Any marketing or management executive will tell you that customer intimacy is hard to gain and easy to lose.
Intimacy is created through trust and engagement, and it doesn’t just happen – it is gradually built over time with each and every interaction a customer has with the business.
It’s essentially the holy grail for financial advisers, super funds, banks and any service organisation that wants to grow – the closer you are to your customers, the better your ability to understand and respond to their needs, and the better you respond to their needs, the more likely you are to win their repeat business, gain positive word-of-mouth referrals and retain them as a long term customer.
By now, you’ll all have read about the Comminsure life insurance scandal that saw one of Australia’s biggest life insurers deny a trauma insurance claim on a technicality.
Commonwealth Bank’s CEO Ian Narev has been quick to point out that this is just one case, amid around 22,000 claims a year that the bank pays out.
This might be true, but regardless, it’s functionally irrelevant. That one poor, highly publicised customer experience is a hit to the trust bank – not just Comminsure’s trust bank, but every life insurance company that sells policies based on an unstated customer promise to pay out in their time of need.
Although technology has assisted companies in engaging customers through digital channels such as social media, websites and email, it serves as a double edged sword in times of crisis, with the potential for things to spiral out of control quickly.
A quick search for “Comminsure” on Facebook sees countless articles emerge – none of them positive. CBA’s own Facebook page doesn’t appear to acknowledge the stories, however many of the company’s posts have been hijacked by social media users posting links with negative media coverage, and some Twitter users attempting to launch the hashtag #boycottCBA.
As the story’s momentum built, it became clear that the trauma claim was just the tip of the iceburg with other consumers coming forward to share their stories and bemoan their treatment by the bank.
The bank’s response to the scandal was important; effective communication is not only critical in times of crisis, it’s also a key driver of engagement and trust, with trust constantly rated as a top driver of customer commitment in CoreData’s research.
CoreData’s Digital Intimacy Report 2016 found some 86.4% of Australians agreed that they tend to be more engaged and trust financial services providers who have effective and accessible channels of communication.
Consumers now range from prosaic in their digital usage and preferring traditional channels (offline preference) through to multiple-channel users with complex digital needs (online preference).
Interestingly, there is little differentiation among the different digital segments with regards to their propensity to feel more engaged and trusting of effective communicators.
Speaking following the controversy, Narev reportedly admitted that clients’ experiences are “just not good enough” and that the company had let them down.
Publically acknowledging there is a problem and taking responsibility for that is undoubtedly an important step to rebuilding consumer confidence, but once trust is lost, it’s hard to regain.
The life insurance companies – and Comminsure in particular – will have to work harder than ever to restore customer intimacy.