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Customer Loyalty is the Ultimate Goal, Not Just Satisfaction

Money is tight. Everyone wants to feel as if they are getting the most out of every dollar spent.  While brand perception and trust are vital, many insurers have refined their customer satisfaction focus to now pursue and measure customer loyalty.

Like many other industries, the insurance industry is experiencing diminished returns on traditional advertising designed to improve brand loyalty and fuel business growth. Ads are no longer a reliable means of driving new business especially with younger, tech-savvy consumers. As a younger generation begins to make insurance purchasing decisions, it is vital for insurance agencies to harness technology in order to connect with customers and build brand loyalty.

Now more than ever, insurance providers are struggling to increase customer retention and are in need of some help. A recent study conducted by Satmetrix gathered the average customer loyalty of various industries and found that insurance was one of the lowest, with a customer loyalty rate of 23 percent. It is likely there is a correlation between this percentage and the lack of technology insurers have to utilize that would strengthen relationships with existing customers. Consumers are clearly expecting more from their insurance companies and increasingly desire a more personalized and proactive touch.

So how can technology help?

Michael Cantwell, Cisco’s Vertical Solutions Architect, Financial Services for the Americas,provided valuable insight in his recent blog titled: Satisfied Customers Aren’t Necessarily Loyal Customers. We live in a more connected world than ever before given the availability of the Internet and quick access to social media sites such as Twitter and Facebook. There is a shift towards a new form of ‘word of mouth’ with customers voicing opinions, complaints and service experiences in real-time, through social media sites.

Since mobile applications make it possible to interact nearly anywhere, anytime, insurance firms can leverage these applications to be more proactive and be an important part of their customer loyalty strategy. Social media can be utilized as a real channel to middle markets, necessary to gain direct customer insight and build trust through proactive engagement. Many customers prefer to obtain information and make purchasing decisions based on what they can see and interact with online. Customers want choices as to how they interact with insurance providers. Service and channel choice is helping to build customer loyalty and can now be the columns used to build a customer-centric distribution system.

Through a customer-centric distribution system, insurance leaders enable collaboration throughout the enterprise and distribution channels. A real-time collaboration architecture will help not only with sales and distribution, but also underwriting, servicing, claims and more.  Now, more than ever, insurance companies can be a click or touch-of-the screen away in those moments of truth. Imagine the possibilities of easy access to video-enabled customer care enhanced with Instant Messaging (IM), screen sharing and speech self-service that can convert normal insurance transactions to relationship-building interactions.

Recently, Cantwell presented Cisco’s position on collaboration in distribution to a group of insurance executives at the CIO Insurance Summit. Of the delegates in attendance, 94 percent found Cisco’s presentation “relevant to work they are actively engaged in” and of the 25 presentations given, Cisco’s was among the top three. As pointed out in  Cantwell’s presentation, there is very often a point at which a personal, face-to-face interaction is by far the most efficient way to complete a transaction.

Insurance companies face multiple challenges as they aim to significantly increase customer loyalty. However, the challenge is no longer what to do, but instead, how to incorporate a sustainable customer-centric infrastructure effectively to expand relationships with a more mobile and collaboration savvy set of customers.

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3 Comments.


  1. At last people are beginning to realise this piece of blinding obvious common sense. billions are wasted every year on advertising that could be much better used (and would cost much less) being spent on loyalty and retention. yes, technology is vital , but so is the human element: driven by mission and supported by the ‘go the extra inch’ process.

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    • As a senior agent driven by the needs and avoiding the price wars, this was refreshing. Business, simplified is meeting needs. I concur with your ‘human-element’ approach. That’s been lost in the “save 500 bucks with us, but we don’t know you”. My company has claims and service untouchable in the market. The agent over the phone should have no scripts, but rather the education in the product and willingness to be… Human. Nicely put Guy Arnold. I’d like your two cents on my approach. All yours for a read;

      http://insureyourmind.wordpress.net/

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  2. Hi ‘Colleen’, thank you so much for sahring such an informative post with us. Yes, people expect so much from their insurance companies, because they don’t know that every company have their own policies and conditions on which they pay their customers.
    http://frostinsurances.ie/services/selfbuild-insurance-ireland/

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