So much is said these days about enhancing the customer experience, “delighting” customers and delivering customer service that goes “above and beyond.” For large enterprises, particularly in the insurance industry, this focus on customer experience is fast becoming a key competitive differentiator.
Disruptors in the e-commerce, retail, and hospitality industries have set the standard for new-age customer service. Amazon, Zappos and AirBnB are notable examples. This standard is spilling into other industries. In fact, 89% of companies expect to compete on the basis of customer experience vs. only 36% only four years ago, according to Gartner.
But the question remains: Should every company try to be an Amazon or Zappos with their “whatever it takes” approach to customer service? I argue they shouldn’t. And, quite frankly, they can’t.
Know what your customer REALLY wants
Insurance, for example, is a low-interest, low-involvement category in that people rarely get excited about paying a policy premium or filing a claim. Can insurance carriers and providers delight policy-holders? Do policy-holders want to be delighted? I think about it like a visit to my dentist. My dentist is a great guy, very professional and takes great care of my teeth, but I always dread going and am glad when it’s over. The reality is, no matter how personable he his, how comfortable the chair is or how new the magazines are, I simply can’t be delighted. It is the dentist, after all.
In the context of insurance, customers focus more on utility than on the extraneous features. It’s just like going to the dentist. Customers want to get in, get it done and get out as quickly and as painlessly as possible. The same is true for customer service. Customers just need the basics to run smoothly. They want processing their claim to be easy, and they want to move on. Everything else — any extraneous features — comes second.
Despite this attitude, the insurance industry is in desperate need of innovation. In fact, it’s a $1.2 trillion dollar behemoth that’s begging for disruption. The proliferation of technology and innovation across other industries, such as retail and banking, means consumers are expecting the same level of innovation elsewhere — and insurance is in their sights.
How can insurance companies approach innovation without overhauling the customer experience and over-complicating things in the process? The answer is simple: focus on utility over features.
Utility over features
Insurance companies need to determine what their customers’ most basic demands are and must seek to fulfill them before exploring any transformative technology, additional features or new processes. When exploring new ways technology can improve business, it’s easy to get swept up in the sexiness and promise of innovation — the dreaded technology-for-technology’s-sake initiative!
But to be effective, executives should approach innovation and new technology with a clear strategic and connected directive. Often, we crawl into our own heads and, with the best intentions, solve for a business problem without understanding the effect on customers. A thorough understanding from the customer’s perspective is essential, as is an understanding of how to align customer needs with the company’s overall direction. So the key is starting off small. Implement a simple process change to introduce customers to a new way of doing things and expand from there.
Because while innovation is desperately needed, we mustn’t forget that change is hard. People (and especially large enterprises) are naturally resistant to change. Inertia, complacency and “that’s the way we’ve always done it” attitudes are easy and-all-too common in the insurance sector.
Insurance customers aren’t ready for a revolution, either. Nor do they necessarily want one. Changes in technology mean a new learning curve, and if that curve is too steep or not thoughtfully executed with the customer in mind, the satisfaction plummets.
Customer satisfaction is simple
Your goal is to save customers time, save them money or simplify their experience (bonus points if you can do all three!). And at the core of any great experience is getting to the root of the customer’s problem. Customers aren’t always looking to be “delighted,” but they are looking for an answer.
So I’m not suggesting an “Amazon-ification” of the insurance industry, but I do believe all companies should be aware of companies that are raising the bar and setting customer experience expectations. Think of it as another way to manage risk in the marketplace. There is a price tag associated with increased levels of customer service. Not all customer segments are created equal, but a more granular understanding of cost to serve customer expectations and profitability are foundational to building the best customer strategy.
Originally published in Insurance Thought Leadership.