How fintechs are building brand loyalty by bundling insurance products
The art of selling has evolved greatly over the years. Phones, computers, tablets, and TVs have made it possible for the competition to continuously feed your customers with messages of “mine is better than yours.” This constant contact with competing brands has made it increasingly difficult to become a lifetime partner to your customer.
Yet, despite the obstacles, it’s possible to create a win-win scenario for you and your customers. Bundling relevant products and services together enables you to offer customers more than products, it enables you to offer them real value. When done properly, bundling boosts sales and increases lasting customer satisfaction — simultaneously.
Now, let’s talk bundling. As consumers, we’re all familiar with the packaging of tangible products that you can hear, see, touch, and even taste. Satellite radio included in your new car purchase, video games bundled with a new console, and burger, fries, and drink value meals are combinations we’ve all become accustomed to and appreciate. In fact, these bundles were the main focus of a 1997 study by Mercer Management Consulting that remains applicable today and served as proof of concept for use of the strategy in insurance.
The study states that good bundles have five elements: (1) the package is worth more than the “sum of its parts” for the consumer; (2) the bundle brings order and simplicity to a set of confusing or tedious choices; (3) the bundle solves a problem for the consumer; (4) the bundle is focused in an effort to avoid carrying or including options, goods or services the consumer has no use for; and (5) the bundle generates interest or even controversy.
What this means for insurance
The main focus of this article goes beyond common insurance bundles such as home and auto insurance. What we’re talking about today is how insurtechs are helping customer-centric organizations thrive by not only performing in all five areas identified in the Mercer study, but also mastering the practice of cross-industry bundling with banking, automotive, renters, and more. It’s about combining high-value bundles with simplified customer journeys that result in increased customer brand loyalty.
Here’s a few examples of financial service companies that partner with insurtechs to increase brand loyalty by bundling their products with insurance:
What they bundle: Free cell phone insurance for checking customers
This fast-growing fintech creates new bundles that take its key mission into account — to help people make the most of their money so they can live better lives. As a result, their bundles pair items that at first glance, one wouldn’t think are relevant, yet the combination leads to better money management. Customers are more likely to trust, and stay with a brand that offers them more than one benefit. In this case, customers that pay their cell phone bill with their Betterment checking account receive free cell phone insurance for damage or theft. Leaving Betterment for a competitor would also mean having to find a new cell phone insurer.
What they bundle: Travel insurance included with Premium and Metal subscriptions
Revolut, a global financial platform, is building value for its customers by including travel insurance as a membership perk for its Premium and Metal subscribers. This service makes the process for securing travel insurance seamless as card members with benefits beyond cash back and rewards. This bundle encourages customers to make travel purchases using their Revolut card and prevents them from the tedious process of buying travel insurance elsewhere.
What they bundle: Purchase protection included with the American Express Gold Card
Financial benefits like cash back and points are well-known perks offered to American Express cardholders. Lesser-known value-adds like purchase protection are gaining popularity. Thinking solely about the devices we carry around all day, drop multiple times a day, and often misplace, it’s easy to see why it’s come in handy. Customers that purchase a product using their Amex are covered when they fail to purchase the extended warranty. The extra protection increases trust in the brand to a level that keeps them loyal.
The success behind these programs is in large part due to the value gained from partnering with an insurtech that offers (1) enhanced speed to market, (2) brand alignment with your entire product portfolio, and (3) expertise in both insurance and the customer journey. Together, financial services and insurtechs turn the bundling of goods and services into the perfect recipe for brand loyalty.