I recently faced an insight I didn't want to. The brutal truth came to me: I may have more ex-customers than I have customers. But I defy anyone who's been in the voluntary business for 30 years, as I have, to deny it.
Think about it. Whether you call your products group voluntary, individual or hybrid, you lose 10 percent or more of your voluntary benefit customers every year. Why? There's employee turnover, where even fully portable products are left behind.
There are products dropped due to the employee's financial priorities. There are products left behind when an employee retires. There are employees who purchase and decide to drop products because they cannot afford them or don't really understand them. So in thinking about the hundreds of thousands of ex-customers who had protection and lost it, I asked myself: “What can we do about it?”
Yes, there will be new lives to sell, replacing the ones that went away. But in most cases this ongoing re-enrollment trades one customer for another. Voluntary enrollment participation within an employer tends to approach a steady number of unless the group size changes significantly.
Improving the percentage of employees who retain our products is a matter of customer focus. This starts with product selection and positioning. There are several things to keep in mind here.
One is the priority of needs of employees. Think how the core needs of employees and their families are answered first, and keep in mind that people may not understand their needs as well as we do. The classic example of this is disability income protection. Most employees undervalue disability protection, even those who have gone through an enrollment process. Portability of disability products is often overlooked because employees may not realize they have that right.
A second product positioning is affordability. Many times, high cost relative to perceived value is the reason employees drop coverage. Employees are more likely to keep a product with a low price point.
And contrary to the opinions of the kids on those ubiquitous cell phone commercials, more is not always better. During the front-end enrollment process it is always important to refrain from overselling voluntary products. Many times it is appropriate to offer multiple voluntary products during an enrollment, but it is not appropriate to encourage specific employees to buy them all, especially not all at once.
We have an obligation to help employees understand their needs for voluntary products in light of their ability to pay for them. An oversold customer is likely to become an ex-customer.
What can and should be done here? How can we as a business retain more of these lost customers? Let's crowdsource a bit. Please send me your ideas at the email address below, or contact me via LinkedIn, and I will compile your ideas into a follow up column.
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