How to build a better online insurance experience
Can the online insurance-buying experience be more effective?
The insurance industry’s online buying experience is in need of a makeover.
It is common when one visits an insurer’s website to realize that all visitors are receiving identical information. Offers are explained, presented and structured in the same way regardless of the visitor’s age, income or family status. Optional or add-on products are presented uniformly to all customer segments.
This lack of differentiation and personalization is alarming, especially in an age of rising customer expectations. Today’s customers demand relevant, usable data to help them make informed decisions.
Not surprisingly, these websites fail when it comes to converting leads and up-selling. They are essentially digital brochures and do little to motivate buying behaviors, deepen relationships or offer valuable content.
Insurance products sold online need to be packaged and priced attractively. They also need to be self-explanatory. Most importantly, insurers need to introduce digital tools and curated shopping experiences. Pictures, videos, short explanations and interactive tools make selecting an insurance product a lot less painful. Up-selling and cross-selling products must be presented in an unobtrusive way to make it easy to understand.
Additionally, we have to take into consideration the human decision-maker whose decisions are subject to influences and psychological biases. People don’t always know what they want and instead of deliberate decision-making, tend to make fast, automatic and unconscious decisions.
Rethink customer segmenting
Through strategic customer studies, insurance companies can identify differences in buying preferences based on the client’s personal details such as age, gender and family status. Insurers also can customize the online buying experience for the type of browser used and take into consideration how that customer is behaving on the website, how long they stay on one page, and which information boxes they click.
An individualized online buying process can be personalized for bundling options, price range and tariff criteria. For example, in a recent consulting project for an online auto insurance digital portal, we were able to identify 13 distinct customer segments and personalize online buying experiences for each of these segments. Each segment was presented with tailored product bundling offers, price ranges, add-ons or ancillaries, and had their respective pre-settings. We were also able to personalize sales strategies targeting these customer segments for up-selling and cross-selling, and display gap coverage in instances where it was most effective.
Different customer segments received information relevant to them.
Avoid strenuous questioning
Old-fashioned online sales approaches are still used everywhere. A casual tour around the internet revealed insurance carriers regularly presenting information using static, dull — even irrelevant — visuals. Tables are crammed full of data, and websites are devoid of any useful tools.
In the digital age, an engaging, interactive online buying process supported by insurance expertise is critical if we want to effectively boost sales.
This can start with something as simple as a digitally-led questionnaire with one-click answers. We have to be cognizant that the last thing our customers want is to fill out yet another form. We can make this tiresome task fun for the customer, while at the same time collect necessary information for product recommendation and configuration. Slide bars can be used to provide a simple and intuitive way to enter age. After clicking on a “yes” or “no” answer, the customer can be transitioned to the next page in a fun, creative way.
Displaying useful facts and using appealing graphics to communicate the benefits of relevant insurance products also can keep the online visitor engaged during this phase. Dynamic graphics can explain products to customers in a non-technical, easy-to-understand manner.
We must create a digital customer experience that can explain, configure and illustrate product benefits immediately without requiring a sustained effort on the part of the customer to decipher, calculate and rationalize if the product is necessary, best quality and a good value. This ensures the online digital buying process in intuitive and satisfying for the customers.
Interactivity is key
The online sales process should guide the customer to the right product and offer recommendations early. The customer should not be left un-aided to navigate an exhaustive list of offerings. The length of the process and the number of decisions that the customer has to make should also be chosen deliberately. Following the final question, it is helpful to summarize all of the data provided by the customer.
It is also critical at this stage to introduce a high degree of interactivity where the customer can make adjustments to their data and change priorities. This dramatically transforms the online customer experience and gives the customer a feeling of transparency about the process.
Gaps can be clearly shown and can serve as a gateway for follow-up discussions. Pop-ups on fact-based statistics provide another topic for conversation if needed.
Willingness to pay and behavioral economics
In addition to a dynamic approach where different segments receive different information to differing degrees, and product configurations customized according to the buying segments, the online buying experience must also take into account the customer’s psychological biases, pricing sensitivities, value perceptions and willingness to pay. Offers poorly presented can heighten pricing sensitivities, leave a customer too overwhelmed or too confused to make a decision, or fail to communicate benefits in a compelling, convincing manner.
Transactional vs. consultative
Finally, it is important to differentiate between transactional and consultation-intensive business. Transactional business consists of the easy-to-understand, comparable pull-products, such as car insurance or pet liability. It is precisely here that the online channel works well. For more complex, consultative-intensive products, it is important that the online buying process can seamlessly lead customers to complete the sale with a personal consultation if needed.
Advanced digital tools, data and technology are available and accessible. There is no reason why the insurance online buying experience cannot be a more memorable and satisfying one for the customer.
Frank Gehrig (Frank.Gehrig@simon-kucher.com) is a partner in the global insurance practice of pricing, marketing and sales consultancy Simon-Kucher & Partners. These opinions are his own.
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