Automation and Customer Retention: Imperfect Together
Insurance Experts' Forum, February 11, 2010
The customer is always right—at least that’s what many of us who have dealt with the public have had drilled into our heads. Certainly that sentiment seems to be at the heart of our efforts to become more “customer-centric” in our operations.
We want very much to please our customers, and those of us in the technology arena are convinced that customers—especially young customers—will be pleased if we can just deliver services more quickly. And they probably will think that’s cool. The real question, however, is whether accelerated services delivery is enough to win their loyalty.
IVANS recently conducted a survey of insurance carriers asking about their business priorities and associated technology priorities for 2010. According to the survey, staying ahead of the competition and maintaining market share have made customer retention and lifecycle management a business imperative for protecting carrier revenue. Many insurance organizations are looking to grow organically through existing lines of business and want to push automation further along into the customer management lifecycle, so they can respond more quickly to the needs and opportunities of customers.
But let’s think about a customer’s typical interaction with an insurance company. Most of us don’t contact our agents or insurance reps unless something is wrong: a bill seems too high, we’re unsure of coverage, or we want to file a claim. That being the case, we’re probably not overjoyed at having to interact with our insurers. Of course, we want them to help us as quickly as possible, but a recent experience I had with High Point, my auto insurance company, has made me realize that—at least for me—speed is not the thing I worry about most when dealing with them.
When one of my cars was a total loss in an accident (thankfully, no one was injured), you can be sure I had many conversations with my insurer regarding the endless details that needed to be ironed our before the car’s corpse was spirited away, and I could receive payment for the damage. Not one of those conversations, however, took place via an automated system. There was lots of phone contact and some physical documents that needed to be sent, but at no time was I relegated to the horrors of an automated system that instructed me to speak or punch numbers in what surely would have been a frustrating multiple-choice exam. Similarly, I was not directed to fill out online forms or to interact with the company’s online support personnel.
Instead, I had quite a few helpful and enlightening conversations with human beings who obviously cared about getting things straightened out, and who often anticipated my needs by providing information on my coverage and walking me through every step of the process. This, my friends, was great customer service. My realization was that the thing I cared most about was that I could replace the car with a minimum of worry and uncertainty. Could the process have been faster with automated response mechanisms? It probably could have. Then again, I don’t think I would have been quite so confident about the process if it were left primarily in the control of faceless Web sites and automated answering systems.
As we were going through the process with High Point, I remarked several times to my wife that our insurance company was terrific. Services were probably not delivered as quickly as automated services could have delivered them, but they were provided quickly enough. Most important, however, the insurer made a real effort to build a relationship with me as a means to resolving problems. For that reason alone, this company has my loyalty.
Make no mistake: automated systems are useful and efficient ways to save time and money on the administrative side. When it comes to customer-facing situations, however, I’ll take human interaction with helpful and empathetic people any time. In the end, insurers should leverage automation behind the scenes to the hilt, while never forgetting that what customers want and need is help and reassurance.
Ara C. Trembly (www.aratremblytechnology.com) is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.
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