The balance between customer satisfaction and profit making often presents a delicate matrix that most enterprises must solve for business success. Yet some, like American insurance firm Lemonade, have quickly found the strategic sweet spot, where they gain tremendous business growth from making their customers feel cherished.
In just seven years, the online-only insurance company has grown to annual revenues of $ 128 million, a meteoric rise that has been largely attributed to its high customer-satisfaction rating.
In 2022, the firm ranked second in customer satisfaction among rental insurance providers in the US by data analytics company J.D. Power. It has been no. 1 in the previous two years.
So, what is this customer satisfaction magic bullet that Lemonade has discovered, and how can companies use it to transform their businesses?
Customer satisfaction is a measure of how people feel when they interact with your product, service, experience, and other representations of your brand. It fundamentally draws from customer experience, which is a real-time measure of the impression left on a customer at their most recent touch-point with a product or service.
Companies must always strive to give their customers an experience that will either make them buy more or come back – a great customer experience is inextricably linked to customer satisfaction, and almost always leads to more sales.
For players in the insurance sector, the goal is to have customers tell others about your brand, in a positive way, and to engage with your products longer. This kind of organic growth has been proven to drive long-term agency value, linked to a reduction in the cost of new customer acquisition, and an increase in life-time value for those that are signed up.
Important to note, however, is that customer experience and satisfaction is a journey that must be undertaken in slow and deliberate steps. You must strive to understand each one of your existing and potential customers in candid ways.
Data, thence, becomes a key component of this understanding, because by building data profiles, you get future leverage that allows you to tailor your products, services and messaging in ways that spark your target clientel’'s interest. Overall industry leadership can only be maintained by pre-empting customer needs and creating products that respond to those needs.
Flexibility, especially in terms of the willingness by companies to go back to the market and study the needs of their clients is critical in creating the data profiles that define the company’s direction in terms of product creation and marketing.
Another key determinant of success in business is the prudent use of technology and digital platforms to enhance a company’s customer experience. Automated self-service, prioritized callbacks, live-chats, and personalized recommendations are some of the tech-driven tools for a seamless customer experience, and which, if well implemented, can completely transform the organizational outlook.
The embedding of technology and digital solutions into business operations is especially critical now when 73 percent of millennials prefer to shop online - the number is even higher for Gen Z and Zoomers. Using artificial intelligence, companies can personalize services for such groups to high levels of accuracy.
Writer is the Group Head of Customer Experience for East Africa at Old Mutual Investment Group