How to Win Insurance Business in the Age of the Customer

Guest post by Applied Systems

Technology innovations have empowered customers in new and disruptive ways. Customers have shifted from being passive sideliners to more active players who control how they engage with insurance companies. In speaking with Forrester Research, it’s apparent how dedicated they are to helping clients develop strategies that drive growth during this business shift known as the Age of the Customer.

Consumers today have so many options with which to fulfill their needs, insurers and their brokerages must be agile to deliver service via the channel that customers expect. In today’s competitive marketplace, it’s critical for insurers and brokerages to identify the context of interactions and build upon them to create new forms of useful, continuous engagement. In this Age of the Customer, the only sustainable competitive advantage is knowledge of and engagement with customers.

 

Easy to reach, hard to engage

The share of mobile-based digital buying continues to expand in Canada. eMarketer expects mobile commerce will account for 30.0% of retail ecommerce this year, meaning that consumers will personally research their insurance at any point in time from multiple physical locations. This is seemingly good news because businesses now have more opportunities than ever before to meaningfully engage with their customers.

So what’s the bad news? Just because you can now easily reach customers, doesn’t mean they are fully engaging and connecting with you. In fact, Forrester’s recent survey reveals that only 38% of insurance customers disagree with the statement, “All insurance companies are basically the same.”  With a majority of customers agreeing or being neutral to this statement, it’s apparent that customers have a hard time differentiating one company from the next.

 

Customers are demanding more

So what’s causing this change in customer behaviours?  Forrester’s data analysis reveals five key shifts in consumer behaviours, attitudes, and expectations that fuel customer empowerment:

  • Willingness to experiment
  • Device usage
  • Digital/physical integration
  • Information savviness
  • Self-efficacy

As consumers continue to evolve along these dimensions, brokers must think differently about how to build and sustain customer relationships – more than simply analyzing historical behaviour, demographics and lifestyles.

To fully understand and engage with customers, brokerages and insurers must now consider customer’s expectations, emotional motivations and contextual decisions. Brokerages and insurers who measure how their customers evolve along these critical dimensions will understand and anticipate customer demands for new services and experiences.

 

Customer lifecycle

Brokerages must shift their focus from a product and channel centric approach to a customer-centric approach, using the customer lifecycle. The customer lifecycle is simply the enterprise’s view of the phases a customer passes through in the course of an ongoing relationship with a company.

Forrester recently surveyed 684 consumers who recently purchased car insurance to see how their experience was at they went through the six phases of the customer life cycle. Here are a few of the key results that illustrate the importance of brokerages putting the customer at the heart of everything they do to create contextual, useful engagement.

  • Discover
    Customers spend time trying to find the right broker or insurer and learning about different coverage options. Results show that 54% opted to work with an broker for their auto insurance coverage. Even in today’s digital world, this reveals that customers still value having a relationship with their insurance broker. Brokerages should leverage technology to enhance their value and better serve their customers, not replace their relationships.
  • Explore
    The abundance of information available makes it hard for customers to compare coverage and differentiate insurers. In fact, 88% of consumers said they received between 1-5 quotes. It’s not enough to simply provide information. To stand out from the competition, brokerages and insurers must target the right customers, with the right message, at the right time.
  • Buy
    When a customer chooses the policy that best meets their needs, they go through the buying process. Here, customers are looking to connect with the right broker. Of the consumers who bought their auto insurance policy from an broker, 45% said they bought from an broker because they made the process easy.
  • Use
    The next phase is how customers use their policy, such as, where to register for digital services, how to file and track claims, and where to go to view and change coverage. Results show that 14% of consumers received a welcome or thank you letter from their insurer. Insurers and brokerages need to continue engaging with their customers, even after their purchase, if they want to retain them.
  • Ask
    When a change happens in a customer’s life that requires a change to their policy, they entered into the ask phase. Forrester’s survey shows that 51% of consumers interacted by phone with their broker after the purchase of the policy. Customers demand more insight on how they can interact, and brokerages and insurers need to provide the omnichannel service approach so customers can self-serve at a time of need.
  • Engage
    The last phase in the customer lifecycle drives customer satisfaction, retention and loyalty. In a digital world, customers are looking for new ways to engage with their broker. In fact, 6% of consumers viewed an brokerage’s social media content and 9% had an online chat with their broker. Brokerages need to provide omnichannel engagement options.

 

Don’t get left behind

Technology is not the real disrupter in today’s marketplace, not being customer-centric is. Success in the age of the customer requires you to go beyond customer centricity and become customer-obsessed. Brokerages that are not already prioritizing the experience of their customers – and aligning business technology resources accordingly – risk being left behind in the Age of the Customer.

To learn more on becoming a customer-obsessed brokerage, watch the on-demand webinar “The Customer Lifecycle: A Blueprint for Customer-Obsessed Businesses” featuring Forrester principal analyst Ellen Carney.