An imperative to excellent customer experience
Have you ever been in this situation? You’re sitting in a conference room hearing a pitch from a digital solutions provider. Even though you know your customers and your business really well, and you’re quite well-versed in technology, the company turns up with a whole glossary of terms you think you understand but people seem to be using them interchangeably. You want desperately to trust the provider, but how can you when you’re not sure of what they’re actually offering?
Jargon is everywhere in this fast-paced business world. One company’s customer experience (CX) is another’s user experience (UX) is another’s customer journey. Although these terms are all interrelated, they have distinct definitions and functions. In this blog, we will aim to demystify all of these digital terms, in the context of insurance, and focus on the customer journey, from the awareness phase through to a purchase decision and the nurturing phase.
Let’s start with some basic definitions
Customer experience (CX) – Customer experience is defined as the impression you leave with your customer, resulting in how they think of your brand, across every stage of the customer journey. Multiple touchpoints factor into the customer experience, and these touchpoints occur on a cross-functional basis.
User experience (UX) – According to ISO (International Organization of Standardization), user experience is “a person’s perceptions and responses resulting from the use and or anticipated use of a product, system or service.” In other words, it’s how you feel about every interaction you have with what’s in front of you in the moment you’re using it.
Customer journey – The customer journey, sometimes called the buyer’s journey, is the process customers go through to become aware of, consider and evaluate, and decide to purchase a new product or service. Companies define the buying stages a little differently, but basically the customer journey looks like this.
By optimising the user experience, you can provide a great overall customer experience, which can help guide people through the customer journey and ultimately convert them to customers. Once they become customers, you can keep them on the journey and work on retaining them, by nurturing them, educating them and offering a consistently positive customer experience.
The quick history of the customer journey
The customer journey can be traced back as far as society itself. Where there were humans, there was commerce, even in the form of trading a spear for a piece of ivory. But how did they know how to find the person with the best spear? And where was the closest place to find ivory?
Fast forward about 150,000 years where education has improved, technology has rapidly developed, markets are crowded with competition, and “marketing” has been invented to help companies break through.
Today, we are all consumers and our choices, in almost any category or industry, are ridiculously abundant. Price and quality have reached points where there is not much room to manoeuvre to bring customers through the door. It’s clear that businesses need to compete on something other than price or quality – and customer retention has become a thing.
Customer experience – at the heart of the competitive battle
The insurance industry is certainly no exception. After the 2008 financial crisis, non-life insurers suffered sharp drops in capital and solvency, and raising capital became exceptionally challenging at a time when insurance companies needed it most. They began focusing on business efficiency and reducing combined ratios to compete.
Then around 2013, when more and more consumers gravitated online, insurers realised their customers had a myriad of other options and nearly the same price point, and insurance became a commodity. Many insurers today realise that the war for the heart of the consumer is being waged with customer experience. They are prioritising customer retention as their key to remaining competitive.
When customer retention increases by 5%, profits increase by 25% to 95% according to research by Frederick Reichheld at Bain & Co.
How to engage people in the right place at the right time?
When the concept of the customer journey began to take hold in companies, so did a profound revelation about customers: they don’t just pop into existence when they want to make a purchase and then disappear until it’s time to buy something again. They have fully formed existences before, during and after they even become aware of your company.
So, the question becomes how to engage with this fully-formed person – catch their attention and meet their needs where they are – even before they become aware of what they need? And how do you engage with people after they become customers in a way that keeps them nurtured, satisfied and prevents them from shopping around?
The digital insurance customer journey
That, my friends, is the story of the customer journey. Now, how exactly does this relate to the digital insurer? Your customers are moving online so you have many more touchpoints with them than you had even 5 years ago. But the customer journey is more than just a series of touchpoints, it’s also about a seamless user experience. And how do you deliver a seamless user experience? By having the right tools, the right technology, and the right UX design.
According to a 2019 study by McKinsey, “a fundamental change of mindset focusing on the customer, along with operational and IT improvements, can generate a 20 to 30 percent uplift in customer satisfaction, a 10 to 20 percent improvement in employee satisfaction, and economic gains ranging from 20 to 50 percent of the cost base addressed in the various journeys .
Redesigning customer journeys is not exclusively about creating value from insurers’ core business today. It also prepares them for the future. The cost savings the process delivers will be essential if insurers are to compete with low-cost digital attackers and invest in innovative products and services.
What tools do you need to provide an excellent user experience?
If you are already a Tia, a Sapiens company, customer, you probably know that you need a stable, agile core insurance platform to support your customer journey. It needs to have an open architecture and provide a range of readily available integrations, or APIs, to industry-leading and standardised service providers. This ensures your customers can engage with your company as part of their digital ecosystem. (See more on this in the upcoming blog post about starting your ecosystem strategy).
You also need a self-service portal that your customers can access to view and buy products, change policies, file a claim, or interact with your customer service team. The portal should be easily adaptable to your brand platform with the sales flow implemented directly into your website.
*Blog originally published here.