This is especially true for the health insurance Business.
Besides enabling the above, growth allows better management of risks, reduction in cost per member and lower premiums. No surprise, health insurance companies obsess about it.
As a Marketing leader, you invest tons of time, money and effort in acquisition of new members to drive growth.
But Gartner research suggests retention should outweigh acquisition — 80% of your company’s future revenue will come from just 20% of your existing customers.
Further research from Bain indicates the following: Increasing customer retention rates by 5% increases profits by 25% to 95%.
This is why I suggest you need to start focusing on retention as a way to grow. In fact, when done right, retention can drive growth at scale by attracting new members through word of mouth and referrals.
Satisfied customers tell 9 people about their positive experience, while dissatisfied customers are likely to tell 22 people about their negative experience, a study says.
Switching insurers is easier than ever in this digital era. Members switch if they feel you are indifferent to their needs. They want to know you care and that you will not take their loyalty for granted.
You can do this by prioritization of your retention efforts.
But is that the case at your organization? Or does retention take a backseat to acquisition?
If it does, you are not alone. Here’s how you should change that.
Secure executive buy-in first
There’s a reason why retention takes a backseat. Retention is about building loyalty, which can be time-consuming and difficult to measure. Contrast this with acquisition. Impact is almost directly correlated with acquisition campaigns and is easy to measure (e.g., # of new members per week).
How do you get buy-in for something that is hard to quantify and takes time to kick-in?
Quantify the value of retention. Tie it to long-term profitability and better ROI. Communicate these value-based insights to the executives.
Establish clear retention goals
Because retention typically has not been a priority, its goals are often ambiguous or non-existent.
Here’s how you fix this. Ask yourself: What is your actual retention rate? Desired rate? Their difference could be your goal. If that is too aggressive, you can go for a conservative number. The idea is to be clear and specific, not perfect.
Next, identify KPI targets to measure the retention success. These goals and KPIs will serve as the bedrock of your retention strategy and make it more actionable.
Transition to an “always-on” personalized member experience
In the health insurance industry, the majority of insurers use the old method of brand communication. It goes something like this: brands decide who to communicate with, when and how.
To do this, they develop retention campaigns that reach out to members on pre-determined calendar dates, through pre-defined channels and with set messages and offers.
What they do not realize is this: since brands do not control the message anymore and consumers do, this old method is ineffective. Brand-centric messaging translates to campaigns that are generic, impersonal and forced.
An undifferentiated and unremarkable member experience.
Unmet member expectations and needs.
Unhappy member now exploring other options.
Members want to feel special. They feel special when their experience is personal. Their experience is personal when they feel the insurer already knows what they want.
For example, let’s consider a member who is experiencing the following pain point: delay in claims processing. When this member gets on a call from your call center representative, they expect the representative to be aware of the pain point and to provide an update or a solution. Not a set of questions asking what their pain points are and how the representative can help – something that happens now.
How can you fix this?
Listen to the cues members are giving you about their expectations and needs and use those cues to fuel every member interaction with personalized content on every channel. This will make them feel special and want to become your brand advocates.
Start small by strategic prioritization before building to scale
Building out an always-on omnichannel retention program looks great on paper. However, building such a program to scale is a huge undertaking. We are talking about personalizing the experience of all members. Engaging in one or more member journeys at a time. Initiating multiple interactions with you across each journey. Across multiple touch points. And channels.
The scale at which these interactions are taking place is mind-blowing. Do not wait to build this out to scale.
Start small and prioritize.
Prioritize personalization of experience of certain member segments. This could also be your members with low plan utilization or high-risk members with chronic conditions and high costs. Be proactive in engaging with them to better track and manage their care.
Prioritize personalization of experience on commonly-used channels. Typically, Website and telephone are the most used channels. Perhaps start by personalizing member webpages or optimizing the Website for mobile. You could also introduce mobile health applications to engage your member base.
Prioritize technology stack that will provide the strongest return on investment. Consider deploying a suite of technologies that make the strongest impact to your Business. Here are a few examples: Customer Relationship Management (CRM), Data Management Platform (DMP), or Content Management System (CMS).