The current economic climate is a daunting prospect. Companies everywhere, irrespective of industry, are struggling to get that necessary cut-through in their own markets. The insurance industry is no exception with hard-hit customers constantly looking to cut the cost of their premiums.
Customer service has now become paramount in winning the battle for customer retention and loyalty. 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?
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. Improving customer communication is now fundamental in achieving this desired goal.
Perhaps, however, this tide is turning. 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.
Thus, the ‘Model Office’ was formed, 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.
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 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. For example, when a major event in a customer’s life (ie birthday, 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, 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 crucial factor behind Aviva’s success here is that they have formed strong, emotional connections with their customers. Companies out there, looking to cut budgets here and squeeze that last 1% profit there, need to take notice of this approach. Survival and growth in today’s world will be based on exceeding your customers’ expectations and a little empathy goes a long way in reaching this reward.
David Wood is a founder of Iris Associates
