Why Insurers Should Become SMS Leaders
Insurers have often lamented their status as a “low-touch” business: That is, customers only engage with their carriers at acquisition/renewal and claim time. There’s a feeling that this puts a cap on relationship-building, and makes it easier for policyholders who have a negative experience at one of these two times to shop around.
However, one advantage to being a low- (or, let’s say, mid-) touch business for insurance is that messages are generally met with more urgency. I know for sure when I see a letter in the mail from my insurance carrier, I’m opening it first; my credit-card issuers’ constant appeals to me for a new card with a higher annual fee go straight into the bin.
The thing is, insurers may not need to interact with their customers frequently. But at the times when they do need to connect, there’s generally more urgency. That means messages from insurers cut through whatever channel they come through. It’s for that reason that I think insurers should broaden their use of text messaging, especially conversational texting.
Outgoing texts serve as alerts and customer acquisition efforts. They also can communicate crucial information to customers to preventing potential losses. For example, Liberty Mutual partnered with Accuweather to deliver text-message alerts to customers in the path of a hailstorm. By leveraging this initiative, Liberty Mutual effectively communicated the imminent danger of hailstorms, which can cause significant damage to cars and homes. Unlike other channels that rely on push notifications or email checks, texting ensures immediate delivery of critical information. Insurers should focus on using outgoing SMS for time-sensitive situations that are unlikely to lead to opt-outs, thereby maximizing its impact.
But I think real revolutionary change in customer interaction is with incoming texts from customers. Texting is the most commonly used communication platform today. According to a Celent poll, only 18% of insurers used SMS in the underwriting process, while up to 80% of customers expressed a desire to text their agent. By enabling customers to inquire about claims, request quotes, or seek policy updates via SMS, insurers can stand out among a cacophony of service providers that only leverage outgoing texts. Imagine if you could text an order to a restaurant! It’s amazing more industries aren’t trying this.
To fully harness the power of SMS, insurers must consider a few key factors:
Opt-in for Non-Urgent Messages: While SMS can be used to confirm autodrafts of premium payments or notify customers of policy expiration, it is crucial to obtain proactive opt-ins for these non-urgent messages. Applying a light touch and following up with other channels like email and postal mail can help strike the right balance.
Mobile-Friendly Call to Action: If a text message includes a call to action, such as completing a task or providing information, it should be easily achievable on a mobile phone. Broken links or poorly designed pages can lead to frustration and hinder customer engagement. It is essential to respond promptly to incoming texts and transition to other channels only when necessary, ensuring a seamless customer experience.
Metrics for Success: To measure the effectiveness of SMS initiatives, insurers should track metrics such as the growth of the channel, close rates for customers who leverage SMS, and opt-out rates. Monitoring these metrics helps identify areas for improvement and ensures controlled attrition.