The Australian general insurance business has become a hot house of competition, with heavy promotion by new overseas online insurers.
Intense competition can be a catalyst for innovation, and we believe that one insurer is innovating in a refreshing and effective way – by collaborating directly with customers.
The Buzz began life co-creating with customers. Through focus groups, market research and an online community / ideas exchange called ‘My Insurance Ideas’ the IAG-backed team shaped the company that became The Buzz. (Interest declared; we help The Buzz).
A consistent and dominant theme in these thousands of customer conversations was that insurance consumers are looking for an insurer who appreciates and recognises customer loyalty and customers want to be treated as an individual.
Given the ubiquity of no-claims bonuses in Australian car and home insurance, and a belief by some customers that Years of Insurance and multi product discounts are a pricing factor not necessarily about recognising individual needs , the insurance sector are clearly not satisfying this desire. Unsatisfied customer needs offer an opportunity that The Buzz is determined to respond to.
As a formal response to this demand for recognition of customer loyalty reached the top of the task list, The Buzz asked existing customers what they liked and did not like about their other loyalty programs; ‘Simplicity and Fun’ was popular. But the stand out result was that 70% of customers responded with; ‘Give me more time to enjoy it” when asked what they would like most in their lives. Overwhelmingly customers did not want another card in their wallet and a high proportion felt that getting money back for not claiming was hypocritical as it was rewarding you for not using the product you had already bought. So the challenge was to come up with something with the customers that they would value.
Jacki Johnson, CEO at The Buzz, responded with a loyalty charter that says; implement a program that recognises customer loyalty with rewards that save time or make their time more enjoyable and safe. Give them gifts of time.
Buzz Time is the result.
The program concept is simple, as you renew your policies you receive points that can be redeemed for time-saving services from partner organisations such as Dial an Angel (home cleaning, gardening etc), Gizmo (PC and network set up & support etc), and Galmatic (driving and car maintenance courses). A range of novel merchandise and product options, real and online, fill out the reward choices available at program launch.
These rewards are a start, Buzz Time will next reach out to customers to ask and listen to determine what other rewards will appeal most to loyal customers. Co-creation is second nature in The Buzz.
To us, the strategic thinking underpinning Buzz Time is just as interesting as the points and time-saving rewards;
- Program costs do not impact policy premiums which remain risk-based and competitive
- No Claim bonuses are not required – The Buzz believes that claims are the reason for insurance and a service ‘moment of truth’ that may be the best customer loyalty creator. Loyalty should be recognised independently of claims.
- Financial returns from Buzz Time investments will come from increasing customer lifetime value as higher rates of policy renewals result from giving customers an additional reason to stay with The Buzz when their renewal notice arrives.
We wish success for The Buzz – any company with such a laser focus on the needs and recognition of customers deserves to thrive.