June 08, 2010
A boxer prepares for months, on a diet of spaghetti and raw eggs, before taking on his opponent in the ring. While car buyers may stick to a menu of
Consumer Reports and
TrueCar.com, they do prep—spending about four months on average researching before purchasing. Unfortunately, someone whose auto is scrapped as a total loss is at a disadvantage when it comes to negotiating a car sale. They hear the foreboding voice of Adrian telling Rocky, "You can't win." This presents an opportunity for your company to be the hero and make winners all around.
Historically, most insurers have opted to stay out of assisting their policyholders and claimants with vehicle replacement. This is due in large part to the challenge of building an in-house program—or finding a solution partner—with a scalable platform, uniform dealer relationships and a referral process that fits into the settlement flow with as little disruption as possible. However, during the past 18 months, auto-buying program providers have developed tailored total loss programs that address these issues. Known as "vehicle replacement programs" (VRPs), these solutions are aimed at providing the following benefits:
- Boosting customer service/net promoter scores to increase customer retention following a total loss;
- Shortening the claims cycle, and thus rental car and storage costs, by offering customers an easy replacement method for their vehicle early in the settlement process; and
- Converting third party claimants into customers.
But not all VRPs are created equal. A successful program contains five foundational components.
Training and tools to enable claims reps to introduce the program and quickly get information to the policyholder/claimant
Easy integration of a vehicle replacement program should not be understated. It is imperative that claims reps be trained and have the confidence and tools necessary to swiftly communicate program access points (online platform, contact center, etc.) and details. This starts with a comprehensive training program that teaches reps ways to springboard off of common client statements made during the claims process, such as: "I need to extend my rental car coverage so I have time to find a new car."
Once a program referral is made, new technologies allow claims representatives to easily submit a customer's contact information to the program's solution partner, triggering an outbound call and/or an e-mail from a program specialist with details and Web links regarding vehicle purchases. Claims managers can follow the VRP process through data reports that show claims reps' referrals and, ultimately, customer usage of the program.
Contact center for policyholders/claimants who prefer to speak with a trained car replacement specialist
Given the compressed length of the buying cycle, many total loss sufferers require live assistance. A good solution partner will have a contact center staffed with specialists who understand the needs of the customer, can quickly zone-in on cars that fit the client's budget and other requirements, and will rapidly deliver a tailored request to a local program dealer.
An online car research and shopping portal capable of delivering a consistent experience for millions of total loss sufferers
Almost 90% of consumers today use the Internet to research vehicles, and nearly 40% would like to buy a car online, according to a Capgemini study. A VRP should have an online platform for customers who prefer a self-service option. The platform should be rich with research tools, such as safety ratings, vehicle reviews and a monthly payment calculator, so customers can do all of their research in one place. Finally, the ability to brand the program under the insurer's moniker serves as a reminder to the customer that the assistance is coming from their insurance company.
A contracted dealer network offering pre-arranged, discounted pricing on new and used cars that have been pre-screened for defects
Your VRP partner can have the best front-end solution, but if the experience breaks down at the dealership, it all goes for naught. Be sure your partner has contracted with dealers that ensure high customer service standards. It's possible that some of the program dealers will overlap with your contracted repair shops. In these cases, ask your partner if a VRP referral program can be implemented directly at these overlapping dealerships.
As follow-through, the VRP should provide the insurer with information on the chosen replacement vehicle. That way, the carrier's marketing department can follow up with quotes for insuring the new vehicle either directly or via an agent. This will help with retention.
Comprehensive marketing support, including messaging and creative development of all policyholder-facing materials
Your claims department doesn't have time to develop e-mails and other marketing materials for the program. For this reason, your partner should have an in-house creative shop that can develop material for you to approve and implement. Some creative ideas for marketing the VRP include providing collateral for appraisers to hand to customers at the appraisal, links in the claims section of your Web site, integration into your company's smartphone application (if one exists) and having appointed agents refer the program to their customers.
According to a 2009 auto insurance satisfaction study by J. D. Power and Associates, customers who have had a positive claims process experience are considerably more likely to renew with their existing insurer and recommend the company to others. To capitalize on this knowledge, customer service-driven carriers have already begun to implement VRPs because of the opportunity they present to boost satisfaction ratings and net promoter scores. Be the hero because your clients shouldn't have to duke it out like Rocky against Ivan Drago. With the right VRP behind them, they can win!
Jason Nierman (
jnierman@zag.com) is the director of
Total Loss Business Development for
Zag.com.
Zag launched its
Total Loss Auto Buying Program early this year and has live programs with a growing number of Top 25 insurance companies.