Insurers hoping to enjoy accelerated growth and bottom-line profitability in the years ahead will have to face a new reality: rising customer expectations. Customers increasingly expect simplicity, 24 hour access, quick delivery, clear and relevant information and mostly importantly value for money. Companies that flourish in the digital age are the ones that can meet these higher expectations.
Consider Netflix: This video streaming service has increased prices
The key to Netflix’s success is simple: its customers are satisfied. According to an American Customer Satisfaction Report which analyzed customer satisfaction of telecommunications product and services,
When we compare how a company like Netflix approaches customer engagement with how insurance companies approach it, we notice some dramatic differences. Here are some places insurers can make easy changes:
1. Address the desire for greater transparency
Netflix makes movie recommendations to its customers in a transparent and logical manner. A new Netflix subscriber fills out a short questionnaire about their personal preferences for series, documentaries and films. From there they receive initial recommendations which are further refined based on their viewing history.
Similarly, insurance product presentment must reflect the customer’s needs or preferences, and not the broker’s. This link must be made transparent. For example, it must be clear and apparent that a particular insurance product was recommended because the customer had just bought a car or they live in a high-flood risk zone.
2. Help customers buy
Another notable differentiator is the effort undertaken by Netflix to make the process of picking a movie easy. There are millions of movies and TV shows to choose from, and one can easily be overwhelmed. To address this burden of choice, Netflix came up with a push-based approach. Instead of categorizing movies into big buckets like action, drama or documentaries, Netflix uses niche categories like “World War II Movies,” “Quirky Romance,” or “Oscar Winner.” Netflix alleviates choice overwhelm by suggesting a more manageable number of relevant titles for each person.
Similar to Netflix, insurers must invest the time and resources to address pain points in the insurance buying process. The good news for insurers is that they don’t have to invest millions of dollars to develop sophisticated recommendation algorithms like Netflix. Insurers have about 10 products on their shelves at any time. The travail lies in finding the right product that fits each person’s unique circumstances. A configurator approach makes perfect sense here. Using a well-designed, intuitive interface we can make the experience of configuring an insurance product to meet our specific needs a pleasant one. Configurators are also less costly to implement, will empower consumers to make their own decisions, and introduce more convenience and speed into the buying process. Consumers would welcome the respite from excessive and unnecessary face-to-face interactions.
3. Leverage the power of visuals
Netflix’s clever use of visuals, video thumbnails and intuitive design to efficiently present what is available makes navigating its website easy. This is strategically important as Netflix knows it has very little time to grab the attention of the customers. According to Netflix, its subscribers spend only 1.8 seconds considering each movie title before arriving at a decision.
In controlled experiments conducted by our team, the addition of visuals in the insurance digital-selling process resulted in double digit percentage increases in conversion, aggregation, and cross-selling rates. Compared to words, images have the ability to grab a customer’s attention on an instinctual level. For example to differentiate the benefits of an insurance package with passenger accident coverage from a full-auto insurance package, we can use an image of a happy family on vacation for the former and an image of an auto afficianodo next to an eye catching sports car for the latter.
4. Look out, not in
Netflix invests heavily to understand how its customers respond to its products and innovations. For example
Insurers can learn a lot from Netflix whether it is leading customers into a sales process that is more visually appealing that can grab them on an emotional level, or optimizing marketing messages that are uniquely relevant to them.
