Remarkably, the insurance sector is one of the major players in defining the health of any economy. This leads to immense competition among the insurance companies to attract customers and diversify their services. Most importantly, in order to keep up with the competition, insurance companies need to focus intensely on what drives a customer’s behavior patterns. They are constantly working to improve their services by adapting to market innovations at lightning speeds and becoming customer-oriented rather than profit-oriented.
Some of the major factors that influence customer behavior and choice of insurance include:
1. Demographics and Customer Behavior
Gender, age, and stage of life influence purchase decisions significantly. Men and women need and buy different products. While men in most households manage insurance, women are taking an increasingly active role in purchase decisions. Shopping differences between men and women seem to be changing rapidly. Therefore, it is imperative that the insurance companies appeal to all genders in their advertising efforts to attract and retain customers by taking note of customer’s behavior patterns.
2. Proximity and convenience
When you have to drive 100 miles to get to your closest insurance branch location, we know it is not a good business model. No matter how trivial this seems, it plays a major role in dictating a customer’s behavior pattern and decision to stick with a particular insurance company. Having a convenient branch location, easy parking space, and the number of branches across the globe influence a consumer’s decision of buying from the company and staying with it.
3. Technology adaptation
Consumers are relying more on technology with its effects being felt in every aspect of their decision-making from where to shop, to what to buy, and how to pay. Any insurance company that pays attention to these customer behavior patterns by adapting to technology and use of modern equipment radically changes a customer’s shopping experience and speaks volumes about a company’s effort to stay up-to-date and provide the most efficient and timely services to its customers.
With the convenience of access comes the risks of security. In the past, the merchants knew their customers personally, which made identity theft very difficult. With the shift to technology, authentication has become important to protect against hackers. Making the customers feel that their information and data are safe is a top priority and greatly influence a customer’s behavior pattern in decision-making. It befalls on the insurance company to convey and convince the customer about the safety measures they have in place. Security and data breaches always remain a significant threat to technology adaptation.
Reputation is an overall estimation of a company’s current behavior and estimated future behavior. Any insurance company’s reputation is very important in dictating a customer’s behavior and attracting customers. An insurance company that is constantly in the news for negative publicity attracts very few customers. Insurance companies can more easily achieve their goals and objectives if they have a good reputation among stakeholders. No organization can control its own reputation completely. It can only operate in a way that communicates this to the stakeholders and/or consumers to influence customer behaviors. Components that factor-in include ethical outlook, workplace, financial transparency, leadership and management style, social responsibility, customer focus, quality upkeep, reliability, and emotional appeal.
According to Identity Theft Resource Center, there have been 7,689 data breaches involving 900,315,392 records from June 2005 to June 2017
6. Situational factors
As with any product purchase, situational influences affect how insurance customers behave. For instance, if a customer purchases a car over the weekend and needs immediate insurance before they drive the car out of the lot, they are most likely to go with the instantly available choice. This is the case even though they think it is not the best offer for them because the risk of driving without any insurance outweighs the risk of paying a few extra bucks. Situational factors are influenced by several elements including physical factors, social factors, reasons for purchase and a customer’s behavior patterns and mood. Physical factors such as a store’s design and layout play a major role. If a customer has difficulty finding his or her way to the product they need, they are less likely to buy it. Improving their situational factors will most likely gain the customer’s trust in the insurance company and keep them coming back.
No matter where and how you buy your insurance products, taking advantage of the free insurance management websites like InsuredMine will greatly enhance your insurance management experience. With an easy registration process, you can have a complete digital overview of all your insurance policies, information about your coverage, your premium amounts and payment due dates all under one roof in a simple dashboard. You can also set up reminders for your payment due dates, and the best part is, all this is free!
Yes, we believe in the power of technology to transform the way you manage your multiple insurances. Try us for free and let us know why you agree with us!