Three quarters of people would change insurers to a company offering the same product at the same price – as long as they gave them loyalty schemes too.
The figures were revealed in a major survey carried out by M&S for Business that looked into the way companies in the financial sector attract new customers – and keep them.
As well as surveying customers it spoke to insurance industry figures to try and discover what makes a successful acquisition and retention strategy.
While 95 per cent of respondents said price was one of the most important factors when deciding what policy to buy, only 55 per cent said price was the sole reason. It suggests that in such a competitive industry a loyalty or reward scheme to add value to a policy could improve chances of take-up.
Experts agreed and most insurers quizzed said they already ran some sort of reward scheme.
But the survey also revealed that almost half (45 per cent) of respondents did not know if their insurer offered a reward scheme or not.
It suggests that communicating the scheme on offer to customers is just as important as the scheme itself.
Increase Customer Acquisition
The report concludes: “Implementing a reward scheme for loyalty, referrals or signing up to an insurance policy is a great way to increase customer acquisition, retention and satisfaction. However, it is important that the offering is relevant to the individual and offered at the right time.
“Allowing customers to earn points and rewards makes them feel involved with your brand and gives them the feeling that your service is worth more than that of the competition. As with any relationship in life, the one between business and consumer needs to be nurtured and approached delicately.
“That is why research and planning are imperative to the success of a reward scheme. If you get it right, you can build relationships and create brand advocates who will stay with you for a lifetime.”
Encourage Customer Retention
Stuart Lawrence, Head of M&S for Business said: “We know that the insurance industry is one of the sectors where it can be most difficult to encourage customer retention. With insurance usually being an annual purchase and most people hunting for the best priced policies, it can be hard for an insurance company to offer a unique service.
“With this in mind, we have carried out some research to discover what qualifies as a successful customer acquisition and retention strategy within the industry and found that reward schemes are something that is seen as value for a customer.
“We feel that the results of this research are transferable to other sectors within the financial industry and provide an interesting insight into a customer’s perception.”