Customer Engagement Lessons from Insurance and Emergency Roadside Service Industries

August 8, 2016 By Joseph Davis

As CX Solutions and Voice Crafter have shared our insights from our 2016 Benchmark Study of Customer Engagement, we have offered a definition of Customer Engagement (CE), tried to demonstrate why it matters, and looked at how some companies have achieved CE leadership in their industry.  Next, we wanted to take a deeper dive into how a customer touch point can impact customer engagement. 

As a reference point, we felt the Insurance industry would provide a very solid example.  Insurance, whether it is for an automobile, home, or any other material good, is a service that customers only use when something goes wrong.  Otherwise, the interaction between the customer and the business are limited unless insurance prices change dramatically.  Especially now with the ability to auto-pay bills, customers may not interact with a business for an entire year or more.  This can all change, however, when an accident occurs and a claim is filed.  So what happens to customer engagement when they go from minimal interaction to a new touch point?

In our study, we evaluated Customer Engagement for three insurance companies; USAA, State Farm, and Allstate.  When rating those companies, we also asked customers to indicate if they had filed a claim within the last 12 months and if they were satisfied with that experience.  We found that approximately 18% of customers had filed a claim.  Of those customers, 60.3% of them were Very Satisfied with their claims experience.

For the 82% of those customers who said they did not have a claim experience, Figure 1 displays how they rated each on Customer Engagement.

Figure 1. Customer Engagement with No Claims Experience

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With the remaining 16%, we split their Customer Engagement scores by whether they were Very Satisfied with their Claims experience or Less than Very Satisfied.  Figure 2 displays the Customer Engagement ratings.

Figure 2. Customer Engagement with Claims Experience

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As we reviewed the two charts above, one point became very clear: With no customer touch point, Customer Engagement levels are relatively similar among the three companies we evaluated (average among the three is 37%).  The key difference maker is whether customers are Very Satisfied with the claim experience or not.  If the claim experience is great, Customer Engagement is much higher than the industry average.  However, if handled poorly and company performance does not meet customer expectations, Customer Engagement (and most likely retention) falls below the average.

The key attribute we found that can differentiate a good claims experience from a poor one is the degree to which {BRAND] makes me feel like a valued/important customer.  For those customers that were Very Satisfied with the claims experience, about 64% feel like they were valued by the insurance company.  Conversely, only 54% of customers felt valued for if they were Less than Very Satisfied.

To validate this premise that a touch point can be so impactful on Customer Engagement, we looked at another industry similar to insurance that offers an often unused service: Emergency Roadside Service (ERS).  Looking at Customer Engagement for AAA, split by whether the customer had an ERS experience and if they were happy with that experience or not, we see a very similar trend to the insurance industry.

Figure 3. Customer Engagement with ERS

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By looking at both the Insurance and ERS industries, we can see how valuable a customer interaction or “touch” is in driving a customer’s engagement.  If a customer is made to feel valuable and s/he is happy with the service experience, Customer Engagement can be raised by about 10% or more.  Conversely, a bad experience can decrease Customer Engagement by about 10% or more.   

To put it simply, customer interactions are golden tickets to customer engagement success; they should never be squandered!

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