The “experience economy” is here. It’s fundamentally changing how companies go to market, influence their buyers and engage people throughout the customer journeys.
In this brave new world, experience trumps all else — consumers’ loyalty and dollars go to experiences, not products. Indeed, a recent survey conducted by Momentum Worldwide found that 76% of customers prefer to spend their money on experiences rather than products.
This holds especially true among Generation Z – those born after 1995 – a digital-native cohort that expects businesses of all stripes to engage them with relevant, personalized and instantaneous digital content.
For insurers seeking to win over Gen Z consumers, that means seizing on innovation to differentiate themselves, and embracing the latest in technology to put their customers at the center of everything they do.
Here’s how insurers can get the formula right and gain the essential insights they need to provide Gen Z consumers what they want. By taking this focused approach, insurers can not only boost their success with younger customers, but enhance their understanding of and appeal with customers of all ages.
Gen Z’s Uniqueness
Members of Gen Z want to buy what they want, when they want and how they want. This group is totally online, mostly mobile. Immediacy is much more important than the price point for Gen Z. Car ownership is less important to them than it is to older generations, and many are renters instead of homeowners. Life without a mobile phone is virtually impossible for them – in no small part because they came of age well after the first iPhones hit the market.
Understanding and accepting these new behavioral traits is a critical ingredient to being successful in terms of customer retention, customer attraction and becoming an organization that each cohort trusts and feels valued by.
The Impact On Insurers
Will Gen Z change the paradigm of the insurance industry? The evidence seems to suggest that Gen Z will only engage in experiences that are simple, digital and real-time, and offer the personalized touch. It’s difficult to envision Gen Z not insisting on buying items when they want and how they want, like the overwhelming majority of their peer group.
Don’t be surprised to see new insurance “hubs” for Gen Z that are meaningfully branded, allowing customers to buy how and when they want.
The car industry is starting to adapt to evolving expectations. Leasing companies and manufacturers are happy to sell the same car 1,000 times, via car-sharing schemes, rather than selling 1,000 cars as rentals. Personal contract purchase, a type of hire purchase vehicle finance for individual purchasers, is quickly becoming the norm. Will we see the same for protection, where a policy is live for a period and then dormant until the need arises to make it live again, with risk assessment wholly digitally-enabled?
The technology exists and insurers have enough streams of data to mine to adjust to Gen Z. Tomorrow’s insurance leaders will leverage both to deliver a truly personalized, meaningful and valued customer experience and engagement strategy for each cohort, using customer insights.
It goes without saying that adjusting for Gen Z does not mean leaving the other generations behind. Smart insurers will be able to offer the right experience for all customers, as opposed to forcing Grandpa to navigate through a complex online experience.
This approach will necessitate channel diversification – insurers require products tailored to each cohort, but also the agility and insights to adapt to customers as they age and adapt (and as technology evolves).
Here are three other approaches that will help insurers.
- Insurers should view this new generation as an opportunity to better empower all of their customers, making them better informed and helping them achieve better outcomes.
- Companies can offer simple and transparent products that can be modified to reflect the basic reality that people’s needs can and do change throughout their lives.
- Insurers must use better customer data to inform and develop more flexible solutions that allow customers to flex across multiple covers throughout their lives.
Insurers who use these strategies can zoom toward Gen Z.