THE BREAK UP

WHY INSURANCE COMPANIES ARE GREAT AT ACQUISITION BUT BAD AT RETENTION, AND 5 WAYS INSURANCE BRANDS CAN KEEP MORE CUSTOMERS.

2THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

The reality is that it’s a whole new insurance ballgame, requiring a whole new approach.

CUSTOMERS ARE BREAKING UP WITH THEIR INSURANCE PROVIDER.

INTRODUCTIONHanah Holpe

Once upon a time… insurance was sold exclusively by Agents – primarily relying on building relationships and generating word-of-mouth to drive business. But today, customers have stopped caring about relationships because many insurance companies have stopped focusing on them. Outside of receiving a bill or filing a claim, a policyholder has only infrequent contact with his or her insurance carrier. And that contact isn’t typically by choice—driven by a need to file a claim or update coverage. Consumers have been choosing providers by convenience, or even price.

The following pages highlight some top-level findings and focus on five ways Jack Morton can improve your customer experience. We’d love to hear what you think.

Hanah HolpeCreative Strategist at Jack Morton Chicago

3THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

However, we found an interesting gap…believe that the experiences they’ve actually had with brands have been extremely or very unique

Only 26%

CONSUMERSVALUE EXPERIENCE.In a recent study we conducted, we discovered that1…

80% 87% 78%Agree (60% strongly) that overall experience is the #1 factor when deciding to purchase a product or service.

Agree that previous experience is important (62% very important) when choosing brands to use in the future

Agree (44% strongly) that they’d pay more for a product or service if they knew they’d have a unique experience with that brand

4THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

It’s really about the experience above all else.

AND THERE ARE HIGH EXPECTATIONS FOR THE WAY AN INSURANCE BRAND ENGAGES.Sure, price is a key factor when shopping for insurance, but it isn’t the only thing that matters. In fact, 10% of recent auto insurance shoppers didn’t select the lowest priced quote.2

Research shows that strong customer advocacy and superior customer service are rated the top two things customers look for in insurance providers.

66%

64%

of recent auto insurance buyers said “strong customer advocacy” makes a big difference when choosing an insurance brand.3

of recent auto insurance buyers said it’s important for a brand to be known for “superior customer service.”3

5THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

YET, THE PRICE TUG-OF-WAR IS COMMONPLACE.

Customers are armed with an increasing number of price-comparison shopping tools. And brands are playing along with the price war with constant “switch and save” messaging. But really, how low can insurance companies go?

In addition, switching rates have sharply increased – doubling from 2005 to 2011, rising sharply since 2008.4

6THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

AND THE SPLASHY AD CAMPAIGNS ARE PERVASIVE.Do-it-yourself, rate-shopping companies and traditional insurance companies are all campaigning to be the loudest – investing a lot of money on mass advertising (4.15 billion in 2009 – more than double what the industry spent in 2000), and even on multiple campaigns at once.5

It’s a competition to be the loudest, most convincing, or cheapest.

Sure, the messaging is attention grabbing and they’re getting creative on storytelling, but they’re doing very little to deliver on that investment. Ultimately, they’re losing, rather than retaining, the customers acquired.

INSURANCE BRANDS WILL RETAIN MORE CUSTOMERS ONCE THEY GET BACK TO ENGAGING WITH THEM (NOT JUST TALKING AT THEM).

8THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

EXPERIENCE BRANDS CREATE DEEPER, STRONGER RELATIONSHIPS THROUGH ENGAGEMENT. Many brands are wising up. They recognize the power of experiences can inspire people and drive business growth. They’re investing in unique engagements and maximizing every touchpoint where they interact with key audiences. We call these brands “experience brands.”

They fall short at exactly those moments when a brand can build a relationship with its most important people.

However, too many insurancebrands are still missing the mark.

9THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

TO BE AN EXPERIENCE BRAND, INSURANCE BRANDS SHOULD…

AVOID THE PRICE WAR AND FOCUS ON HOLISTIC VALUE

TRANSFORM THEIR EMPLOYEES AND CUSTOMERS INTO BRAND ADVOCATES

CREATE CROSS-CHANNEL CONSISTENCY FOR A SINGULAR COHESIVE EXPERIENCE

DELIVER SUPERIOR CUSTOMER SERVICE BY ENHANCING OWNED MEDIA

BUILD LOCAL RELATIONSHIPS TO GENERATE QUALITY REFERRALS

1.2.3.4.5.

10THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

AVOID THE PRICE WAR AND FOCUS ON HOLISTIC VALUE1.

Price matters to shoppers and customers alike. But what matters most is the return on experience (ROE) brands provide.

Make it your goal to redefine what value means to your brand – not just customers’ pockets – by championing the unique offering (beyond your products) you provide to customers.

Every interaction your brand has with customers and shoppers should provide an inimitable interaction that brings your brand’s unique offering to life – your brand, your people and the experiences you provide help differentiate.

YOUR

BRA

ND

UNIQUEVALUE

YOUR

EXPERIEN

CES

YOUR PEOPLE

11THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

TRANSFORM EMPLOYEES (AND CUSTOMERS) INTO BRAND ADVOCATES

2.Similar to any franchise model, keeping the brand consistent from marketing to field agents is difficult. Align and guide your most important assets – front-line employees including Agents, Agency Managers, Customer Service Reps and Sales Reps. They can be your greatest advocates—transforming your customers into advocates, too. A three-pronged focus will help your Agents become a relationship-focused and make your brand a proactive, service-oriented brand.

Distribute focused, timely and relevant communication to your workforce so they’re up-to-date on key messages and programs

Provide a forum for agents to share insights and ideas, fueling a sense of ownership and responsibility for corporate initiatives

Equip agents with useful tools and information that empower them with confidence to advocate your brand

COMMUNICATE

ENGAGEBRAND

PASSIONATES

EMPOWER

12THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

CREATE CROSS-CHANNEL CONSISTENCY FOR A COHESIVE EXPERIENCE

3.Today, insurers rely on multiple channels: along with agents, they sell directly through call centers, the web, and increasingly, mobile devices. And the consumer is in the driver’s seat – expecting to seamlessly and conveniently hop from one channel to the next.

Cross-channel selling is complicated. And while every touchpoint should be customized by audience and need, focusing on holistic experience design – choreographing the interactions between a brand and its most important people – makes a big difference. Create simple and direct transitions from one touchpoint to the next to enable customers to focus on the experience rather than the logistics.

DIG

ITAL.

MO

BILE

. SO

CIAL

.

DIGITAL.

MO

BILE. SOCIAL.

DIGITAL. MOBILE. SOCIAL.

FIELDOFFICE

SALESCENTER

CLAIMSCENTER

CURRENT CUSTO

MER

SNEW

SH

OPP

ERS

13THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

DELIVER SUPERIOR CUSTOMER SERVICE BY ENHANCING OWNED MEDIA

4.Insurance is an intangible product (not to mention complicated). Owned media experiences – the touchpoints and assets your brand owns – in the customer’s shopping, purchasing and service journey are most important in helping make it as simple, empowering, helpful and tangible as possible. Three owned media channels are key: your digital ecosystem, your people and your environments. Enhancing owned media will, in turn, influence positive earned media.

• Empower consumers with easy- to-use online tools and apps • Balance education and entertainment on your website • Leverage social media for ongoing customer service and insight- gathering

DIGITAL PEOPLE ENVIRONMENTAL• Provide a clear set of customer service expectations to deliver a seamless experience• Offer educational and training opportunities that focus on the customer experience• Develop a platform for employees to stay up-to-date on campaigns and programs

• Develop a kit of parts to make each local office experience feel and look the same • Make each local office environment feel like a destination• Bring your office into the community with a pop-up or mobile experienceCOOL STAT!

48% of Millennials

(compared with 28%

of Baby Boomers) get

insurance quotes

online.4

14THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

BUILD LOCAL RELATIONSHIPS TO GENERATE QUALITY REFERRALS

5.Relying on cold calling will do very little in building relationships (not to mention little opportunity to differentiate from the competition). What generates the most successful and long-term business is creating a pipeline of quality referrals – from both your most loyal customers, of course, but also your (many times overlooked) local business partners. From mortgage brokers and real estate agents to the local go-to auto shop, these connections can help Agents tap into a pool of like-minded, relevant shoppers.

Create appreciation programs for your most valuable local business partners to encourage referrals, celebrate your partnership and generate brand loyalty.

Integrate business partner referrals into your sales goals and metrics to encourage the field to hunt for new relationships and strengthen existing ones.

Develop a standard process when engaging partners for agents and agency managers to fully maximize the long-term power of these business partners.

15THE BREAK UP: 5 WAYS INSURANCE BRANDS CAN RETAIN MORE CUSTOMERS

INSTEAD OF GETTING INVOLVED IN A SEEMINGLY NEVER-ENDING ACQUISITION COMPETITION, MAKE IT YOUR PRIORITY TO SATISFY AND RETAIN CURRENT CUSTOMERS BY HAVING MEANINGFUL INTERACTIONS WITH THEM.

THE LONG-TERM RELATIONSHIPS INSURANCE BRANDS CREATE WITH THEIR MOST IMPORTANT PEOPLE –FROM EMPLOYEES TO CUSTOMERS, SHOPPERS, BUSINESS PARTNERS AND THE LOCAL COMMUNITY – IS KEY TO BUILDING A STRONG BASE OF LONGTIME CUSTOMERS.

IT’S TIME TO GET BACK TO ENGAGING (NOT JUST TALKING).

RESOURCES 1. Jack Morton proprietary study, “The Best Experience Brands”, 2011

2. J.D. Power & Associates Reports, “Importance of Price to Insurance Shoppers Increases, While Satisfaction with Price Decreases”, 2010

3. Forrester, “The US Auto Insurance Buyers Journey”, 2009

4. McKinsey Consumer and Shopper Insights, “Consumers Shake Up the Insurance Market”, June 2011

5. Advertising Age, “How the Insurance Industry Got Into a $4 Billion Ad Brawl”, February 2011

ABOUT JACK MORTON JACK MORTON WORLDWIDE IS A GLOBAL BRAND EXPERIENCE AGENCY WITH OFFICES ON FIVE CONTINENTS. OUR AGENCY CULTURE PROMOTES BREAKTHROUGH IDEAS ABOUT HOW EXPERIENCES CONNECT BRANDS AND PEOPLE—IN PERSON, ONLINE, AT RETAIL AND THROUGH THE POWER OF DIGITAL AND WORD OF MOUTH INFLUENCE. WE WORK WITH BOTH BtoC AND BtoB CLIENTS TO CREATE POWERFUL AND EFFECTIVE EXPERIENCES THAT ENGAGE CUSTOMERS AND CONSUMERS, LAUNCH PRODUCTS, ALIGN EMPLOYEES AND BUILD STRONG EXPERIENCE BRANDS.RANKED AT THE TOP OF OUR FIELD, WE EARNED OVER 50 AWARDS LAST YEAR.

© Jack Morton Worldwide 2012

CONTACTDoug Wilber+1 312 274 6034doug_wilber@jackmorton.com