Lessons Learned From eCommerce
Insurance Experts' Forum, June 24, 2014
I was shopping online this weekend. While that’s not an unusual occurrence for me, it did strike me how easy it is to buy things on line. Whether it’s Amazon — where they predict what I’m going to like, or Nordstrom, where they make it easy to filter the results and find exactly what I’m looking for, or Baby World — where I can see exactly what’s on my daughter’s registry, have it gift-wrapped and shipped for no additional charge — ecommerce sites have honed the customer experience.
And they have to. When I can get the same product at any website any individual retailer’s products are seen as indistinguishable from another. Then price becomes the primary differentiator. And when price is relatively the same regardless of where you get it, the new differentiator becomes the customer experience.
?In the world of insurance we think of the customer experience as being the claims process, the ease of self service activities such as paying a bill, and customer interactions through call centers or other modes. But until someone is actually a customer, those types of transactions don’t occur. This means the buying experience becomes critical. For personal lines that generally translates to the online experience. For commercial lines, the interaction with an agent drives the perception of the carrier. And the agent judges their experience with the carrier based on the ease of getting a quote, the responsiveness of the underwriter, and the availability of appropriate products and prices.
The perception of the buying experience is based on the last best experience across any venue — physical, mobile, or online — and across all industries. Buyers judge the insurance buying experience with the ease of buying through Amazon, Home Depot, or Nordstrom. How do these organizations excel? It’s a relentless focus on the customer experience.
A number of factors influence the perception of the customer experience.
• Convenience – Customers want the ability to buy and handle their service needs whenever they choose. On-demand buying and self-service – predominantly through digital channels such as web and mobile continue to be high priority activities with carriers investing heavily in these initiatives.
• Personalization – Customers expect that the service will be personalized to their circumstances. They expect that any information they’ve provided through one channel will be available through another. If they’ve provided information on line, they expect the call center will have access to that same information. But personalization also includes helping the customer choose the right product. Just as Amazon provides recommendations based on your buying history, or Facebook pops up ads based on your web activity, they’d like insurance companies to provide recommendations based on their risk characteristics – which is totally aligned with a carrier’s goals of cross selling.
• Transparency – There’s a reason that insurance is still an industry with a poor reputation. We are a complicated industry. Trust is built when carriers provide transparency in pricing, simplified products and a clear articulation of benefits.
None of this is rocket science. It’s why we heard so many carriers tell us at IASA this week that they are investing in initiatives to improve the customer experience. Mobile, portals, and analytics are areas that carriers are investing heavily in along with upgrading their core systems to operationalize the results.
Karlyn Carnahan is research director at Celent.
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