The insurance industry is notoriously driven by price, with consumers rarely considering features and benefits when making purchasing decisions. While cost management requires relentless focus, you can only achieve revenue stability by reducing churn and retaining the customers you have. When it comes to loyalty marketing for insurance companies, the challenge is to foster long-term relationships and attract new customers while retaining value for your company. The most effective tactic for gaining a competitive advantage without stripping away all profit is to engage with clients via loyalty marketing.
Here we share why and how insurance companies should introduce loyalty marketing and rewards programs.
Customer Loyalty Rewards Expand Revenues
Customer loyalty rewards can not only encourage repeat purchases but entice first-time purchases from new consumers. These consumers often know your brand, but as yet, have not taken the first steps to purchase insurance with your firm.
Low-Expenditure Insurance Marketing
You can invest heavily in your loyalty program, but rewards do not need to be expensive to achieve their goal. Careful expenditure management will keep marketing costs down, and driving loyalty through rewards programs have lower associated costs than new customer acquisition.
A Harvard Business Review, Do Rewards Really Create Loyalty, sets out a golden rule; the value to your business must exceed the value delivered to customers. But what does this mean? In the real world, your loyalty marketing should steer clear of one-time high-cost promotions and instead focus on your long-term business goals and creating customers that are sustainably loyal.
Increase Brand Awareness For Marketing Insurance
While the first goal of your loyalty program is to retain your current policyholders and ensure renewal continuity, expanding brand awareness is a supplementary goal that offers tangible results. You can drive brand awareness by encouraging and rewarding desirable behaviours. A reward that a customer values will undoubtedly lead to them talking about it. When this occurs, you raise the desirability of your brand and create a customer acquisition pull.
According to a recent brand loyalty study, 59% of loyal consumers are more than willing to refer a brand to their friends and family. Additionally, 36% are willing to spend more with brands they feel loyal to.
Capture Market Research Data With Loyalty Marketing
Loyalty marketing allows your insurance company to learn more about its clients and customers. Insights you can gain include what triggers them to purchase, the rewards they value, and what rewards align with their beliefs or passion.
Increasing your knowledge of what influences your market and customers will enable you to personalise your insurance marketing approach. You can demonstrate that you understand their needs and have aligned your company’s values with theirs. It is vital to regularly engage with customers because it is harder to keep a customer you only communicate with when renewal time comes around.
Loyalty Marketing For Insurance Companies Persuades Consumers To Make Larger Purchases
Customers motivated to earn a discount or giveaway entry will often purchase more, adding products to a small purchase or upgrading their purchase to a higher level of insurance cover. 36% of loyal customers are willing to spend more on a product, even when a cheaper option exists elsewhere.
Parameter Setting And Automating Flexible Insurance Rewards
It is vital that loyalty rewards align with your specific product type or customer interest. In the insurance space, rewards with broad appeal and a longevity factor will offer the strongest brand recall and engender a far more prosperous outcome. You may also need to consider partnering with other brands by way of a third-party to leverage a more cost-effective investment into your loyalty programme.
When planning the parameters for your loyalty marketing, you should ask:
- Will clients value the loyalty program? – Five factors that influence customers include cash value, relevance, convenience, aspirational value, and redemption choices.
- Can your competitors offer a more desirable alternative? – You may require a partnership to create a more competitive reward program that retains high-value clients. The reward program needs to deliver on all five influencing factors.
Once a loyalty rewards system is implemented and you set appropriate parameters, you can leave it to run itself and set the triggers for different reward grades.
The insurance industry is lagging behind other business sectors, with many insurers, agents, and brokers yet to leverage loyalty rewards programs.
However, there is an upward trend of insurance providers steering consumers towards preferred behaviours by leveraging loyalty marketing and rewards programs. With stiff competition and a cost-sensitive customer base, insurance firms increasingly need to adapt to stay competitive and secure revenues. Loyalty marketing and rewards programs can help you meet your businesses goals, and there are many opportunities to be first and offer something unique.
For a free consultation about loyalty marketing for your insurance company, Jamie Fisher (Chief Commercial Officer – The Super Marketing Group) can offer advice and options – please click here.