Best Practice Alert! Reduced Effort can Lead to Increased Customer Retention in Insurance.
I recently read an article from the Tower Group, Winning in Contact Center Technology, which centered on the main idea that contact centers can improve the customer experience by reducing customer effort. Certainly an intriguing idea, especially since traditional contact centers are all about finding ways to reduce something–reduce average handle time, reduce abandonment rate, reduce idle time, etc. So why not look beyond reductions in the call center?
There are a couple of ways to reduce customer effort:
1. Proactive Outreach
Reach out to customers that have had a poor experience. Insurance companies must determine what the leading indicators are for defection and reach out to those customers before they become disloyal. This can be done through technologies such as customer feedback surveys and speech analytics. Of members surveyed, 56% were not reaching out proactively. By reaching out proactively, you can ultimately reduce your customer’s effort by avoiding the repeat calls from an upset customer.
2. Mitigate customer disloyalty
In a survey by the Customer Contact Council, it was found that customers who have received poor customer service are 4 times more likely to become disloyal, and that 96% of customers attributed their disloyalty to a high-effort experience with a service organization.
How many times have you had a bad customer service experience and the first thought after hanging up the phone is: “I don’t know why I even do business with these guys!” I just went through a horrible experience with an airline company that had given me “free” vouchers to fly due to an overbooked flight. After 4 phone calls, being escalated to 3 different levels of customer service, over 2 hours of my time, and a trip to the airport to eventually book my tickets with a “live” airline agent, I was ready to turn in my loyalty card and my frequent flier miles, and never fly this airline again.
Are any of you capturing any of the leading indicators for customer disloyalty, such as retention metrics, negative comments captured through speech analytics, customer surveys, social media sites, etc? How are you gathering the data and what are your findings? I would be interested in learning if they are similar across various vertical markets, or if there are specific identifiers that are unique to the insurance industry.
In my next post, I will outline some best practices for reducing customer effort. Thanks for reading!
Insurance Strategic Consultant