The benefits industry has lagged behind most other sectors indeveloping a focus on lifetime consumer value. While the industryis evolving rapidly, it still carries with it some of the badhabits of its core medical insurance roots.

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Many organizations are still primarily concerned about plandesign and payment on claims. This means that most consumers don’thear from the benefit provider after enrollment unless there is aclaim.

As a result, retention rates are poor, costing benefit companiesunnecessary and substantial investments in customer acquisition —and the missed opportunity of creating a “lifetime customer”through ongoing consumer engagement.

However, a few benefits providers and distributors are beginningto move away from the transactional nature of their business modeland focus on customer retention rather than customer acquisition.This requires an emphasis on ongoing customer engagement ratherthan transactional outreach.

From a simple investment perspective, this makes sense. Studieshave shown re-enrollment rates increase by double-digit percentagepoints when engagement replaces transactional outreach.

Customer engagement is becoming a buzzword in the benefitsindustry. However, more often than not, it is thrown around withoutthe necessary strategic shift and operational wherewithal of anactual engagement plan. True customer engagement requires buildinga meaningful dialogue with the customer that increases theircommitment to the benefit brand and eventually builds brandloyalty.

Related: Tech helps sell policies, but doesn't retaincustomers

This, in turn, creates the “lifetime customer” and can drivesocial network advocacy and word of mouth, increasing both memberretention and acquisition. But to achieve this aim, engagement mustbe achieved through meaningful efforts supported by the rightinfrastructure and approach.

A changing benefits landscape creates new engagementopportunities

While the need for a focus on member retention has beenrecognized relatively late in the benefits industry, emergingtrends are beginning to drive change within this market. Theseinclude:

• The rapid growth of voluntary benefits, which also have some of thelowest retention rates in the industry today

• An exponential increase in out-of-pocket cost shares forconsumers, which has reduced the perceived value of many healthcoverage options

• The expansion of workplace and voluntary benefits beyond justhealth, dental and disability plans. For consumers, these benefitsare not only about protection any longer but are also seen as ameans to enhance their lifestyle

• The potential retooling of the Affordable Care Act, which mayboost interest in health coverage outside of traditional majormedical plans

• A general lack of ongoing dialogue between the benefits consumerand product provider, which in turn negatively impacts memberloyalty

Using engagement as a tool to increase consumer lifetimevalue

The last of these opportunities represents an area where engagementcan deliver significant ROI. Ongoing, active engagement is acost-effective way to improve customer loyalty while increasingeach member’s lifetime value. As with any business model, the costof retaining a member is substantially less than the cost ofreplacing one.

Yet many carriers, benefit providers and brokers still ignorethe importance of maintaining an ongoing dialogue with theircustomers. Consider the following scenario which is all-too-commonin the benefits industry today.

A member enrolls in a voluntary product because of a particularpain point at that time in his or her life. This individual maythen go for months — or even years — without hearing more aboutthese benefits. The individual’s perceived value of this productwill diminish over time, which means they are not likely torenew.

Or perhaps the individual leaves their workplace and has no ideathat they could continue to enroll in this voluntary benefit afterthey make this transition. As a result, this customer is lost —probably for life.

It’s a fact that many product providers and carriers spend bigmoney to acquire their customers only to largely ignore them afterenrollment takes place. In fact, studies show that two thirds of consumers saythey don’t have a relationship with their benefit provider. Yetongoing engagement efforts can reverse this trend.

As an added benefit, engagement marketing is generally alow-cost strategy that can complement an organization’s existingmember communication efforts.

How to implement proven engagement best practices

When carriers, product providers and brokers do not easily turntowards member engagement, it is not just because this shiftrequires a new mindset entirely, but also because operationalizingcustomer engagement seems like a daunting task.

One company has decided to take on this challenge, building anentire engagement infrastructure for benefit providers andcarriers. Genius Avenue uses research, industry data and advancedanalytics to provide consumer engagement on behalf of its customersand help them focus on the customer experience.

Through its history working with leading carriers of all typesof voluntary and workplace benefits, the company has developed andrefined the following engagement best practices:

• Use business intelligence to understand your audience. In orderto perform the proper data analysis, you’ll need to collectdemographic and sociographic information about your members from avariety of sources. This will help you assess each member’sbaseline engagement level and their unique needs, preferences andlifestyle.

• Segment your membership. Once you have all of the informationdetailed above, you can then segment your member population toprepare for implementation of personalized outreach. For example,engagement efforts to promote a disability plan to older,self-employed individuals is a very different process compared toencouraging a millennial at a tech startup to purchase travelinsurance.

• Develop your targeted interventions. To start, considerimplementing simple drip campaigns using channels like emailmarketing. However, you’ll also want to collect a member’scommunication preferences up front to better understand whethertext, email or other outreach is their desired channel.

• Show, don’t tell. Engagement outreach should be predominantlyvisual, as videos, infographics and imagery all receive betterresponse rates than content-heavy methods.

• Get interactive. Solicit member feedback through surveys andquizzes to encourage dialogue with the member, while collectingvaluable data about their lifestyle and preferences.

• Mix it up. Using the same tired messaging and visuals will makeyour engagement efforts feel stale. Developing unique outreachefforts each time is critical to maintaining engagement overtime.

• Engage, don’t sell. While there are opportunities to upsell andretain members inherent in the engagement process, always rememberthat your aim is to build a dialogue and to give members valuableinformation and resources.

• Tracking response rates and refining your approach. For example,Genius Avenue offers a business intelligence dashboard whichcontains all of the insights collected about a group’s members.This includes age, gender, premium rate, and length of vendorrelationships. It also integrates financial, web, census, andTwitter data to provide a full picture of each member.

While there is more to engagement than meets the eye, theseprinciples point to some of the critical steps involved indeveloping, refining and measuring a consumer engagement model.Research shows that engagement strategies like these can driveincreases to member retention, referrals and overallsatisfaction.

As a result, organizations looking to compete in an increasinglycrowded marketplace can’t afford to ignore the long-term benefitsderived from successful member engagement.