Just last week, my medical insurance policy got renewed in the grace period due to the self-inflicted blocking of high-value credit cards. The service provider chased me sincerely, using every possible channel to ensure continuity. Which led me to think, proven by anecdotes and data, about the enormous challenges in renewing B2C contracts, from serious insurance policies to the multiple lifestyle memberships. A matter not given due public scrutiny, due to the inordinate focus on first-time acquisitions in categories with usually-low penetration.
To understand why Indians are wary about renewing service relationships, we must review our traditional and emerging perception of value, largely unchanged. The famed Maruti Suzuki advertisement ‘Kitna Deta Hai’ captured this sentiment beautifully, applicable for both billionaire and his retinue. Which, in an irrational sense, gets carried over to even a term insurance or medical insurance policy, the fact that he is still alive or has not had an accident prompting a reckless discontinuity in year two or three. Prompted, usually by pressing liquidity priorities, he believes, in a delusional sense, that the money spent in past years is unduly wasted. Interestingly, this behaviour is replicated for top-end lifestyle experiences, social club memberships, credit cards, Zomato Gold or Priority Pass. In case value is not extracted, as a perception most certainly, renewal will be uncertain, whatever be the original provocation.
What brands do need therefore is an Integrated Branding Strategy for continuity, not just a service-level protocol for renewal. The fullest power of the brand, in terms of purpose and emotion, unleashed not just for primary acquisition but equally for sustainable association. Quite simply, two kinds of customer-centric strategies must exist, the first category for life-saving categories and the second for life-enhancing purchases. Drawing heavily from the key customer insights in each, targeting not just the buyer but the key users and beneficiaries in every case, while creating a comprehensive experience for renewal.
The first peg of this strategy must be focused towards enhancing the relationship post the first-time sign-up, unconnected to any enforced transaction. Which means that even if a health policy is not used in 12 months, there must be a communication strategy designed for the payer, usually the man, and the beneficiaries — the wife, the child and the parents. To the payer, the regular messaging must be a constant financial justification of the investment, possibly though compelling testimonials and presenting a benefit case. To the users, it can easily be an emotional story of how precious lives were saved courtesy this policy, a fine demonstration of family commitment by the main wage-earner. Thus, enabling a better course of action than would be possible through personal savings, without any extra expense.
In the case of luxury products, like cards and memberships, a usage-based algorithm can create multiple varieties of engagements. So, if a service is being constantly used, then a regular reinforcement of benefits as well as special offers can be personalised, so that there is no dissonance at the end of the year. If the service, like the Priority Pass, is not being used then a separate communication highlighting what the customer is missing out, by using common airport facilities, can be the focus. Once again, a differentiated approach for user and buyer will help in cementing the association.
In continuation of the above, the golden month prior to renewal should result in segmented communication, unlike the current transactional stuff. My wife was called by Max Bupa to simply remind her to renew, when a dire emotional pitch would work better, using her as an influencer to compel the husband to pay up. A similar approach working for Term Insurance while a version of this being applicable for luxury memberships, the opportunity cost being highlighted in provocative detail. Essentially, making even this seemingly-routine aspect come across as an experiential element, with a ritual of renewal, including a commemorative certificate and perhaps, some indulgence benefits where applicable. There is no reason why the marketing budget cannot permit a dinner voucher or similar credits even for the renewal of a serious association.
Two other aspects are worthy of consideration, the first being a robust incentive-based referral programme. WeWork gives me a 10% discount on rentals each time I can persuade a friend to sign up, which apart from being short-term remunerative, strengthens my relationship with the brand. If, through personal connections, friends are signing up for club memberships or insurance policies, my societal reason for continuity gets suitably increased. Although signing up for the highest-possible slab of Max Bupa, there has not been an institutionalised attempt in this regard, except some feeble pleas from the agent. The second aspect is innovation in pricing realisation, the solitary cheque can be intimidating while the EMI route is understandably limiting. In certain cases, a heavily incentivised five-year or 10-year plan can excite the HNI (with suitable exit clauses) while perhaps an integration with the CTC of the employee, courtesy B2B relationships, can help in making this effortlessly routine.
In sum, the simple point is to consider the strategy for renewal as part of the Integrated Brand Experience, not just an intimidating point-in-time transaction. Where the principles of wooing for acquisition are replicated in wholesome measure, to guide customers towards seamless continuity.
(Shivaji Dasgupta is the Founder of INEXGRO Brand Advisory and can be reached at: firstname.lastname@example.org)
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