It's Good to Talk

By Alan Waddington

Remember MySpace? Back in the mid-2000s it was considered the coolest social media network. At its peak it had almost 76 million unique users and helped launch the careers of acts like the Arctic Monkeys and Lily Allen. So, what went wrong? News Corporation, who bought MySpace in 2005, chose to concentrate on driving ad revenue rather than continuing to put their customer first. They stood still not understanding what users wanted, reacting to growing competition from Facebook or investing in innovation.

News Corporation forgot about their customers. They assumed they had a captive audience that would remain loyal to MySpace, continuing to use their site no matter what.

Now our industry is a little different to the world of social media, but the MySpace story highlights how important it is to have an ongoing dialogue with customers and making sure you’re providing them with a product they value.

While social media platforms have numerous opportunities to connect with their users, observe their behaviour and canvas their opinions, we in the protection industry have limited opportunities to gather this valuable information. As an intermediated industry, we also must be mindful of the customers’ relationship with their adviser and work in harmony with them to further the conversation. This being the case, doesn’t it make sense to make the most of every chance we get?

Outside claims, annual reviews are the best opportunity we have to connect with our customers, to make sure we are providing the cover they need and address any concerns. It’s amazing to me that so many still aren’t taking advantage of it. Why are they ignoring the chance to have meaningful, useful conversations, especially in light of Consumer Duty?

A big reason is fear. Fear that if they remind customers that they’re paying for cover they’d forgotten they had they will cancel. They believe it is better to “let sleeping dogs lie”, preferring to go under the radar and hoping to retain customers by stealth.

This approach is a mistake on several levels. Firstly, a lot can happen in 12 months. Changes in job, home or personal circumstances will have an impact on their cover and should be known. Missing the opportunity to have this discussion means customers run the risk of their cover being unsuitable, insufficient, or worse, invalid.

If they do come to claim and their cover does not reflect their current circumstances, it creates huge issues. It doesn’t just mean the customer misses out financially, which can have potential devastating consequences, it damages their trust in the industry, fuelling the perception that insurers are looking for any reason not to pay.

Secondly, it wrongly assumes that customers don’t value their protection and are just looking for a reason to cancel. If cover has been sold correctly, fully discussed with a knowledgeable adviser, they will appreciate the role it plays and its potential value. Being given the opportunity to update their details and remind them that they have proactively secured their financial future should be something to be celebrated, not feared.

Thirdly, the annual statement provides a fantastic opportunity to highlight all the benefits and perks that add value to a protection policy. We spend a lot of time sourcing these additional services, it only makes sense to take every chance to promote them. Over the last three years, we at Cirencester have used our annual statements differently, focusing on the benefits that customers can access and celebrating their decision to take out cover to protect their finances, their lives and their families. This approach has actually seen a reduction in the number of cancellations we’ve received.

This shows that treating customers as intelligent adults, who have made a conscious decision to buy protection and want to know about their policy and what it gives them is the right approach and something that we should be encouraging to the standard. If we are to avoid becoming the pitfalls that MySpace fell into, we must make it a priority to engage with customers whenever we can to ensure we continue to meet their requirements with a policy that is both relevant and valuable to them.