There are customers who contact insurance companies via social media, others will phone and many more will try an email. Then there are the dedicated contact routes for sales, renewals or claims handling. The customer’s perception throughout every communication can really affect their willingness to spend cold, hard cash. So in an online, 24/7 economy, communication matters.
Matt Churchill, Director at Medallia offers some thoughts on why
The insurance sector is under increasing pressure. Pay-outs are at an all-time high with reinsurance company Swiss Re estimating a bill of $95bn for 2017’s influx of natural disasters. Simultaneously, insurers are carefully trying to balance efficiency and costs so that tomorrow’s customers can benefit from policies that are both comprehensive and competitively priced. And to top it off, they are competing in a new marketplace where sector is irrelevant but customer experience is king.
These factors have taken their toll and have led to a decline in customer ratings. The 2018 UK Customer Satisfaction Index revealed a 0.7 point drop in customer satisfaction within the insurance sector over the last six months, continuing a steady period of decline over the last 18 months. The stats don’t improve elsewhere either, with research from Capgemini finding that less than 30% of customers have had a positive experience with their insurers.
Poor brand perception, increased regulatory scrutiny and an erosion of trust in the insurance market can have lasting negative effects – the most obvious being that customers will vote with their feet. One Medallia client found that 40% of customers were likely to switch providers after a bad claims experience – a risk the insurance sector simply can’t afford to take.
Stopping the revolving door
From our work with customer experience programs across multiple industries, we’ve identified four business capabilities that distinguish leaders in customer experience management. When applied to the insurance sector, these capabilities allow insurers to stay in touch with what customers are thinking and feeling about their experiences. As a result, insurers are better equipped to learn from their customers, respond appropriately to their needs, and adapt more quickly to a changing marketplace.
These capabilities are as follows:
1. See yourselves as your customers do
Organisations tend to see themselves through the lens of their own teams and processes. But this inside-out view limits an organisation’s ability to see itself the way its customers do. The advice here is to engage with customers and initiate dialogue at every customer touchpoint. It is an ongoing process, but one that will enable insurers to develop a thorough understanding of their customers’ experiences at each interaction point, and to get immediate feedback on improvement efforts or new initiatives.
This is particularly helpful when thinking about the claims experience. Here customer experience data can help insurers identify and prioritise the drivers of satisfaction. For example, by linking customer feedback to claims cycle times, customers can set more impactful targets for the claims organisation. Also, knowing the impact of third parties is crucial. For example, in many claims experiences, the customer may have the most meaningful interactions with a bodyshop, plumber or locksmith. These third parties may be chosen by the insurer, and in effect are acting as an extension of their brand. Understanding how these parties influence the claims experience, and therefore likelihood to churn, is critical.
If done well, this dialogue and the valuable information gathered will provide employees, from the front line to the C-suite, with a shared understanding of how customers feel about the company’s offerings and its responsiveness to their feedback.
2. Wire customers into every decision
Gathering feedback is all well and good, but it is meaningless if you don’t act on it. Many companies are beginning to share customer experience feedback in near real time, weaving it into daily operations to enable coordinated learning throughout all functions, at every level. This “wiring” of the customer-centric perspective into key processes allows executives, managers, and employees who are interacting directly with customers to make smarter, more aligned decisions to improve their experience. The most obvious opportunity is to automatically share feedback and ensure that it informs how employees interact with customers. Many insurers are using real-time feedback to coach their customer facing teams, and identify gaps in training or knowledge, or share best practices that have lead to “delighted” customers.
3. Drive accountability at all levels
In a truly customer-centric organisation, every employee will be focused on the customer experience. Many companies use satisfaction scores and other outcome measures such as retention rates and churn to evaluate employee performance, especially where employees interact with customers directly. But accountability can be achieved more productively when employee evaluations are based on how well workers carry out specific actions or desired behaviours. For example, global insurer Zurich closes the loop with every customer reporting a negative experience.
In its US B2B market the CEO and exec team personally call back customers to repair and build customer relationships. The impact of this is significant and far reaching with promoters spending 27% more and being five times less likely to leave and five times more likely to bring in new business.
4. Innovate continuously at scale
As companies grow, they usually become less responsive to customers and less agile. But this shouldn’t be seen as an inevitability. When customer data is widely distributed, and customer voices are heard, employees can fix problems, test new ideas, and scale the best concepts faster. Comparing more than 140 programs, Medallia’s research found that companies in the top quartile of Net Promoter Score (a measure of customer satisfaction) ran seven times the number of innovation tests run by companies in the bottom. Consistently achieving levels of customer satisfaction higher than the sector average is linked to better turnover growth, profit and employee productivity.
Create a culture of customer centricity and grow your business
Addressing these four identified business capabilities will enable the insurance world to adjust products and services more quickly, to move nimbly into new markets, and to create competitive advantages that are difficult to emulate. Although customers have become tougher, savvier, and more demanding, loyalty and its importance to the customer has remained. Better insights enable companies to make informed decisions that better serve the customer, the employees and the business. In doing so, the insurance industry can build a sustainable culture of customer centricity, unlock new pockets of value, and improve business operations.