Successful insurance brands are built on superior customer service. Achieving such a level of customer satisfaction requires a true understanding of the customer experience. Add to this the shift in power that has taken place due to the advent of social media, and the bar has been raised even further.
The customer journey and understanding how to maintain consistent conversations across communication channels and touch points, including Web, mobile and social, print, and the call center, is vital. This is a truism insurers must prepare for as the industry modernizes and reacts to the evolution of customer expectations and changing insurance regulations. Simply stated, the way insurers engage and interact with their customers has never mattered more.
In order to compete in today's market, differentiation is not just a nicety, it's a necessity, especially when the cost to acquire a new customer far exceeds the price of retaining an existing one. Building and maintaining a strong, loyal customer base requires critical insights into customer needs, preferences and behavior. It also requires the consistent delivery of positive experiences that strengthen relationships, encourage recommendations and drive growth. Ignoring these realities is both remiss and detrimental to the bottom line.
Recent research indicates insurance industry leaders are placing a top priority on initiatives that allow them to be more effective in managing the customer experience. Forrester research shows a high correlation between consumers' rating of a company in the Customer Experience Index (CXi) and their willingness to buy from them again and make positive recommendations. In addition, the higher the CXi score, the less likely a customer is to defect.
In a recent study, Forrester determined that the loyalty-based revenue benefit for the average insurance company, one with 15 million customers, that moved from below to above industry-average CXi scores was $262 million per year. Inquiries into the topic by research firm Gartner also reveal that customer experience is among top-level executive concerns because it is a recognized revenue driver, even in times of economic uncertainty and government intercession.
If the industry doesn't get it right on its own, government agencies have, and will, intervene on behalf of consumers and legislate a better customer experience. For example, the Credit Card Accountability Responsibility and Disclosure Act of 2009 mandated very specific requirements for more understandable consumer credit card statements. And the landmark Patient Protection and Affordable Care Act (ACA) of 2010 mandated a very detailed summary of benefits and coverage statement that describe health care benefits in terms consumers can easily understand.
Steps to Ensure an Enhanced Experience
Understanding the customer - not only listening to them, but engaging with them on a level where it's possible to give them what they need before they realize it - is key to delivering the personal and relevant communications that lead to success. Is your organization prepared to deliver a modern customer experience? Consider the following:
1. Ensure you connect in a relevant and personal way, regardless of channel. Consistent communications with customers across all channels is key in the digital age. It's even more important to create relationships with customers that are relevant, personalized and appropriate. Further, give the customer a choice at each interaction to change their preferred method of communication. Asking customers how they prefer to receive information can provide differentiation in a crowded market.
2. Monitor those channels and engage in a way that builds brand image and loyalty. Engaging in ways that are relevant, personalized and meaningful is crucial to building brand loyalty and image. Take advantage of opportunities to engage with and gain insight from customers. Engagement motivates customer participation and drives purchase decisions and loyalty.
3. Empower your employees to be successful. Employees must be able to meet the customers' needs in real-time and ensure a great customer experience regardless of channel. This is essential in modern business environments where marketing and sales - not IT - control investment and CRM. Customer retention and relationships in general are viewed as critical factors to success. Many companies find themselves limited by rigid legacy solutions, and others have selected solutions without fully evaluating or understanding all of the requirements, only to find that the new technology is incapable of meeting the needs of the enterprise. To enhance your customer engagement capabilities, empower your employees with the tools needed to produce relevant, personalized experiences across all customer communications channels.
4. Walk it like you talk it. In order to properly manage the customer journey, organizations must monitor each potential touch point. To establish customer centricity as a critical strategic imperative and to truly make it part of the corporate culture requires executive level management commitment and oversight, and thus the establishment of the new role chief customer officer in many organizations.
Larry Hogan is the global director of industry marketing for insurance at Thunderhead.com, a customer experience software provider.
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