5 Ways Insurance CRM Solutions Help to Curb Customer Churn

The benefits of improving relationships with an existing set of customers are much higher than from pursuing new prospective customers. 'Customer retention' should be a critical part of any insurance company's strategies, especially for those seriously interested in increasing bottom line revenues. With respect to the insurance industry, I'd like to highlight the concept of the Leaky Bucket. In the analogy between a bucket of water and an insurance company's clients, either case needs a consolidated structure so as to hold the content - neither can sustain their contents in presence of a hole or breach.

Below are a few stats advocating customer retention and indirectly endorsing customer servicing for your leaky bucket:
Losing customers to competitors
  • An increase in customer retention by 5% increases the business profits by at least 25% (Source: Gartner Group, 2003) 
  • The probability of selling to an existing customer is 60-70%, in comparison, there’s only a 5-20% probability that you will sell to a new prospect. (Source: Marketing Metrics) 
  • Just a 10% improvement in customer retention results in a 30% increase in the value of the company. (Source: Bain & Co.) 
  • 80% of your future profits will come from just 20% of your existing customers' resources. (Source: Gartner Group, 2003)
To effectively plug the hole in your leaky bucket, an effective CRM solution will ensure the following -

1. True customer view
It is said that a problem clearly stated is a problem half solved. A good CRM software helps you find a singly unified view of a customer - the entire history of your relationship from inception. This includes having a 360 degree view which gives a complete end-to-end illustration of the customer on a single platform. Besides, it always beneficial to have a strong client relationship, it increases word-of-mouth advocacy and often generates new leads.

2. Influence repeat sales
Ensuring a superlative customer experience through efficient customer service management inevitably leads to a long lasting positive perception that paves the path for fresh cross selling/ up selling opportunities.

3. Forecast customer needs
With a detailed view of all the service interactions, purchases, average expenditure and claims, anticipating the prospective offers that would entice the customer becomes easier and more accurate. CRM in insurance helps in data mining the relative information provided by customers to unwrap those products and premiums most significant to customers, thus thrilling them by introducing more relevant policies to match their requirements.

4. Pinpoint poor performers and unpopular products
CRM in insurance enables companies to carefully monitor the success of their business strategies by enforcing workflows and security for customer information. Products which customers continually complain about can be easily spotted through customized escalations and alerts. Also, managers have real-time updates for new sales and clear pipeline visibility for all deals in the pipeline. 

5. Adapt to changing customer expectations
Collating and viewing customer information is pointless without actionable intelligence - this valuable information should be leveraged to continually create better products through a clearer understanding of changing customer needs and expectations. CRM solutions enable users to slice-and-dice data for analyzing existing and prospective customers' relationships with their company and devise new means to increase customer satisfaction through all touch-points.

Insurance companies face intimidating challenges through continually changing regulations, litigation and competition, but, identifying potential bottlenecks and poor performers, ensures consistent growth in the mid and long term. In this decade, removing the complexities of finding new customers and instead focusing on servicing existing relationships is the key to staying ahead of competition in the long run. Future proof CRM in insurance is the silver lining to a decade packed with volatility and new generation products.