I am fortunate enough to work with some of our industry’s most forward-thinking, innovative leaders on a regular basis. Their insight has shown me that top organizations recognize our industry’s shift from a risk focus to a customer-centered approach, and they are aligning their teams, talent, and technology to support that change.
So what, then, is the key difference between CX and CE, and why is it such an important part of modern insurers’ game plans?
- CX is primarily derived from the sum of past experiences, and largely influenced by the last transaction the customer had with your organization.
- CE, inversely, looks forward. It’s a constantly evolving strategy supported by data that dictates how you continue to keep the customer engaged with your organization (vs. your competitors’ organizations.)
Where do CX and CE intersect? While you could stand up a customer experience with minimal focus on engagement, the actual experience you are delivering might not achieve its intended goal. The relationship is symbiotic. Understanding how your customers want to engage should always drive the experience you create — and a better experience will, in turn, drive better engagement.
Following are some key insights I’ve learned about the relationship between CX and CE as Sureify has helped carriers define and implement these initiatives. I’ll also provide tactics you can use to align your digital strategy to support both.
Understanding the Differences: CX vs CE
Modern digital capability across all industries has led to perfection-hungry consumers. That means that, in life insurance, every department, every system, and every process must be geared toward making the customer experience – each customer experience – exceed expectations. Only companies that reach that standard can expect the kind of ongoing engagement that truly maximizes the value of the relationship with their customers.
As I work with life insurers advancing into the digital landscape, I have come to the conclusion that it boils down to this: customer experience (the total journey a customer has based on the sum of interactions and capitalizing on the last interaction) must be positive for customer engagement (the long-term process of building loyalty, confidence and appreciation) to take root.
Customer Experience = Company Existence in 2021
A more strategic focus on the customer has become increasingly prevalent in the past few years with insurers realizing that as competition increases, price and product alone will no longer dictate a competitive advantage. The historical experience of a policyholder being in contact with their insurer a couple of times a year — most likely for billing, and through postal mail or a call center — is becoming something of a relic. Customers are becoming increasingly sensitive to the experience of interacting with a business, and modern technology has driven expectations far beyond the legacy customer experience. Therefore, the end goal for CX, as a recent study from Walker points out, should be a “shift from silos to a journey.”
It is well worth the effort and expense required to focus extensively on each customer’s wants and needs when it comes to experience. 84% of companies that work to improve their customer experience report an increase in their revenue. And companies that have embraced digital transformation are 26% more profitable than their peers.
Investing in the customer experience isn’t new to the insurance industry. Back in 2016, McKinsey pointed out that superior customer experience could be a key catalyst for growth and that, “establishing cross-functional, multichannel customer experiences should be a CEO and board-level priority.” In fact, our own research shows that 17 of the 20 largest life insurance companies currently have an executive at the level of AVP or higher with “Customer Experience” in their titles.
Clearly, the idea of the customer-focused insurer is here to stay – but what exactly does that mean? How can insurers become truly customer-centric?
At Sureify, we view the customer experience as the opportunity for carriers to build a continuous partnership with their customers — one that includes every interaction and transaction throughout the life of a policyholder. The sum of these interactions creates a perception of your organization that sets it above other companies they do business with, and the better the experience, the more likely it is that there will be a subsequent interaction. A survey by EY found that 40% of consumers decide to continue insurer relationships based on the quality of the experience.
Additionally, the most successful companies today add an element that would not have been possible just a few years ago – seamlessness. Building a positive experience must begin with understanding who your customers are as individuals, and how they buy from you. A Forresters study noted that to “make sustainable CX gains, insurers must become more rigorous in identifying where customers struggle, by leveraging research and insights.” Partners like Sureify and others in the insurtech ecosystem can provide guidance on building digital and data-enabled processes that serve as a solid foundation for the desired customer experience. There are many paths to achieving a seamless experience, and it’s our belief that the customer journey, not the complexity of the backend systems, should dictate the experience.
If you’re ready to reinvent the customer experience you offer, here are three things you can do right now:
Spend time understanding your buyer’s journey.
Once upon a time, insurance was “sold and not bought.” It was up to an agent to convince buyers at critical times in life that insurance was necessary and could protect assets.
Today, the life events that have historically driven policy purchases still apply – things like buying a home, having a baby or starting a new job — inspire the quest for financial protection. But with the advent of data collection and analysis, distribution has become a much wider net, and potential buyers may be searching for different kinds of information and answers.
Are you prepared to provide information and next steps effortlessly –regardless of the point of entry – and to guide the journey through the process?
Prioritize current high-volume experiences
It may seem very obvious, but the easiest way to impact your customer’s experience is to focus on the places where your customers need you most.
- Where are they interacting with your organization?
- What questions are they trying to answer?
- What information are they seeking?
By identifying the transactions or activities that generate the most touchpoints, you will get a pretty good idea about your customer’s journey. This analysis also serves as a good starting point on where to start with digital initiatives focused on evolving and improving the customer experience.
Connect experiences across the continuum.
Each experience a customer has with you should accomplish two things:
- It should provide what is being sought (information, direction, advice, etc.) in a way that completely satisfies the customer, and
- It should personally connect the individual to you as the insurer.
The importance of making these connections through experiences can’t be overemphasized – from Forbes magazine, “87% of customers who say they had a great experience will make another purchase from the company, compared to 18% of customers who had a very poor experience.”
In other words, past performance by a company, either outstanding or abysmal, figures powerfully into the actions a customer will take going forward. That is your proof customer experience directly impacts customer engagement.
Building Engagement On the Back of Great Experience
While the customer experience is largely dictated by the last interaction or previous series of transactions, customer engagement – the “holy grail” for insurers because of its ability to build and maintain loyalty – is constantly looking forward and evolving with the changing dynamics of the intended audience. CE looks beyond individual interactions to the overall connection that is being created with the customer, and how that connection motivates continued engagement with your organization.
Customer engagement is about building the relationship for the long-term piece of the puzzle. Gallup’s recent study entitled “State of the American Consumer” found that when companies successfully engaged customers, they reported 63% lower customer attrition, 55% higher wallet share, and overall performed 23% better than their competitors. Engagement also leads to loyalty, retention and a more positive response to upsell/cross-sell initiatives.
But how can insurers build that engaging, long-term relationship in today’s digital age?
There are two major components to how CE is delivered. The first is the type of information and interaction elements that are being presented to the customer. The second is how that information is actually being delivered for consumption.
In today’s world, technology plays a key role in delivering a robust customer engagement program. In addition, technology must enable the carrier to provide the right level of CE program content, and must also provide the configuration to serve as a foundation for an evolving engagement strategy. The challenge inherent is this: a CE strategy should be ever-changing based on the evolving needs of the customer. Thus, your digital infrastructure needs to support a near infinity loop of gathering and analyzing customer data, developing insights, and redeploying new engagement points to drive behavior. A very simple example of an infinity loop demonstrating how this can work is shown below:
For CE to blossom from the seeds of experience, it’s time to:
Provide options / be holistic
What your customers find valuable is highly subjective, so it’s critical to provide a comprehensive experience and allow them to dictate their own paths and interests. A good example of this is the explosion of health and wellness technology over the past few years.
These wearables and devices are driving new, healthier habits and coaxing people to better themselves but remain fairly siloed in their approach. When complemented with something like financial fitness, the total package becomes much more powerful in providing a broader set of tools for wellness. Interests and incentives are diverse and ever changing, so rather than focusing your content or strategy too specifically in one area, it makes sense to allow the consumer a wider menu of options to let them architect their own engagement path.
The true value of different insurance products lies in their ability to fit the needs of an individual’s unique situation. One size does not fit all when it comes to engagement, and technology should enable a level of personalization to ensure the engagement experience and content feels tailored to the buyer.
Developing a personal connection requires understanding of the individual, and your digital tools should support this. Deliver information, let your customers engage, and then capture the learnings to deliver better, more personalized, content the next time – creating that infinity loop of value.
If experience is about being there with valuable information at exactly the right time, then the most critical part of driving continued engagement is enabling someone to act on that information. Prompts to “get started,” “get protected,” or “start your legacy journey” should be apparent and creatively sprinkled throughout the pre-sales experience. The digital experience needs to not only educate your customer with a continued stream of valuable information, but allow them to seamlessly take advantage of what that information is promising.
As life insurance moves forward to meet modern consumer expectations, there will be countless opportunities to engage through new and better portals. But the bottom line is this: the experience you offer, and subsequent engagement built on the foundation of that experience, won’t be measured on any metric other than the ultimate satisfaction of each individual customer.
The insurance marketplace is in the midst of a switch from a product-based to a customer-based business model. Those carriers who have already begun the process of centering themselves around the wants, needs and desires of their customers, and those ready to move forward with a clear sense of direction and agility, will differentiate themselves. Even the smallest changes toward a personalized, tailored customer experience will have the potential to set standards for the life insurance industry.