- Date: April 19, 2017
- By: Marc Blazich
We used to talk about "customer service". What happened to that?
We started thinking bigger. Clients still get "service" from us. But we've learned to zoom out and consider all of the ways businesses and customers connect.
We now consider the entire experience. Especially now that we are in the digital age.
Wikipedia defines Customer Experience as:
Customer experience (CX) is the product of an interaction between an organization and a customer over the duration of their relationship. This interaction is made up of three parts: the customer journey, the brand touch-points the customer interacts with, and the environments the customer experiences (including digital environment) during their experience.Wikipedia
Improving the entire customer experience is important for all businesses. What makes it different for insurance companies?
You Can't Hold Insurance
Insurance isn't a physical product. You can't hold it, touch it, or feel it.
Insurance is a promise. A promise is an intellectual concept. It's a shared understanding. Backed up, in the case of insurance, by documentation around what exactly all the parties are agreeing on.
But it's no wonder insurance companies invest so much in slick glossy brochures and high-dollar websites. They are trying to add a physical dimension to a product that is not physical.
Only 5-7% of automotive and homeowner policy holders in the United States file a claim any given year (source).
The other 95-97% of us could argue that the promise they have purchased from an insurance company is unfulfilled. We pay in, but never get back.
If we never "use" insurance, why not look for the cheapest option?
Insurance then becomes a commodity.
Commodities are bought and sold on price.
A race to the bottom begins.
Auto accidents. Storm damage. Health issues.
People only file insurance claims after stressful events. Give them an awesome experience in that moment and you'll create a customer for life.
Customer retention in the face of selling what can be perceived as a nonphysical commodity is the primary reason insurance providers need to dedicate serious resources to improving their customer experience.
Customer retention isn't the only reason for improving your customer experience.
Here are four more:
- Increases Referrals
When you have a great experience with a business, what do you do? You tell your friends. You mention it as a counterpoint when someone is complaining about the experience they had. Give your customers a reason to talk about you.
- Competitive Advantage
It's a fair bet many of your competitors aren't investing in CX yet. Others are well ahead of you. Status quo is not an option if you want to achieve or maintain a competitive edge.
- Increases Your Potential Market
Look to improve your customer experience by offering tools that will get your business in front of potential customers you wouldn't otherwise reach. Apps, portals, and mobile-friendly websites will help you increase your potential market size.
- Increases Revenue
The ultimate goal with all of these efforts to improve your customer experience is to improve revenue. Happy clients stay around longer, refer friends, and ultimately bring you more income.
Can We Help?
If you are needing some fresh outside thinkers to look at your business processes and come up with ways to improve your customer experience, let us know!