5 roadblocks to delivering an amazing customer experience

Retail customer needs are simple: They value quality and ease of use, according to a 2018 Bain survey. But the same survey shows that most insurance organizations fail to meet those expectations. And 80% of the millennial demographic — increasingly the decision-makers for P&C — is open to switching providers if those two essentials aren’t met. What’s holding us back from delivering an exceptional experience?

Although each organization faces its own unique challenges, there are five common issues I see across P&C agencies.

1. Price

The web has made it easier for customers to compare insurance products and services, which is generally a great thing. But it also causes customers to zero in on price over quality of coverage. A J.D. Power & Associates study shows that 74% of new customers purchasing insurance will use online-shopping-comparison websites or an insurer website to obtain a quote. Loyalty has also taken a dip. thanks to the digital marketplace. In Salesforce’s 2018 State of the Connected Customer Report, 76% of respondents said it’s easier than ever to take their business elsewhere.

2. Credibility

When price drives the conversation, customers stop seeing insurance professionals as risk management experts and trusted advisors. Swiss Re estimates the global coverage gap is at $1.3 trillion, yet how can you engage your customer on purchasing sufficient coverage when you aren’t seen as the expert?

3. Time

There’s no way to improve coverage sufficiency if your people don’t have the time to speak with customers. If you’re like the typical insurance organization, inefficient processes are likely dragging top talent into low-value tasks, keeping them from building relationships with customers, cross-selling, or researching new services beyond the core offerings.

4. Speed

As an insurance professional, how many times in the last three months have you heard about somebody having a backlog issue? Probably more than a few times. The end user is starting to expect real-time service from our industry (remember Lemonade’s instantaneous claim payment in 2017?), but many insurance organizations are saddled with several weeks’ worth of backlogs. This slows down turnaround times and prevents your people from delivering the snappy service customers desire.

5. Shiny object syndrome

The pressure to keep up with InsurTechs can push some agencies to jump onto the latest tech phenomenon instead of focusing on their strengths. This year, I heard about a large broker that had implemented robotic process automation (RPA) to take over certain tasks in operations. They had believed RPA could be their silver bullet, providing them the cost and time savings they needed to compete on price and speed. Instead, a few months in, they realized RPA was far more complex and draining on their people than they had anticipated. They had to pump the brakes and refocus. Beware of any tech that sounds too good to be true.

How to address these challenges

• Recognize your strengths. There’s an intrinsic conflict in the five roadblocks: Customers are looking at price, not your expertise, while your ability to advise on risk management remains one of your strengths in the market. It becomes your job to educate customers, to take time to make client visits and to challenge their price-focused notions. It can be hard to find the time to do this, but it’s essential for an agency’s staying power.
• Find time in new ways. To overcome the time crunch, dig deep into your operations. Are the right people doing the right jobs? Are all your well-paid experts free to spend time educating customers or are they weighed down by processing work? Ways of fixing these issues include organizational assessments and implementing lean continuous improvement. If undergoing an operational audit sounds daunting, lean on the expertise of consultants or partner with reputable organizations. Customer expectations are only rising, so you can’t ignore the root causes of delays.
• Don’t lean on InsurTech as a strategy. In my experience, I see a major difference in the success of agencies that treat technology as a strategy and those that treat it as a means to an end. The latter allows a company to focus on the larger business objectives of growing revenue and improving retention, while the former tends to produce more chaos than cha-ching. Tech may help with speed, but can it replace the risk management expertise your organization has built for years, maybe even decades? You have to find a way to integrate new technology without losing sight of your customer and your key offering.

If all this sounds daunting, know that customers often report that they’re willing to pay a premium for superior customer service. They’re willing to shift on price if you’re willing to refocus on the customer experience.

Related:

• To better serve your clients, you need to better understand them – Here’s how (Podcast)
• Four ways agents and brokers can capture growth in 2019
• 14 ways insurance agencies can beat InsurTechs

Violet Xu (violet_xu@resourcepro.com) is vice president of service delivery at ReSource Pro, an operations solutions company serving the insurance industry.