Customer loyalty is arguably one of the most determining factors of success for a company. However, whilst this loyalty could have been taken for granted in the past, it is now a priority for every business. In this article, we discuss how customer loyalty has changed over the last few years and how the banking and insurance industry can adapt.
Digitalisation is a buzzword that we hear about frequently. However, it is an unmissable driver of change in every industry that does need to be taken into account. It is no news that customers are becoming increasingly tech-savvy. Despite the slower adoption, even the older generations are starting to make more use of electronic devices for their everyday tasks. Everyone appreciates the convenience and ease to do or buy anything online through just a few clicks.
Because reaching customers online has been made easier, there are more companies investing on customer acquisition through digital channels. Whilst this is great for customers, as they get easier access to a wide range of options, the same can’t be said for businesses. Instead, there is now more competition than ever. On top of that, innovative start-ups are attracting customers with their hyper-personalised offers and customer-centred approach.
The market is oversaturated and companies from every industry are battling to get customers’ attention. This also means that your current customers are more likely to try other services, develop interest for other products and, if they find a better offer, change provider. Digitalisation in itself challenges customer loyalty and prompts businesses to come up with other strategies to keep their customers engaged.
The adoption of digital channels surged when the covid-19 pandemic hit. Customers used their electronic devices more, and they got used to the speed, ease and convenience that these devices offer. Tech-savvy customers are not only more difficult to impress, but more difficult to keep engaged. Customers are certainly demanding when it comes to technology, but their main expectation is simple: a seamless and user-friendly experience from the moment they research services to the moment they click the “pay” button. Everything matters, and companies can’t neglect even the smallest of details.
The pandemic also made customers realise just how many other brands are there in the market. The stockpiling craze that emptied endless rows of supermarket shelves, for instance, forced many customers to buy from brands that wouldn’t be their first option. As customers try out new products and services, they begin to compare factors such as pricing and quality, and start to revaluate their choices. In fact, a McKinsey report shows that 3 out of 4 customers have tried out new brands during the pandemic.
With more and more brands on the market and increasing competition, companies simply can’t afford not to invest in customer relationships. However, some industries find it more difficult to build relationships with customers and keep them engaged. Insurance, for instance, is seen as a mandatory and preventative purchase, and it isn’t a service that customers are naturally excited about. So how can insurers make sure that their customers are engaged and stay loyal to the company?
Loyalty and reward programmes can apply to any industry and play a significant role in customer retention. According to a YouGov study, 73% of UK residents believe that loyalty programmes are a great way to keep customers engaged. Everybody likes to be rewarded, particularly long-term customers. By offering some kind of loyalty or reward scheme, insurers not only create a new way of engaging with customers and keep them satisfied, but are also more likely to recommended to customers’ friends and family. The goal is to make sure that customers are happy and engaged all the time- not just when they receive a claim reimbursement.
Loyalty schemes may vary deeply depending on the type of policy. Insurers may wish to reward their customers for healthy behaviours, responsible driving or even merely for their loyalty to the company. These schemes are also a great way for insurers to gain valuable insights into customer behaviour and understand their customer preferences. With our MicroSavings solution, for instance, insurers can be a part of their customers’ savings journey and maintain regular contact with them.
Another way to ensure customer satisfaction and retention is to offer value-added services on top of the regular policy. These can include risk management consulting, claims management support or, as we mentioned above, loyalty programmes. Value-added services or products help the insurer to establish a closer relationships with customers and make them feel more valued. On top of that, it generates more profit for the company. Overall, it is a win-win situation.
One major factor to keep in mind whenever building or developing new products is the demand for hyper-personalisation. Customers are not looking for cookie-cutter services. In order for them to feel valued and appreciated, they need services that are tailored to their particular needs, along with excellent customer support. In the end, the more useful interactions insurers can have with their customers, the more likely customers are to continue renewing their policies. It isn’t just a price matter anymore- it’s rather about really understanding the customer, realising what exactly they need and continuing to deliver an excellent all-around service from the moment a policy is signed, to the moment a claim is reimbursed.
Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.
In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.
Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.