your industry. A retailer’s best customer is someone who comes back to their store over and over again. A gym owner’s best customer could be considered consumer who pays their monthly on time but never uses the gym. For insurance companies it could be argued that their best customer is closer to the gym analogy than a retail customer. The policyholder who pays their premiums and never makes a claim.
Acquiring new customers is expensive, so keeping the ones you have and increasing wallet share is critical to success. It’s a multifaceted challenge that often comes down to customer experience. The conundrum for insurers is how to improve the customer experience when you have little interaction with your best customers.
A key insight is to know your audience; understand your customers and what drives their behavior. Whilst demographic variables give you a good idea of what a customer looks like, many insurers are finding that behavior data is a much better predictor. Examples of behavioral data would be marriage, moving to a new house or having a baby. But just as important as identifying these event-driven variables and who to target, is also knowing who NOT to target. By removing these non-buying customers from marketing campaigns helps increase acquisition rate, reduce marketing spend saving millions of dollars per year.
One organization with a reputation for exceptional customer service is USAA. A financial services company providing insurance to US military and their families. Doug Mowen, Executive Director of USAA’s Data and Analytics Office recently shared his insights with using analytics for improving the customer experience. To read these insights download the conclusion paper “Five Keys to Marketing Excellence”.
Measuring the impact of customer experience efforts is difficult. Most insurance companies struggle to tie customer experience investments to the bottom line. But ultimately insurance companies that embrace analytically driven customer experience management can get an edge on the competition by enabling better customer experiences, which in turn creates value for their organizations.
I’m Stuart Rose, Global Insurance Marketing Director at SAS. For further discussions, connect with me on LinkedIn and Twitter.
