How can insurance companies deliver the right experience to the right customer at the right time, while still achieving growth and operational efficiency?
Insurers realize that having a clear understanding of customer needs will help them deliver a customer experience that focuses on the customer’s interests. Many also know that it will help them drive profitable growth while still retaining customers – but that’s only if it’s done effectively. Offering the right product at the wrong time will still most likely not be successful, for example, as my colleague Tom Erskine noted here.
Regardless of where your organization is on its own journey, customer centricity is top of mind for many insurers, according to current research from Strategy Meets Action (SMA) and Ovum. Both consultancy firms indicate insurers are investing in projects addressing Customer Centricity and that will continue into 2014.
The journey to customer centricity is not by any means an easy path. According to McKinsey, “Many companies excel in individual interactions with customers, but they fail to pay adequate attention to the customer’s complete experience on the way to purchase and after,” it notes in a September 2013 Harvard Business Review article called, “The Truth about Customer Experience: Touchpoints Matter, but It’s the Full Journey that Really Counts”.
Insurance is complex and customers often need personal interaction to fully understand the products they own or are considering purchasing. The principals of insurance are based on trust and long-term relationships, and many insurers aren’t meeting their customer’s expectations. For example, a customer who bought a life insurance policy 10 years ago might need the policy’s investments rebalanced, especially if no changes have been made in several years. But oftentimes, the insurer waits until the customer calls them. Today, consumers expect their insurance company to accommodate the digital world they have grown accustomed to including: online shopping, self-service banking, on-demand movies, instant messaging and social collaboration.
However, these digital customers are only part of their overall customer base. Other clients prefer a more traditional approach such as phone, paper mailings and face-to-face interaction. Unfortunately, in many cases a typical solution to accommodate varying customer demands results in a disconnect, costly and complex channel landscape that makes it hard to get a single view of the customer and puts the consistent customized customer experience further out of reach.
So where to begin?
The solution, though complicated, can be based on one overarching objective: leverage advanced best-of-breed technology to optimize each customer interaction. SMA Partner Mark Breading has published a two-part series on innovation in customer experience. The first brief, "Innovation in Insurance Customer Experience: Strategic Considerations for Insurers" , published in August, describes the eight strategic considerations when designing the insurance customer experience. Part two, named "Innovation in the Insurance Customer Experience: Examples and Guiding Principles" (published in October), addresses the guiding principles for designing the customer experience of the future. Breading’s research addresses the three key areas that insurers should focus on for innovation, including product customization. “The customer-centric insurer of the future will offer much more flexibility to the customer in order to assemble exactly the right components to meet their needs”.
Are you keeping pace with your customers’ expectations and making Bob happy?