Embedding Products and Solutions to Increase Customer Retention
While there are several applicable definitions of “embedded” when it comes to the insurance space, for the purpose of this article we will focus on the following: An embedded product is offered as an ancillary benefit within a traditional product such as insurance, vehicle service contracts and memberships. Essentially these ancillary benefits are at no additional cost to the customer. But why would a company do this? Why give something away for free?
On average it can cost a company 5-7x more to acquire a new customer than it does to retain a current customer and increasing retention by 5% can lead to an increase of 25-95% in profits*. While “free” to the customer and what may very well look like a loss leader on your books, embedding additional benefits into your overall product will help you differentiate yourself in the marketplace and increase customer satisfaction. The marginal cost of these ancillary benefits your company incurs is a fraction of what it costs to acquire a new customer. And as we all know with insurance, renewals perform exponentially better when it comes to loss ratios. Therefore, the marginal increase in cost of adding additional embedded products is more than offset by the increase in renewal retention and overall improvement in loss ratio.
About Continued Mobility:
Continued Mobility is a turnkey solution providing roadside transportation benefits delivered through ClaimRide®’s patent pending backend benefit system and customer facing mobile application. Founded as a way to plug the transportation gaps, members no longer need to worry about getting into a tow truck or having to call a family member or friend to pick them up on the side of the road after an automobile accident or mechanical breakdown. They can now safely and securely leave the scene and continue onto their intended destination through a rideshare provider of their choice.