5 Strategies for Financial Service Providers to Boost Customer Loyalty

Customer churn is the ultimate challenge for all financial services and insurance providers. It’s even more worrisome as companies face increasing economic uncertainty, competition from new players, and new startup technologies that disrupt traditional ways of conducting business.

How does churn affect financial services and insurance providers?

Here are a few other reasons to concern yourself about customer churn:

  • Reduces profitability: Every customer that walks away results in revenue loss for your financial services or insurance firm.
  • Requires monetary investment: High churn rates mean that firms need to invest more marketing and sales dollars to bring new business in the door.
  • Decreases customer lifetime value: When a customer walks away, you can’t upsell them on additional products and keep them engaged in the long run.
  • Reflects your company’s overall health. If churn rates are high, investors and other stakeholders may perceive instability. You’ll have to do some work to recover their confidence.

While customer churn affects some insurance sectors more than others, volatility can be especially high for renter’s insurance and life insurance companies, according to an insurance consumer report.

Other types of financial companies such as banks, wealth management firms, etc. typically face an annual churn rate of 25 percent, which is no insignificant figure.


So, what factors influence customer churn rates? Dissatisfaction is typically a leading cause; people can get frustrated by pricing, poor customer service, and lack of communication. It’s also the result of any employment changes or major life events faced by customers, leading them to explore alternatives.

The type of consumer matters, too. While Baby Boomers and Gen X, which are larger segments of the market, are typically more loyal for longer, millennials are more likely to switch providers. Attracting – and retaining –  millennials require personalized products and offerings catered to their needs. However, data shows that Baby Boomers and Gen X have embraced digital innovation, especially amid the pandemic, so you can’t assume their loyalty is a given anymore.

How to curb the churn

As we’ve reminded many financial services and insurance clients, communication greatly impacts customer churn. Firms that only reach out to customers during policy/contract renewal periods are at risk of losing customers who seek greater value, personalized information, and real-time communication through preferred channels.

Here are a few more expert tips for reducing churn and increasing customer lifetime value.

1. Utilize data to pinpoint at-risk customers

Real-time data is essential to understanding your current customer churn rate, plus which audience segments need extra communication to deter them from leaving.

Some customer behaviors may predict churn risk better than others. For instance, look to your analytics to see if certain customers haven’t received any information from you within the last three to six months; it’s probably time to reach out. You can also look to call logs to investigate if anyone has dropped off after long wait times, or customer portal analytics that may suggest people are looking into how to cancel their policies or accounts.

2. Prioritize the most profitable customers

Customer analytics platforms, like ONESuite, can also help you target customers based on demographic or psychographic attributes, such as age/generation, location, health risk factors, etc.,  allowing you to determine which segments are most likely to turn into long-term customers.

Armed with this information, you’re able to target the right audiences, communicate with them based on their expectations, and reduce the possibility of churn before it’s a possibility.

3. Improve onboarding and renewal communications

While pricing and rates often make all the difference in bringing on and retaining customers, communication during critical customer lifecycle phases – onboarding and renewal – can make all the difference.

If either one of these phases is a shortcut or lacks support, customers might become disengaged and feel like they’re better off finding a new provider. Many leading firms use tools, such as ONESuite, to automate frequent, helpful communications that offer support and resources catered to customers’ needs and lifecycle stages. For onboarding, you can create custom welcome kits, deliver quarterly statements, send important documents like 1099Rs and SOAs, and simply touch base to check-in. All of this extra communication results in reduced churn and higher retention – something every insurance company and financial service provider should be vying for.

4. Learn from past churn

As important as it is to deliver a great experience and streamline customer communications, some churn is bound to happen no matter what you do. Strong companies learn from churn to mitigate future losses.

One opportunity to gather feedback is to send out short surveys to customers who cancel their policies or accounts with you. While you may not always get a high number of responses to churn surveys, you can get some sense of what went wrong and how you can improve the experience.

You can also look to your analytics platform for clues. Perhaps you notice that customers tend to cancel their policies early on. This could mean it’s important to place more emphasis on the onboarding phase and establishing trust rather than making new sales.  Also, look at what goes well during renewal periods. Are people making referrals? Leaving positive reviews? Purchasing another product? You can identify trends and apply similar communication approaches across other customer segments.

5. Add value across the entire customer journey

Many firms evaluate churn risk by analyzing only the most recent customer interactions. However, bad experiences accumulate over time, especially when customers lack information and resources, and must make repeated calls to customer service to resolve issues or encounter bad service. If your competitor comes calling, your customer may be tempted to leave. That’s why you need to build a multi-faceted communications strategy that spans the entire customer journey.

For example, your staff can send out helpful e-newsletters or articles about common financial/insurance issues. Or you can send out personalized messages that align with a customer’s birthday, holidays, or other life events such as marriage, career changes, retirement, etc. to build satisfaction and loyalty. ONESuite helps companies keep track of all this information so these communications can be as streamlined and turnkey as possible, allowing you to exceed expectations.

Contact O’Neil Today
Customer communications management and data platforms help you identify touchpoint problems, discover profitable and at-risk customers, and intervene when or before churn issues arise. O’Neil’s ONeSuite gives you various ways to elevate your relationships so you’re not always chasing after new customers and watching the churn. Instead, you can grow top-line revenue by retaining a loyal customer base.

Did you know we were recently named a Global Leader on the Aspire CCM-CXM Leaderboard™️? Contact us for a free 15-minute consult or to preview our ONEsuite CCM platform.