Once upon a time, long ago and in a land far away, companies controlled their own marketing. All decisions about what products and services should be, what they should cost, where they should be available and how they should be promoted to the market were made internally by executives of the companies. This level of control was comforting, especially to those executives who had acquired MBAs and Marketing qualifications because they had learned how to approach the market and they could create the business plan and predict with some confidence how the customers would respond. Marketing executives were taught the four Ps: Product, Place, Price and Promotion.
My thoughts today are inspired by an interesting and timely presentation at the recent FINEOS Global Summit by the best-selling author and consultant Micah Solomon, (https://www.micahsolomon.com/) who gave a speech on modern customer centricity. The core of his premise was that the customer is now in charge of many of the decisions that were once made entirely internally. With unprecedented access to vast amounts of information on the internet, and instant contact with hundreds via social media customers are now doing their own research and making their own decisions about what a product or service is worth, how good it is and how it should be accessed. If they don’t like the experience they get it has never been easier in the history of commerce to take their business elsewhere.
What are the implications?
How should modern insurers react to this new paradigm? Firstly, according to Micah Solomon it starts with the decision to place the customer at the centre of all you do. If that sounds like a radical idea then perhaps that’s a warning that your organisation is putting the value of its internal processes above the value of your customers’ satisfaction and a re-think may be overdue. Put yourself in the customer’s shoes and ask: “What do I want?” Not easy unless you can think like them but there are ways of finding out. Then work out how you can best provide it; possibly even more difficult than the first step but a necessary prerequisite to customer satisfaction.
Micah’s point here was that once you have made the decision to put your customers at the centre of your thinking then you will develop ways of engaging with them the way they want, you will develop a customer-centric culture.
Much of what characterises customer interaction with service providers today is facilitated and driven by technology. Insurance lends itself very well to modern forms of delivery, both at sale and service. Many of the interactions between customer and insurer are best executed through technology: updates to billing status, sending scanned documents, alerts of decisions or change in status of a claim.
Most interactions now can be divided into two types: either we want no human interaction, where the transaction is carried out quickly and automatically – or a spectacular human interaction, where a human agent reassures us and helps us feel that the outcome will be just what we want. This was a point made similarly by my colleague Eoin Kirwan in his last FINEOS Perspective, ‘Slow Learners or a Different Class’: the best User Experience is no User Experience. In other words, what needs to get done is done and I don’t have to make it happen.
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Micah made the simple but telling point that customers expect what he called “Digital parity”, in that interactions with insurance companies need to be as good as any interaction with any service operation: fast, easy to use and with an appropriate choice of digital activities that will happen instantly and with no follow-up required.
In other service industries companies now collect vast amounts of personal data and the clever ones do things with that data such as using it to anticipate our needs. They can make suggestions based on the results of algorithms crunching through our historical interactions. In order to make this possible insurers need to capitalise on the information they hold on their customers and the record of all transactions and interactions they have had with them. This means they can do simple things like assess preferences and send alerts the way the customer prefers, (SMS, email, phone), but also provide proactive assistance in the often complicated and stressful time a claimant may experience with say, an injury and time off work. This has to be done with sensitivity, even the best digital companies can get it wrong sometimes; I am reminded of the Amazon customer who purchased a baseball bat and gloves and had recommended to him a balaclava mask and pepper spray. Or the woman who bought bath supplies and had an electric toaster as top recommendation. Hopefully not to use at the same time.
By adopting a customer-centric approach insurers can anticipate the customer’s needs and react proactively. This requires careful thought as cultural resistance to the use of personal data varies around the world and will certainly evolve, not necessarily in the direction of acceptance. There are several companies in the P&C sector that are running automatic claims process for some risks, such as crop damage after storms, where the customer does not even have to make a claim to get recompense. Life and Health insurers will follow suit and some are already investigating sensitive ways this can be done. The challenge will be in providing the service that really assists a claimant who is sick, injured, stressed or in some way incapacitated and in need of help. Some of that help will be sympathetic or empathetic human contact, but some will be in the form of a quick, simple digital transaction or response that takes no effort or happens automatically. Better billing and administration services will demonstrate value early on in the relationship.
How can you achieve all this? Well you need a good system obviously, (but you knew I was going to say that), but most of all it is about putting the customer first and building your systems around that premise.
