"Something for us to consider!" - Excerpt from Ch. 4 of "The Best Service is No Service"

by Bill Price and David Jaffe

HEALTH CHECK FOR MEDIBANK HEALTH INSURANCE

Proactive messaging can also lead to increased revenues and deflected future contacts. Health insurance is a grudge purchase: a healthy customer pays premiums all year but receives no benefits (if she has had no treatments or illness). Medibank Private, one of Australia’s larger health funds, contacts customers who haven’t previously contacted the company in the last ten months, figuring that these customers are at risk of switching to a lower-cost product at another fund or of lapsing from private health care altogether. Medibank made outbound calls to these customers to “check” that they were on the correct product. In some cases the customers retained the same level of coverage. Those who were at high risk of lapsing altogether were down-sold to a lower level of coverage. The fund was able to prove that customers who had been contacted had far lower defection and lapse rates and that these proactive retention calls were very valuable. Dean Tillotson, Medibank Private’s general manager of direct sales and service, has said that the proactive customer calls proved to be a worthwhile investment: “Customers can go a whole year without seeing a benefit from our product. They are amazingly grateful that we have taken the time to call them and advise and support them. We have proven that it prevents defection and helps our customers understand our products and services better.”