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How Community Can Benefit The Insurance Industry In The Impending Recession
The last three years have been tumultuous for all businesses; however, the insurance industry has weathered the pandemic storm with grace and flexibility. Many insurance companies improved their systems and capabilities with new technology, allowing them to avoid significant casualties during COVID-19 shutdowns. The seismic shift in business operations truly benefited the industry and capitulated its (much-needed) digital transformation.
The unprecedented times, however, are not over; they are simply changing. Rising inflation, high-interest rates, and the impending recession threaten to un-do this momentum. Community-building efforts offer a sustainable solution for insurers to expand on pandemic gains while focusing on customer-centricity. Let’s take a closer look.
How Community Can Benefit The Insurance Industry During A Recession
Community building is the process of connecting with people in your local community to promote your products and services. It’s a way to build relationships with people who are interested in what you have to offer.
Insurance companies have long been neglected in the community-building space. Their products are often difficult to explain, and they generally lack the sex appeal of other industries. The insurance industry is also a highly regulated one, which could make it difficult for insurers to engage with their customers in unique ways.
But there’s no denying that community building is essential for any business and that it can be used as an effective tool for growing your business — especially in uncertain economic times. Here are some benefits insurers can experience by building meaningful community connections.
Customer Loyalty And Retention
With the rise of technology and social media, many insurance companies have neglected their community-building efforts. This is unfortunate because insurance companies have long been able to build trust with their customers through relationships and partnerships with other organizations in the community.
Insurers that focus on community building create customer trust, loyalty, and advocacy. By hosting local events, they offer opportunities for customers to share their ideas, experiences, and opinions in a way that isn’t possible online, leading to better products and services. An insurance company may also find hosting community events offers them the opportunity to craft personalized insurance packages that meet the needs of local residents. A community presence, relationship building, and custom offerings are powerful ways for insurance companies to cement customer loyalty and retention.
Increased Word-Of-Mouth Marketing
Hosting community events, offering personalized insurance products, and supporting local organizations create raving fans amongst insurance customers. When customers are happy with a product or service, they become brand advocates, telling anyone and everyone about your company.
This free “word-of-mouth” marketing is more beneficial to your bottom line than any marketing campaign. In fact, word-of-mouth drives $6 trillion in annual global spending and results in five times more sales than digital advertising alone.
Opportunities For Collaboration And Partnerships
Connecting with other businesses in your community gives you more opportunities to develop relationships with people who may need or recommend your insurance company down the road.
For example, if another business owner needs workers’ compensation insurance, they might come to you first because you’ve established yourself as a trustworthy community member.
Examples Of Insurance Companies That Have Successfully Leveraged Communities
A major insurer, Progressive has integrated community building into its company culture. In addition to financial contributions, Progressive encourages its employees to give back to their communities through volunteerism and other charitable efforts.
Horace Mann is an insurance company exclusively for those that work in education. The niche insurer provides more than just insurance; they also invest heavily in local communities by offering discounted school supplies, educator programs, and workshops.
Finally, Farmers Insurance, with its Rebuild Initiative, helps local communities rebuild homes damaged or destroyed by natural disasters.
Tips For Insurance Companies To Build And Strengthen Community Ties
Here are some tips for companies to build and strengthen community ties:
- Host community events and workshops. If you have space available at your office, consider hosting meetups or other small-scale events for local professionals. You can also offer to host workshops that educate people on business insurance topics. These types of events will help you establish yourself as a resource within the community.
- Support local causes. Showing your support for local causes in your community helps those who need it most and builds goodwill among customers, vendors, and other partners. Many companies already do this through donations or sponsorships of charitable events. Still, different ways to support local organizations may be worth considering, like having employees volunteer to build homes for those in need or make food at a homeless shelter.
- Offer personalized services. Customized products or services tailored specifically for your target market—for example, free business or earthquake insurance consultations—show that you’re invested in helping your customers succeed instead of just trying to sell something.
Community involvement is an excellent way for insurance businesses to strengthen their ties with customers, employees, and other stakeholders. It can also be a boon for their bottom line thanks to increased customer retention and loyalty, increased word-of-mouth marketing, and community partnerships. While insurers have much to gain from community building, they must also be willing to do the work. This means investing time and resources.
In addition to community-building efforts, insurance companies must collect agile market data to stay ahead during the impending recession. Insurance companies need to understand what drives their customer’s decision-making process, what obstacles they face, and how they can make their products easier for people to understand and purchase.
Learn more about market research by reading our latest blog, Market Research For The Insurance Industry.