For insurers, improving customer experience and service quality is not only a necessity; it is also a loyalty and revenue growth opportunity. According to Forrester, if an insurance firm were to move from a below average customer experience score to an above average score, it can expect an incremental revenue up to $300 million. Insurers such as Progressive and Zurich also report a link between improvements in customer experience score and retention.
Today, the question is not whether to invest in customer experience or not, but rather where and how to. Insurers who are starting their customer experience improvement journey can accelerate their performance by addressing these four areas:
- Start with experiences that matter the most: It is generally not feasible to try and improve customer experience all at once. Because not every touch point has the same level of impact on overall experience. Instead, there should be few ‘must win battles’ defined in the organization that will have the most impact on customer experience. So, the million dollar question: how to find these ‘must win battles? One way is to run an intuitive process and to select focus areas from ‘known history’ since the organization may have the know-how on which customer journeys are most influential on loyalty or satisfaction. Another way is to take the complete picture of the customer journey and to find out pain points through a quantitative process.
- Recognize the differences between Claim Vs. No Claim customers: A customer who had no claim interaction has minimal engagement with the insurer. A customer who had a claim experience, on the other hand, starts with an adverse event in her life such as a traffic accident and goes through a rather intense engagement in time as little as a couple of weeks. The motives and loyalty creating experiences of a claim vs. non-claim customer is very different and require different customer experience strategy.
- Activate customer experience touchpoints including 3rd parties: From assistance services to repair, numbers of external parties have an impact on the customer experience primarily in the claim process. For example, a typical auto insurance customer needs to deal with various 3rd parties including, towing service, experts, car services, rental car agencies. A house insurance customer deals with plumbers, locksmiths, experts and so on. If real-time customer experience is measured with 3rd parties, problem areas and service levels can be reported back to the organizational owners, and instant actions can be taken. To receive real-time actionable insights, insurers also need to deploy transactional measurements such as Transactional NPS to collect feedback specific to that transaction. The challenge is to ensure delivery standard and consistent experience to a customer where the insurer has limited control over performance.
- Already think about improvement loops from day 1: Feedback collection without a clear definition and an implementation plan for improvement, scale down customer experience into a research activity. To make experience actionable, organizations need to ‘close the loop’ on each feedback by identifying the root cause. Furthermore, organizations must take action based on pre-defined improvement categories.
Sources: 1 Forrester, The Business Impact of Customer Experience, 2014 2 Zurich, Investor Update Presentation, 2014