“I want it all, and I want it now.” Who can forget this line sung by the late Queen frontman Freddie Mercury? And although this hit song was recorded in 1988, its sentiment has turned out to be a key driver of contemporary customer experience.
According to Antonia Oakes, the executive of customer experience at Old Mutual Insure, customer experience has taken over the short-term insurance industry.
“And it looks set to take over the world,” she said.
Oakes, who was voted as one of the six best global customer experience leaders across 24 countries in 2020, analysed the latest customer experience trends across industries during CN&CO’s insurance webinar, InsureTalk35, held on 24 August. Keeping your finger on the pulse of these trends, she said, provides insights into how companies need to evolve in terms of technology, products, and processes.
“Customers evolve. We, as the short-term insurance industry, have to be flexible enough to adapt to our customers – what their needs are, what they want to be protected from an asset perspective, what their risks are, how the macro- and micro-economic factors impact them… all this needs to be taken into consideration. We need to understand them in their total being,” she said.
Customer experience vs customer service
Setting the stage, Oakes clarified the difference between customer experience (CX) and customer service.
“CX is the perception that customers have of an organisation, one that is formed based on interactions across all touchpoints, people, and technology over time,” she explained. “It incorporates customers’ cognitive, affective, emotional, social, and physical responses to the brand and is generated through both functional and emotional behaviours.”
Customer service, she said, is more operational. It is a business function that is the focus of a specific group of employees concentrating on the resolution of customer requests and issues and answering questions.
“And don’t get me wrong, it’s important and part and parcel of your total customer experience management, your total customer experience as a brand. But customer service is something that is required in all organisations for when the customer experience goes wrong.”
Operating in a fast-changing and increasingly competitive industry, Oakes said insurance carriers must put the customer experience at the centre of their business strategy.
“The theory is there. But the operationalisation of the system is probably where we get stuck and where that becomes a challenge of us getting this right. So, it really means that we have to start with the customer to ensure that we get total experiences right.”
The ‘want it now’ culture
Driving the engine is consumer behaviour – what consumers are saying and what they want.
“It’s important for us to understand where our customers are coming from, where they are going but, most importantly, where they are now, and what they are looking for in an insurance carrier, what their behaviours are predicting.”
Oakes said the digital era, with social media front and centre, has given rise to the “want it now” culture. She said 80% of customers demand quicker responses from businesses, and consumers expect that brands with which they engage to understand them at a deeper level and not only at a functional level.
“And when this does not happen, the reaction is at an emotional level. So, this is why we get a high volume of complaints going to our businesses directly and even to the ombudsman.”
According to a Mendix.com study on insurance customer trends, positivity is key for insurance. One negative experience was enough for 50% of customers to switch to a competitor.
Oakes said this meant that insurers must think about how they manage their service recovery.
“We all know what the moment of truth is in short-term insurance – at claim stage. But how do we manage that from the time a customer needs short-term insurance right through to MCA changes in his entire lifecycle?”
She said it also meant that insurers’ data must be on point.
“We need to have real-time data in terms of our customer journey management. Thirty-eight percent of customers expect our staff to know who they are and the context of their query immediately. Eighty percent of buyers are more likely to make a purchase when brands offer personalised experiences.”
The ‘experience economy’
Post-Covid saw heightened digitisation and a technology drive. Oakes said this posed both disadvantages and advantages. On the one hand, it enabled companies to optimise in terms of cost management and how they can give back more to customers. On the other, when it comes to influence, social media shifted the power from the business to the customer.
Oakes said social media and smartphones have armed customers with platforms and a voice to speak up and share their experiences.
“We know that customers are key critical. They are now voting with their fingers as opposed to their feet. We see ourselves in the ‘experience economy’. Customers very quickly go to social media to share their frustrations, their joys, and their delight. And you quickly see other customers coming on board, either giving a good review of brands or not so good.”
In this zero-tolerance-for-digital-inconvenience world, customers are choosing to spend their money on experiences over things, she said.
“So, if we are going to drive digitisation and technology to optimise and enhance customer experience and how customers perceive us, let’s do it right. Let’s overlay our digital processes, designs with our customer journeys as well. Because customers expect good stuff.”
An example of “good stuff” is consumers’ embrace of the virtual world – the metaverse.
“The world of avatars is huge for market, fashion, vehicle insurance, and holidays – making and selling virtual goods. This is the now, it’s not even the future. Nike is quietly preparing for the metaverse, and I think they’ve already influenced and infiltrated that market,” said Oakes.
With digitisation and social media steering the ship, Oakes said the question is whether the short-term insurance industry is ready for this new way of doing business.
“Customers definitely want a partner in life. They want us to understand their next best life stages. They want us to understand their next life-changing moments. How do we use this deeper understanding of the customer live-stage cycle to give them the products they need?”
Look who’s talking
But what will this partner look like?
Oakes said she is constantly asked whether artificial intelligence (AI) will replace the frontline, replace humans.
“Yes and no, because as long as we have red blood flowing through our veins and we still give birth to human beings and not robots, we will always need that human touch. We will always need to understand our customers’ needs, wants, behaviours, and next best actions.”
She added that AI service would be artificial intelligence first and customers would drive all service. She said customers are now in the driving seat.
“They want self-help, they want to be in control of their claims. They want to be in control of their buying processes. They want to be in control of selecting what they need at the renewal stage. What the AI predictions are telling us is that it’s not about having all the data; it’s about doing the right things with the data.”
Conversational service, Oakes said, would be dominant and proactive, with AI replacing most frontline interactions.
“Everyone is trying to drive operational efficiencies, operational efficacy, but it’s about how we do that. So frontline interactions, reducing the wastage, ensuring that we enhance cost-to-serve, ensuring that we enhance our customer experience.”
Hyper-specialised support, provided by humans, will still be available – at a price.
“But once you get it right, you will be able to very smartly create price models that actually benefit the customers as well, not just the business.”
On the subject of costs, Oakes emphasised that personalisation, specifically, hyper-personalisation, was a very expensive strategic focus and strategy. She said, as a business, it was important to balance your costs, your budget, and your customer experience.
“But it all depends on your business strategy. A key fundamental of customer experience, design strategy, is that your CX strategy needs to be aligned to your business strategy.”
