Brisbane consulting firm Engaged Strategy today released findings from its 2010 Benchmarking survey outlining customer experience outcomes for the insurance industry, specifically focusing on the motor and property insurance categories.
With a Net Promoter Score of 8%, APIA Motor Insurance customers are far more likely to recommend them to friends and colleagues, and significantly outperformed rivals such as NRMA, Allianz and CGU in the customer experience stakes. Amazingly, APIA also won in the Property Insurance category with a Net Promoter Score of 5% and again showing their major rivals how to ensure their customers are advocates.
Engaged Strategy Founder and CEO Chris Roberts said the research also demonstrates the massive impact negative comments can have on an organisation.
“Our research shows that for every one negative comment made about a particular motor or property insurance company, it takes around five positive referrals to negate that damage,” Mr Roberts said.
1,589 motor insurance policy owners and 1,489 property insurance policy owners were invited to rate their experiences and insurance companies were ranked using the highly regarded Net Promoter Score which measures the likelihood to recommend. Nine of the biggest motor vehicle and property insurers in Australia were assessed in the innovative survey, including the dual loyalty leader APIA as well as RACV, RACQ, AAMI, Allianz, Suncorp, NRMA, CGU and GIO.
It seems that Australian motor insurers in general may have a lot to learn from their US counterparts in providing great customer experiences with the Australian category average a disappointing -18% compared to an impressive category average of 33% in the US. It was the same story for the property insurance category with the Australian category average an unfortunate-22% when compared to 27% for US counterparts.
All motor and property insurance companies surveyed, except APIA, achieved negative scores based on their customers’ experience, with a number of companies achieving scores in the -20% to -35% range, a stark contrast when compared to APIA’s result.
“Net Promoter Score is widely recognised by the world’s leading organisations as one of the most accurate measures of customer loyalty and importantly is a proven predictor of business growth,” Mr Roberts said.
A company’s Net Promoter Score or NPS is based on customers’ likelihood to recommend the company’s product or service on a zero-to-ten point scale. NPS is calculated as the percentage of customers who are Promoters, rating the company 9 or 10, minus the percentage who are Detractors, rating 6 or lower.
“Based on the scores achieved, it seems certain that many Australian insurance companies have huge potential to grow simply by focusing on improving their customer experiences and value propositions. In the highly competitive insurance industry, achieving a positive customer experience, first time, is more important than ever”.
“There has never been a more critical time to go back to basics and focus on the customer. The continued strong utilisation of social media injects an additional element of urgency because everyone knows word of mouth is the most effective marketing channel available to customers,” he said.
And just in case you thought the importance of word of mouth had lost its edge, according to the Engaged Strategy survey, recommendations from friends or family still has the greatest influence on purchase decisions by a mile with a staggering 45% of consumers choosing word of mouth as the greatest influence on their purchase decision in comparison to other marketing mediums.
|Motor Insurance||Property Insurance|
|Category Average||-18%||Category Average||-22%|
Engaged Strategy is a business consultancy focused on helping businesses grow by developing fresh customer, marketing and organisational strategies. Engaged Strategy is an approved Net Promoter Score® Loyalty Partner. Chris Roberts is an Industry Fellow at the University of Queensland, Australia. The full <strong>2010 Benchmarking Study</strong> is available from Engaged Strategy.
Net Promoter, NPS and <a href=”https://www.engagedstrategy.com.au/results/net-promoter-score/”>Net Promoter Score</a> are registered trademarks of Satmetrix Systems Inc., Bain & Company and Fred Reichheld