Companies that offer best-in-class customer experiences grow faster and more profitably. To reach this level, insurers must relentlessly improve customer journeys across channels and business functions.
The difference between great and poor customer service, according to a recent McKinsey & Company article, The growth engine: Superior customer experience in insurance, has always been clear, and businesses on the wrong end of this spectrum usually pay a price. This is as true for insurance as it is for any other customer-facing business.
What does global research firm McKinsey share as key points for the customer experience in the insurance market at this time?
- Today, the consequences of subpar service are amplified by the speed and reach of social media. One poorly handled claim, one mistake captured on a smart phone, can escalate quickly into a brand-damaging crisis. This is just one reason firms across all industries should increase their focus on providing great customer experience.
- Providing a strong customer experience is not just about reducing the risk of customer service mishaps. It is increasingly a way for companies in competitive markets to distinguish their brands. Why? Due to the Internet, aggregators, and social media, shoppers know more than ever about coverage, prices, and services.
- Delivering a superior customer experience takes more than developing a mobile app or adding call center staff. It requires significant investments, relentless improvements, and collaboration across customer channels and business functions, from distribution and underwriting to claims handling.
- Many insurers look at each customer touchpoint, from visiting the website to calling an agent, as a discrete event. But customers see those events as steps in a single journey to meet an important need, such as protecting themselves and their families or recovering from an accident.
- Improving customer satisfaction can be an engine of profitable growth, but it demands a common vision and new levels of coordination across historically strong organizational silos. Establishing cross-functional, multichannel customer experiences should be a CEO and board-level priority.
- In this context, digital tools are unlocking new opportunities for insurers. For example, since more than 80 percent of shoppers now touch a digital channel at least once throughout their shopping journey, carriers can find new ways to engage customers efficiently and effectively with personalized messages, and improve speed, service, and consistency to raise satisfaction.
Digitized Customer Experience
McKinsey’s global research across industries shows that improving the customer experience can do far more to drive profitable growth than raising advertising spending or lowering prices.
Some executives may still see insurance as a low-engagement, disintermediated category, but analytics prove that in an industry where profits are highly concentrated, leading carriers are delivering customer experiences that inspire loyalty and attract new customers frustrated by their experiences with their current carriers.
The main reason so many companies fail to improve customer journeys? Understanding what customers value is not an easy task.
According to McKinsey, identifying what drives customer satisfaction and translating it into operational performance improvements requires deep customer insights, solid analytics, and modeling the most important customer journeys, with cross-functional ownership and multichannel, end-to-end management.