Americans don’t understand insurance. They want it. They need it. They buy it, but according to a 2017 survey from home insurer Hippo, only 4% of Americans can identify the basic terms of their health insurance. In many ways, insurers have a market advantage on consumers because so many aspects of our modern living experience require insurance. For our homes, cars and health, insurance is a safety net and a cost that our society has accepted as necessary. All insurers sell essentially the same value proposition to customers, and aside from pricing wars and complementary services, much of the market battle for insurers today lies within their brand. Now, we aren’t talking about the creative war between the Gecko and Flo character. Today, brand means customer experience (CX), and CX superiority drives value, separating the mediocre from peak performers. In this market, insurers are selling customer experience, not insurance.
A 2014 Medallia Analysis study showed a strong correlation between good customer experience and revenue. Customers who experienced good to outstanding transaction-based interactions with a brand were likely to spend up to 140% more on their products and services over time. For annual subscription-based interactions, customers who scored their experience highly had a 74% chance of returning as a customer in their next account term versus just a 43% for poorer scores. CX matters. It impacts customer perception, attrition and most importantly, your bottom line. One out of three consumers leave brands after a poor customer experience according to a recent PWC study. Selling a good CX can make or break insurers and their brands, but with sound design principles, technology and a mission to truly improve the lives of their customers, insurers can clarify what it really means to have their protection as a service.
Remember, most consumers don’t know their insurance terms, but they know they need it. Most would consider the need for insurance pretty obvious. It’s how you cover your costs in case of a mishap. Regulations require it, but underneath the surface necessities there are very deep emotional motivations behind consumers’ insurance purchasing behavior.
Think of the white collar worker who commutes every day in his or her car. Insurance is the tow truck that gets his vehicle safely off the road and eventually into a short-term rental until things are fixed after an incident. Think of the blue collar worker and workers compensation insurance that guarantees a steady income if a workplace injury forces missed labor.
There’s a why behind the why, and knowing it is key to establishing a sound CX strategy. Always be surveying your customers, identifying their needs and understanding the deeper motivations behind their insurance purchasing behaviors. Their insights can inform your strategic priorities, helping you discover and define their expectations.
Knowing your customers’ expectations, the why behind the why, will allow you to design experiences that will support their goals and ensure peak CX that will separate you from your competitors. Use their expectations and motivations to map their experiences. Visualize their ideal interactions with you, as well as their potential concerns and frustrations. Map out the happy endings and underwhelming contact points. With these journey maps in place, you can supplement their ideal customer vision with experiential concepts you can eventually prototype, test and build. For every car insurance customer who says, “If my car breaks down, I want a serviceman to me in under 45 minutes”, there must be an insurer who intends to provide an experience designed to meet that expectation from the customer’s initial call to dispatch location, coordination and assistance with quality and care. Where there’s a will to serve, there’s a way, regardless of the insurer’s operational reality.
With other service industries like banking and hospitality flipping the service model to self-service through digital channels and delivering highly responsive support, consumers expect the same from their insurers. These days, peak CX looks more like an e-commerce experience via Amazon than anything else, and it takes a highly adaptive organization founded firmly in customer-centric design thinking with the technical expertise to prototype, validate and build mechanisms to meet evolving customer expectations. As customers look to better understand their terms, they’ll use aggregators like term life insurance quotes to get quotes and quickly compare rates. Insurers must be able to easily integrate into these services.
While some have started their journey, many insurers are still figuring out how to navigate this transformation. Conservative budget planning and short-term prioritization can undermine this kind of metamorphic intent, but as more consumers go digital, transformation becomes as much of a necessity for insurers as insurance is for their customers. Insurers must serve customers across channels and be more transparent. Most importantly, insurers must look to artificial intelligence to fill the gaps in their CX, lifting experiences for their customers and driving efficiencies for themselves.
Artificial intelligence alone will not lift your CX, and in many ways, misguided, poorly designed bots implementation can frustrate your customers more than help them. It’s important for insurers to work with bots and not aside, understanding that bots are there to ease friction but not manage the experience from end-to-end. After noticing unacceptable customer churn rates, Sprint integrated predictive analytics into their customer servicing to identify customers at risk of getting caught in churn according to this Forbes story. Once these customers were identified, Sprint agents would make retention based offers to keep them satisfied. That’s what cognitive collaboration looks like. On the phone, your customers shouldn’t be pounding through your bots to get to a human but rather offering them information your human workforce can use to better service them.