‘Obsess over customers’. That’s Amazon CEO Jeff Bezos’ favourite mantra. And it’s no wonder, with the company a consistent leader in customer satisfaction, the world over.
It might seem easy to dismiss the business practices of an internet-based US retailer as irrelevant to the Australian insurance sector. But, the truth is, insurance companies are now being judged against other consumer-orientated businesses.
Accenture’s Asia Pacific Insurance Strategy Lead Ravi Malhotra explains: “When a consumer has a great experience with Amazon, or the service provider that repaired their PC, they think, ‘why isn’t my insurer like this?’.”
With insurance customers’ expectations set outside the industry, customer centricity is becoming increasingly important for brokers.
What is customer centricity?
Being customer-centric is more than just providing great customer service. It’s putting the customer at the centre of everything your business does, while considering the customer’s broader needs.
For brokers, customer centricity extends far beyond texting clients to notify them that their premium is due. It’s a holistic approach, orientating brokers to focus on customer experience across all of the company’s business operations. “Customer centricity is not simply a marketing function,” Malhotra says.
“It cuts across all business units; from how you position yourself in the market, to sales, to service.”
And in the digital age, where consumers are increasingly sophisticated, customer centricity has become a crucial way of differentiating service providers.
The rise of customer centricity
The soft market is one reason for the rise of customer centricity within the insurance sector. With insurers earning lower returns, there’s more pressure to compete, leading to a greater emphasis on customer service.
But, more importantly, consumer behaviour has changed rapidly. Consumers now actively seek advice from social media and online services before making a purchase. Globally, 48% of consumers now use social media when making purchasing decisions.
Customers no longer care to experience a company personally before forming an opinion about it. So how does this change affect insurance brokers?
The reality is that brokers are already customer-oriented. Consult Insurance Solutions Founder and Managing Director John Kelly says: “At the simplest level, customer service fundamentals for brokers haven’t changed. We used to say ‘know your customer’, and we still say it. What’s changed is the way we can learn about our customers and how we deliver our services to them.”
GSA Insurance Brokers Director Business Development Nicole Mellick agrees: “It’s no longer about traditional methods like phone, email or catching up over a bite to eat.”
Brokers are now able to engage with their customers and prospects using multiple platforms, including blogs, Twitter, Facebook, YouTube and LinkedIn. “It’s about engaging with individual clients in the way or ways they want to be engaged with,” Mellick says.
“Even in the digital age, the broking business is still relationship-driven.”
However, using different channels to engage customers is just the beginning. Both businesses and consumers are now able to access unprecedented amounts of information about each other.
Regardless of the size of the business, data analytics allow brokers access to rich
information about their clients. And it’s rich data about insureds that offers real scope for brokers to become more customer-centric.
There’s also enormous scope for brokers and insurers to collaborate in order to better service their customers.
“Insurers have a lot of customer information [obtained via data analytics] they can share with the broker,” EY Partner PI Advisory Walter Poetscher says. And that information can be harnessed to tailor insurance to clients’ needs.
This is particularly relevant given that an EY global survey of 24,000 consumers at the end of 2014 found that a massive 90% of respondents wanted more engagement with their insurer.
Indeed, as both Nicole Mellick and John Kelly say, the key to customer centricity is engaging with clients.
But how should brokers and insurers approach the notion of customer centricity when designing or rethinking their operations and processes?
Becoming more customer-centric
When gathering data about customers, Kelly suggests brokers ask themselves the following questions:
• What information do you want to capture?
• How do you want to capture it?
• What do you want to do with it?
Measuring customer responses is also a critical component of becoming more customer-centric. This can be done via a range of methods, including face-to-face or over the phone feedback; client surveys such as Survey Monkey; Campaign Monitor; or the NPS (Net Promoter Score), which measures customer loyalty.
As Kelly says: “There’s now an incredible array of technology that brokers can tap into to get feedback from clients.” And if resourcing is an issue, collating feedback can be outsourced quickly and cost-effectively using services such as Upwork.
Lastly, to ensure the customer stays at the centre of your business, EY Partner PI Advisory Walter Poetscher recommends that companies co-design and co-develop customer-centric initiatives with their customers.
There are various ways of doing this, including using focus groups, surveys, and even incentivising customers to come into the business operation to help design and build processes – although Poetscher admits that the latter strategy is utilised a lot more in the US than in Australia right now.
Still, Poetscher stresses that customer centricity isn’t just redesigning the customer experience of your existing process. Brokers and insurers should think about the customer’s broader need for protection.
“The customer’s journey starts long before they take out an insurance policy,” he says.
Traditionally, the insurance industry has had low levels of customer engagement.
But the balance of power is shifting from insurer to insured; propelling the industry from product-centric to customer-centric.
Although technology has caused this massive change, it’s also part of the solution. As Ravi Malhotra says: “The very things that are causing disruption – data, technology and digital platforms – can be utilised by brokers to stay relevant.”
Because, as a 2015 Accenture report, titled Digital Insurance Era: Stretch Your Boundaries, noted: “The objective of insurance has always been to manage the risks inherent in growth, progress and innovation, and that is a purpose that is more relevant than ever in a world of accelerated change.”
The difference now is that the focus is no longer on the insurance policy, but on the insurance customer.