Insurance companies could be losing precious business by underutilising loyalty schemes to reward and retain existing customers, according to a new survey of over 2,500 UK consumers.
The research, carried out by The Grass Roots Group, revealed the vast majority of consumers were unaware of whether their home insurance (90 per cent) or motor insurance (89 per cent) providers offer customer loyalty programmes.
With more than half (55 per cent) of UK consumers rating loyalty schemes as important to them in their decision to stay with a provider, insurance companies are failing to capitalise on – and even risk losing – an already captive audience.
Supermarkets lead the way when it comes to rewarding customer loyalty with over half (52 per cent) of those surveyed being part of a scheme and reaping the benefits. This is reflected by the fact that supermarkets were seen by respondents as the provider that makes the most effort to retain them as a customer. Across insurance providers, home insurance companies were considered to make the least effort to keep existing customers happy.
Commenting on the research, Ian Horsham, divisional director, promotions and incentives at The Grass Roots Group said: “Our research has shown the power of loyalty schemes in retaining customers, but it is clear that not all industries are using them to their advantage by communicating their benefits effectively. Supermarkets and health and beauty retailers are using points schemes as part of their customer loyalty strategy with great success. However other industries still focus too much on attracting new business – some providers will scream about special offers and rates for new customers, while loyalty schemes for existing ones are either non-existent or hidden away in the form of cash back within terms and conditions.
“Loyalty schemes are no longer the domain of supermarkets and mobile phone providers. Marketers in other industries could learn a lot from the success of these schemes to customers.“ he adds.
The research was carried out in June 2014 and surveyed 2,610 UK consumers about their relationships and loyalty towards the following suppliers: phone and broadband; utilities; insurance; banks; supermarkets; and car manufacturers.