Digitization of the Customer Dialog in the Insurance Industry Customer (Part 1)
The insurance industry is still taking far too few opportunities to optimize and intensify customer dialogue using digital channels. But how should insurance companies proceed? In our new series, you’ll learn step-by-step what you need to do to provide your customers with a digital service experience and retain them for the long term.
At the beginning of the journey into the digital world, strategic and methodical considerations are necessary first, and they have to take into account the experiences, requirements, and needs of insurance customers and employees. The next step is to plan and implement the digital projects, step by step. The further consequences of this series show which steps are sensible for the digitalization of the customer dialog. In this part, customer expectations and the customer journey will be considered first.
The customer and their expectations
What is the current relationship between customer and insurer? What are the customer’s expectations of an insurance company, and how can they best be accompanied along the customer journey? An overview is provided by the Digital Insurance Monitor by Arvato CRM Solutions and the Computer Science Corporation (CSC), for which 3,000 end customers and 100 insurance managers across five countries were interviewed. The study shows that customers predominantly use digital service offerings and channels to compare insurance premiums. For example, 50 percent of German customers begin searching for the right insurance product online and use comparison portals. They are also prepared to release their personal data in order to receive personalized offers tailored to their needs. However, this doesn’t mean that the insurance customer will completely turn away from the classic sales channel and migrate to the digital world. Quite the opposite: They seek the best possible connection between the two worlds. For one, they use standardized products via the digital channel, while on the other hand they like personal consultation in the future – especially for products requiring extensive explanation or advice, and for claims settlement. In other words: The insurance customer acts as a hybrid.
Insurers have to be prepared for this. Of course, there will also be a need for offers for customers still in the old world in the future. But insurers who leave everything as it was just because the customer still prefers a personal conversation with their insurance advisor in certain situations will lose: Digitization is gradually destroying old structures and traditional business models. At the same time, it offers enormous opportunities to develop new business models and better understand customer behavior in order to interact more intensively with customers, respond individually to their expectations, and offer them concrete added value. In the new digital world, insurers and customers will have a much closer relationship than was possible in the old world.
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The travel plan – the Customer Journey Map
But who exactly is the customer? Who does the insurance company want to address with its products in the first place? The typical characteristics of a customer to whom a product or service is tailored should be identified and precisely described – from their sociographic data, to their life situation, and their expectations and wishes for the insurance product.
The Customer Journey Map is the travel plan into the digital world and into a partnership relationship with the customer. It records all the experiences that the customer makes online and offline, when they come into contact with the insurance company, its products, or its customer service – both emotionally and functionally. It should consider the following steps:
The touchpoints: How does the customer become aware of the products and services? Does it happen via a classic newspaper ad, a TV advertisement, a movie theater spot, or via online channels and social media?
Engagement with the product: the phase in which a customer is more intensively involved with a product via e-mail, the website, comparison portals, or media coverage in order to arrive at a purchase decision.
The purchase process: Where does the customer buy or order the insurance product – from an insurance broker, an insurance branch, or online via an insurance portal, an app, or the company website?
Customer loyalty: What is the insurer actively doing to retain its customers in the long term and prevent a possible switch to a competitor?
The recommendation. How does the customer become a brand ambassador, who recommends special insurance products via social media or in personal conversation?
These methodical preliminary considerations – starting with the current situation of the customer dialog through the creation of a customer profile to the Customer Journey Map – are important so that digital projects along the value chain lead to the desired, positive customer experience. The subsequent steps that an insurer must take for digitization can be found in the other parts of this series.