Holding On: How Health Insurers Can Improve Customer Retention and Loyalty

Statistics vary by industry but the conventional marketing wisdom is that attracting a new customer can cost about 7 times as much as holding on to an existing one. When you account for the cost of the acquisition marketing itself, coupled with onboarding expenses and the incentives typically offered to new customers, it’s easy to see how the costs add up. The spread may be even wider between your longest term customers and the newly acquired ones. With more and more health insurance options coming on the market, insurers need to come up with strategies for holding on to their customer base.

discussion Customer Service: The First Line of Defense

In this age of social media and online reviews, one bad customer service experience can have major repercussions for the bottom line in any industry. While health insurers are typically active in monitoring and responding to complaints posted on social media, many have been less successful in addressing the root causes for those posts.

According to a survey by Accenture Healthcare, 41% of respondents who’d had a bad experience with their health insurer’s customer service department told friends, family, or coworkers about the problem; 7% posted about it online.

According to the same survey, customers reported several areas of frustration with their insurer:

  • 30% – having to call multiple times for the same issue.
  • 28% – who couldn’t answer their questions (35% said they had to repeat the same information to multiple reps before finding help.)
  • 38% – long hold times when they tried to contact customer service.
  • 17% – rude or unfriendly customer service reps.

Customer service is even more important to customers than prices; only 6% of people surveyed said that they’d be willing to give up some level of customer service in exchange for a lower price.

Keep the Conversation Going

Customers continue to pay health premiums in between those events that cause them to use health services. Communications are the only way to cost-effectively demonstrate value throughout the customer lifecycle. Health insurers need to create personalized communications programs that include multiple touch points monthly such as a useful statement of the value of services used (not the typical impenetrable Explanation of Benefits), wellness messaging, information about new options in their provider network and the occasional “thank you for being a customer.”

Creating a master plan to educate, inform and motivate your customers will allow this program to be conducted on auto-pilot using the data generated from normal customer interactions. The plan needs to consider both the outbound communications that are triggered by you and opportunities for interaction by the customer along with the ability to respond effectively when the customer initiates communications on their own. Include opportunities to solicit feedback from customers such as satisfaction surveys, links to online suggestion boxes and invitations to engage through social media in a positive way (Like!). There is no better way to beat the haters online than to have some customers who love you take the time to post.

Addressing your customer service issues will encourage more customers to stay with you. Communicating effectively with customers on a regular basis may eliminate customer service issues before they can happen, driving down call volumes and putting you well ahead of your competition.

Elizabeth Gooding

Elizabeth Gooding is the editor of the Insight Forums blog and president of Gooding Communications Group

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