The End of Loyalty

The loyal customer – a dying breed.  Do you have the customer whose been with the company and/or agency two years and insists on being your most loyal customer?  In the age of instant gratification – two years is a long time for the younger generation. Loyalty word lettering

According to a study by Accenture 28% consumers are loyal to providers and brands and according to the same study, customer loyalty programs abound in the industry.

Think of all the discounts we offer on the auto policy alone.  Up front, most have the ‘loyalty discount’ which may increase for the time the insured stays with the company.  Or the rewards and discounts for being a long-time customer and being accident-free.

Like me, you have an example or two of the type of customer I am referring to here.  They have notes on the file dating back years, the claims history is small but heavily noted because they call a lot, and they have a car ten plus years with full coverage.

These are the insureds that have been loyal for 25 to 45 years.  There are not a lot of US insurance companies older than 150 years, but to have a client that’s been with you for a quarter to 1/3 of that time is extremely rare.  What about the customers that have endured through a company name change?

The average customer stays with one insurer between 7 to 10 years.  Half quit doing business with a company immediately after a bad sales/marketing experience, one-quarter took to social media, and 54% started engaging with other companies. So, shouldn’t those 25 plus year customers have additional discounts and services?  Maybe a special team or VIP status?

loyaltyThat loyal age group is typically over the age of 50.  They don’t have email, internet, and they don’t like self-service.  These customers prefer face to face.  Further, they rely on SSI or may be in the hospital when that bill comes due.  Accident forgiveness may go a long way with them since they are generally in a higher accident criteria.

According to the same Accenture study – 78% of insureds prefer to work with a real person to get a policy and/or report a claim.  They don’t want to ‘do it on the cell phone’ or ‘leave a message’.  My own guess is most of, much of that figure is the customer base I’m speaking of.

If you have a risk assessment done, they want to meet with the person coming to the house face to face; they ask the mortgage to broker the name and contact information for the appraiser; they read the policy.  It maybe they have ‘too much time on their hands’, but more likely that it’s the generation they’re from that is affecting the decisions they make.

Unfortunately, our US companies will find ways to kick them to the curb.  The rates will increase due to their age; they’ll push self-service repeatedly; make agents/offices hard to come by; and/or make a single, simple transaction hard to process.  Going forward, it seems, loyalty just doesn’t pay in insurance.

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