Upfront and Transparent - The importance of trust in the customer experience.
In the last month I’ve gone through the task of renewing both my car and household insurance. It’s one of those tedious jobs that you know has to be done but the very thought of it fills you with dread. You want to get the best deal, but the thought of trawling through comparison sites or sitting in a call centre queue doesn’t sound like a great way to spend your Saturday morning.
So what is it that makes a huge proportion of us shop around, rather than simply take the renewal quote from our existing provider? And what more could insurance companies be doing to hold on to their existing customers and stop them from looking elsewhere?
For starters, wouldn’t it be great if insurance companies were more upfront and transparent? For example, when they send a renewal quote, how many of them detail what you (the customer) paid last year and explain the reason for any increase or decrease. Neither of the insurers I use included this detail on my recent renewals and in truth I can’t remember one that did!
As a result, the first thing I did was call them (and waited in a queue) so that I could understand how my 2017 quote compared with what I’d paid in 2016. As it turned out it was more! But why? I thought insurance was meant to go down the more years no claims you accumulate!
The reasons in both cases were vague and I’m still unclear. Through no fault of their own, the advisors I spoke to couldn’t answer what should be quite a simple question and one that they must be asked countless times a day . What they were able to do however was reduce my quote (as I was clearly unhappy) to a figure the same or similar to what I’d paid in 2016.
Here’s where I struggle. I should be happy – they reduced the price and according to comparison sites I am now on a good deal. But why put me through the hassle in the first place? As a customer experience it was poor. Instead of feeling happy, I feel as if they must think I’m stupid. If I hadn’t bothered to put a call into them, they’d have ‘got away’ with charging me a higher price. Would I recommend them – no, will I be loyal to them in the future – probably not. Does it improve my view of the industry, absolutely not!!
You would think in a business as competitive as insurance that companies would be looking to clearly differentiate themselves from their competitors by offering a customer experience that gives existing customers a valid reason to stay and not look elsewhere. Surely the cost of attracting new customers massively outweighs that of holding on to existing customers? And if they are relying on ripping their current customers off, what sort of sustainable business model is that?
If the insurers I was dealing with had been upfront and transparent in their renewal correspondence, if they had offered me the same deal as last year and explained the costs, if they had sold the benefits of remaining with them and had included comparisons from other insurers, I would find no need to write this blog. My customer experience would have been a good one, one that I’d happily recommend – and presumably the companies in question would save on customer service time speaking with confused customers.
So what can you take from this?
For the consumer - If insurance renewal notification has just dropped through your letter box, it might be worth your while to check out the details like me!
For the insurers – if you want to hold on to your existing customers and you don’t want us to shop around, be upfront and transparent with your quotes. Offer us the best possible price from the outset, give us a great customer experience and a reason to be loyal. And please – give us some credit – we’re not stupid!
Brands like Progressive in the US demonstrate the power of being transparent and putting purpose before short-term profit. When you place delivering value to your loyal customers as a priority, guess what? You end up as the market leader and highly profitable organization anyway.