Wednesday, July 29, 2009

Stressing health insurance renewal!!!

I have a Family Floater health insurance policy active for 4 years now. This policy is up for renewal in August 2009. This is a plan for 2 Adults & 1 Kid for sum of Rs. x amount. On receipt of the renewal form, I contacted the call center to inform of a new addition in my family, a lovely daughter and my wish to add her to the Family Floater plan. I was told that this cannot be done online and that I need to get in touch with the branch to get the amendment done.

I contacted the company’s representative at the local branch from where I had bought the policy. I informed him of the amendment I need to make and the subsequent premium that I need to pay. He came back with a premium amount for a sum assured of Rs. x+y amount. I told him that I wish to keep the sum assured the same, ie Rs. x. He stated that since there is an addition of a member to the plan, the sum assured has to be increased. He stated that the company does not provide a Rs. x amount coverage to 2 Adults & 2 Kids plan. I had earlier checked up the premium on the website. There is clear process to renew or purchase a Family Floater plan for 2 Adults & 2 Kids for a sum assured of Rs. x amount. When I informed the representative of this, he changed his stance stating that he is mandated to not sell a Rs. x amount coverage for Family of 4 persons.

Now, I seem at a crossroad. The call center stated I need to contact branch for the amendment. The branch representative states he needs to increase the sum assured to Rs. x+y amount. The online web site permits me to purchase a policy for sum assured of Rs. x amount.

At this moment, I pulled up the annual report of the insurance company. Something told me I will get no help from the corporate office. I found the name of the Director for Retail business and shot off a mail to him on this background. I was hoping the email id typed was right and the mail does not bounce off. When I got a reply from the director stating he will look into the matter, I knew the email id was a right guess.

That day evening, the branch representative called me and stated that he has "special approval from his ASM" for my case and he can give me the renewal with the amendment and no increase in the sum assured. The next day I get a call from the sales team from the corporate office. The person says he has to close the issue since the mail has been sent to him. He takes all my details and renews my policy.

So finally I get my health insurance policy renewed (and hopefully without too much stress to spoil my health).

And in all this melee, If only some words of congrats or best wishes been uttered on the news of my new daughter.

Monday, July 20, 2009

Customer loyalty <> Loyalty cards

Time and again whenever I ask marketing personnel on their customer loyalty programmes, I get the same answer -- "Yes, we have loyalty cards". Somehow, there is this accepted practice that a loyalty programme is all about loyalty cards. There is an understanding that the more points a customer has, the more loyal he is.

Unfortunately, this is not true. Every marketer today has sponsored a loyalty card. Every credit card gives spender points. Every airlines gives mileage point. Every debit card gives cash back. So when everyone gives the same offer, there is no differentiation in your position in the customer mind.

About 15 years back I was considering getting my first credit card. The card provider I selected was the only one giving spender points. And that was the reason I selected this credit card. Today, I carry 4 credit card, and the last credit card I opted for was because it provided me access to the lounge of the airlines I use frequently. The fact that it provides spender points never entered my domain of evaluation.

Now comes the question... so if spender points is not important, can it be taken off. There is a cost to maintain the spender points accumulation and redemption. Companies can save this cost and effort. So back to the same question... can it be taken off?

My answer is "YES, it can be taken off".

The biggest challenge is to move away from the common practice of spender points. This is one ritual that often marketers dread to break away from. And more important, there is no justification statement for continuing with this ritual.

Let us consider the previous case. Do I track the number of points garnered on my credit card? No. My only expectation is to get a private location where I can work undisturbed while waiting at the airport.

So can the loyalty points be taken off? Yes, it can. But it needs to be replaced by something more relevant. To a credit card, it could be access to some facilities -- airport lounge in my case. To an airline, it could be option of booking a preferred seat. To a bank, it could be automatic addition of an appliance to the household insurance.

This will get the customer prefer your service over the competitor because he is getting some additional service that will make life easier for him.
 
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