Usage Based Insurance (UBI) is changing the insurer-customer relationship. It’s providing a new strategy to leverage high volumes of behavioral data into segment-specific value propositions that deepen relationships with customers and build loyalty.
As UBI has taught us, behavioral data that’s generated from these devices can provide a multitude of marketing opportunities that build and enhance customer loyalty in industries beyond insurance. For example, Walgreen’s “Steps with Balance Rewards" Program uses a wireless-enabled device called the FitBitto to generate behavioral data and positively engage customers with the brand by rewarding them for staying active.
As marketers include more behavioral data to augment their transactional data, they’re quickly discovering additional customer engagement opportunities.
What does this mean for insurers? One unique opportunity to utilize telematics, or systems used in automobiles that combine wireless tracking with GPS tracking, is the ability to reward customers for good driving behavior and augment their premium with a loyalty/rewards program.
To use behavioral data effectively, insurers must improve their existing infrastructures and operational models to expand their loyalty and reward offerings. There’s no question that the challenge of working with large volumes of consumer information exists for carriers when it comes to data storage, data normalization and privacy concerns. But bringing data together with decision and optimization processes gives insurers greater visibility to build and maintain deep customer relationships.
Telematics data delivers on this relationship promise by:
Pulling together data and making it meaningful: With a layer of analytics, you can transform data to build personalized customer profiles.
Using behavioral data strategically: Targeted marketing campaigns, offers, and reward programs become more effective when based on individual profiles.
Giving customers something valuable: Customer service with real-time feedback is a critical component in loyalty.
Opening the lines of communication: The more insights you have about your customers, the more consistent and meaningful interactions you can have with them.
While using this information to discount insurance premiums remains a primary value proposition, marketers need to think outside the telematics box to extend their relationship with customers. Using specific behavioral data opens up a new marketing portal that stretches beyond traditional pricing to capture, transform and improve loyalty.
From identifying driving behavior to claims and real-time customer service to rewards programs, the UBI lifecycle can add a new dimension of data-driven loyalty.