Category: Reality Check

John Hancock’s New Reward Program to Life Insurance Customers

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I offered my tiny two cents today in an NPR Marketplace story about a new rewards program by John Hancock for their life insurance customers. Under the John Hancock Vitality Program, customers can receive discounts and free rewards for making healthy lifestyle choices. These choices are recorded through smart wearables such as Apple Watch and Fitbit. Since this is a very loyalty program-relevant topic, I decided to repost the radio segment below, followed by a list of the pros and cons that I see in the program.

Pros

  • The activities rewarded through the program are things that consumers should be doing and are beneficial to them. So the program is high on both relevance and aspirational value.
     
  • Since most activities are automatically tracked by smart devices, the program is also quite convenient to participate in.
     
  • Most importantly, from a branding perspective, the program turns a negative event driven product into something positive. Customer interactions surrounding life insurance (and most other types of insurance) policies are typically motivated by an unfortunate negative event. This program focuses on the good and creates positive connection between the brand and the customer. It also greatly increases the frequency of brand-relevant interactions with customers.

Continue reading “John Hancock’s New Reward Program to Life Insurance Customers”

Vulnerability of Loyalty in Numbers

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Last week I wrote about my unfortunate service incident with Delta Airlines that made me question my loyalty to the company. That got me digging a little deeper into how vulnerable customer loyalty really is. The statistics I found revealed some solid quantitative evidence of how vulnerable customer loyalty can be. I want to share with you some of the numbers that I discovered.

Loyalty is Not What It Used to Be

An Accenture survey of 25,426 consumers in 33 countries reveals that 77% of consumers admitted to retracting their loyalty more quickly now than they did three years ago. More importantly, loyal customers who spent more with a brand switched to another brand or provider 17% more often in the previous year than those who spent less. These loyal consumers were also 9% more likely to retract their loyalty altogether. Similar findings have come from an earlier study reported in Harvard Business Review, where best banking customers may be the first to defect when a new option becomes available.

Not only have loyal customers become more fickle, but many consumers are not inclined to be loyal in the first place. The Accenture survey shows that 36% of consumers consider loyalty to be irrelevant to their spending. In a separate survey of 7000+ consumers by Corporate Executive Board, only 23% of consumers were interested in having a relationship with brands. A study by McKinsey further shows that many retailers’ best customers are indeed just heavy users that spend a lot at competitors too. For a large DIY chain, 45% of lost revenues to competitors were through the chain’s best customers. Continue reading “Vulnerability of Loyalty in Numbers”

An Ambush on Customer Loyalty

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I’ve always liked Delta Airlines. In my perception (perception is reality, right?), Delta has nice airplanes, friendly staff, and generally good service all the way around. I consider myself a loyal customer of Delta. With the exception of mandated price shopping for work travels, I always like to look at Delta first when I need to go somewhere. But my recent service issue with Delta caught me completely by surprise. It made me question if I had misplaced my loyalty this whole time.

The Delta Luggage Incident

It was something simple really. While coming back from my international travel, I rechecked my luggages at the New York JFK airport for the last domestic leg of my long flight home. When I reached the destination, two of my three checked-in luggages showed up on the conveyer belt, and the third one did not. I filed a claim with the Delta baggage service right away and was informed that Delta would contact me for delivering my luggage. In the days that ensued, I checked the online status of the luggage regularly. Unfortunately it never changed.

Delta Online Baggage Status

After 10 days not seeing any change and not hearing anything from Delta, I finally picked up the phone to call Delta. Having to hold for half an hour on the phone and still no one on the line, I reached out to Delta via Twitter instead. Luckily that got me a faster response than the good ol’ phone. In a few minutes of messaging with the Twitter service rep, I was informed that the status means that my luggage was in the security area. The rep asked what the luggage looked like and what was in it. I told him/her that it was a smart balance scooter (like the one you see at the top of this page). This was when I was informed of a Delta policy that I had been complete unaware of previously. The screenshot of the stated policy is shown below. Continue reading “An Ambush on Customer Loyalty”