Cited as one of the major challenges of the insurance industry in 2014, improving customer experience is… hard. Or, at least, that’s the nice way to say it. Customer experience initiatives in big business in general are hard to execute just because, with millions of clients, personalized correspondence and relationship maintenance run counter to your teams’ abilities to remain efficient.
Even still, strategies abound, and dozens of enormous companies—insurance and otherwise—manage to create satisfactory or even excellent customer service initiatives. Just look at Amazon. Arguably the largest retailer in the US, any time something goes wrong (which, if my life is any indication, it sometimes does), Amazon is still able to provide responsive, thoughtful web support experiences.
I guess what I’m trying to say is that it can be done.
And there’s a good chance that you’re already doing it, that you have excellent initiatives in place but, for some reason or another, it’s still not going quite the way you’d imagined. But I’m here to tell you the reason (assuming that your initiatives are not, in fact, garbage J ): contact decay.
What is Contact Decay?
Put simply, contact decay is just that: decaying contacts. And your CRM is full of them. Recent research states that, on average, contacts decay at a rate of 30% per year (which people changing jobs, phones, email addresses, etc.) and that about a third of the customer contact data in your CRM, right now, is worthless.
Pretty unnerving, right?
When you think about how you actually interact with your customers (and no, I’m not talking about paper bills or direct mail marketing that gets paid and tossed in the trash, respectively) the number of channels you have access to, the ways you can actually get in touch with them are limited to phone, email, and… that’s about it.
And since we live in a culture that really is all about personalizing experiences to stand out from competitors, being able to reach your customers, to engage them human-to-human is vital.
So, do the math. If you can’t reach one-third of your customers (unless they call in, dealing with a major, insurance-necessitating issue) to try out your new customer experience initiative, what happens to your:
- Customer referral and satisfaction rates
- Customer acquisition and retention rates
- Customer churn
By my calculations, you should expect to see a, roughly, 33% negative trend arise from each.
Fighting Contact Decay
It’s an unfortunate reality that everything we do at work—customer experience initiatives for example—is dependent on the accuracy and correctness of everything else. Choosing not to fight contact decay in your CRM effectively handicaps strategies put in place to improve customer experience, and creates unnecessary waste across the board.
Put another way, you’ve already invested the time, effort, and money into developing a really sound customer experience plan. Is losing access to a third of those customers a year something you can afford?