Brisbane consulting firm Engaged Strategy today released findings from their annual Consumer Recommendation and Loyalty Study for the motor insurance sector announcing the motor insurers most likely to impress their customers.
With a Net Promoter Score of 14 per cent, YOUI Motor Insurance customers are far more likely to recommend them to friends and colleagues. This is a great achievement for a relatively new player in the competitive motor insurance industry. Further illustrating the competitive nature of the industry, their closest competitor, with a score of 12 per cent, was the previous loyalty leader APIA.
Engaged Strategy CEO Christopher Roberts said that Net Promoter Score is widely recognised by the world’s leading organisations because it is one of the most accurate measures of customer advocacy. It’s more robust than mere satisfaction, and importantly is a proven predictor of business growth.
“This year’s research shows 19 per cent of motor insurance sales are primarily sourced via recommendations from peers, making word of mouth a critical marketing channel in this category”
“Organisations need to ensure they offer an end-to end positive experience, as every single negative comment made about a motor insurer requires around four to five other positive comments to negate the damage it causes,” Mr Roberts said.
In the motor insurance category the Australian category average only reached a score of a -8 per cent which pales in comparison to the +41 per cent achieved by the US, 8 per cent by UK, 4 per cent by France, and -4 per cent by Germany.
A company’s Net Promoter Score or NPS is based on customers’ likelihood to recommend the company’s product or service.
“In these times if you want to drive growth via loyalty and recommendation it is not enough to aim for mere customer satisfaction you need to develop experiences and propositions that are worthy of recommendation” ,Mr Roberts said
And just in case you thought the importance of word of mouth had lost its edge, according to the Engaged Strategy study, recommendations from friends or family still has the greatest influence on purchase decisions by a mile with a staggering 51.9% of consumers choosing word of mouth as the greatest influence on their purchase decision in comparison to other marketing mediums.
“There has never been a more critical time to go back to basics and focus on the customer as opposed to the more common and much less effective strategy of cost-cutting. The continued strong utilisation of social media injects an additional element of urgency,” he said.
In the study 2,640 motor insurance were invited to rate their experiences. Results identified consumer likelihood to recommend a brand to others. Ten of the biggest motor vehicle insurers in Australia were assessed in the innovative study, including the loyalty leader YOUI as well as AAMI, Allianz, APIA, Budget Direct, GIO, NRMA, RACQ, RACV and Suncorp.
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 2013 Benchmarking Study is available from Engaged Strategy at www.engagedstrategy.com.au