This is the latest post in our series on building a new MGA program. The first three steps and an introduction can be found here.

Technology can make or break a program business strategy. As we’ve covered in previous posts, distressed classes only remain distressed for so long until that market need is met. Agencies need a way to bring products to market quickly, or risk losing valuable potential business. Technology is key, but only if you choose your system wisely.

There are four options available when creating a program. You may use the insurance carrier’s system, homegrown software, a new enterprise rollout or a custom modular ISO/NCCI-ready system. Each has its pros and cons. The following is a summary:

As you can tell from the above analysis, the custom modular system is the best fit for programs. Let’s look at the characteristics of a new MGA program and how they match up with this option.

1. Most programs today are written on an admitted basis. You therefore need a system that supports bureau content like ISO and NCCI. It should provide the latest rules, rates and forms and regular, accurate bureau content updates to remain in compliance.
2. New programs are typically available in all 50 states. You may start off selling regionally, but you’ll need the ability to move quickly into all 50 states when you’re ready to expand. If your system doesn’t give you this flexibility, you’ll end up losing valuable market share in states you can’t enter fast enough.
3. It is typical for a program writer to provide one-stop shopping for the industry it targets. Loyal agents prefer this because it is easy to access all that is needed for an account in one spot. So, you need a system that supports all or most business lines, including BOP and worker’s compensation.
4. A custom product is key for success in the specialty insurance marketplace. But you shouldn’t need to reinvent the wheel every time you create a program. Typically, 80% of the product can be straight ISO or NCCI and 20% customized. For the 80%, you need an ISO- or NCCI-supported product. For the 20%, you need a system that makes it easy to build customizations, such as endorsements, forms and rating equations.
5. Program opportunities don’t last long. If you spot one, chances are one of your competitors has seen it, too. A system that supports programs needs to be implemented quickly – ready to write business in all 50 states in as little as 90 days. A large, enterprise-based system will simply take too long to implement; by the time it’s in production, it may be too late.
6. Your program system should also be modular. You should be able to implement or change the functionality you need with no effect on the rest of your programs.
7. You also want a system that is easy to understand and quick to learn. Underwriting and rating staff are expensive and hard to find, so you will most likely draw on existing staff for your new program. Your system should have a short learning curve that makes it easy for new users to come up to speed, and your vendor should provide adequate on-site training when you need it.
8. Your program solution should easily integrate with other systems and components in your insurance environment, like agency management systems, underwriting workflow solutions and billing. Your technology provider should have proven APIs to make this connectivity seamless, fast and cost-effective.
9. Your system should come at a cost that aligns with the scale of your business. You’ve done your homework, but new programs still come with a level of uncertainty. You want a price based on premium volume, not a large, fixed upfront cost.
10. Make sure that your technology provider has robust reporting capabilities and that program data is easily accessible. Big data is the name of the game today. The more data you have at your fingertips, the better you can demonstrate to your carrier partner your ability to identify and react to trends in the market.

A final critical characteristic is the need for a well-established tech firm with a superior track record. Your vendor should have adequate resources to deliver what it promises, and a management team that supports a long-term approach to your success.

See also: How Technology Drives a ‘New Normal’  

There is a lot to consider when approaching the technology challenges of program business, and picking the right partner can mean the difference between business growth and stagnation. When it comes to program business, technology can deliver a critical competitive advantage.

Workers’ compensation systems have been a central and meaningful part of our social safety net for over 100 years. This longevity was accomplished despite social and economic change and technology revolutions, through wartime and peacetime, economic crises, etc. Two features have been central to this enviable record of continuity. The first is a fundamental and enduring premise that workers’ compensation systems should provide a fair balance between (1) adequate income benefits and timely medical care for injured workers in their time of need and (2) an affordable cost to employers, which must compete in an increasingly global marketplace. The second feature is a robust, albeit imperfect, process for redressing significant imbalances that inevitably occur from time to time.

What does change look like? When systems stray significantly out of balance, legislators and regulators are mobilized by injured stakeholders to change the laws and regulations to move systems back toward that fundamental balance. Note that the direction is “toward” a better balance — not to some specific “ideal” definition of balance. In this context, “balance” has always been and necessarily remains an amorphous concept. Sometimes, the reform process falls short, and other times it overshoots. Having a reform process that generally moves the systems in the direction of improved balance has been one key to workers’ compensation systems’ successful adaptation to many twists and turns over the course of a century.

A few examples illustrate this. In the early 1970s, the benefits paid to workers were inadequate, according to a report by a national commission appointed by President Nixon. In the ensuing decade, legislatures in many states increased statutory benefit levels. By the late 1980s, the pendulum had swung in the opposite direction. Claims costs were rising at unsustainable double-digit rates; many elected and appointed insurance regulators were unwilling to pass these large cost increases on to their employer constituents; and the availability and affordability of workers’ compensation insurance became a serious concern. Over the next decade, many state legislatures addressed key cost drivers, deregulated insurance prices and created competitive state insurance funds as both the insurers of last resort and as competitors to private sector insurers. Claims costs were reduced, insurance was more affordable for employers and insurance markets were stabilized.

This book examines these questions:

• Is there a plausible scenario in which many state workers’ compensation systems become seriously out of balance in 2030? And where the workers’ compensation reform process is unable to restore a reasonable balance?
• If so, what will be the likely causes of the imbalance? Why will the workers’ compensation reform process be unlikely to deliver effective solutions?
• What might replace state workers’ compensation systems?

When the balance in workers’ compensation systems is disturbed, the causes fall into either of two broad categories: developments outside of the workers’ compensation systems or developments within the systems. Internally generated imbalances typically involve the workers’ compensation statutes and regulations, as well as the incentives and behaviors of the system stakeholders and their agents and vendors. Externally generated imbalances result from forces like structural changes in the economy, societal norms and values, federal government actions separate from workers’ compensation or developments in the larger healthcare system.

Internally generated system imbalances are not unusual. In the past decade, several groups have raised concerns about the performance of state workers’ compensation systems. Some expressed concerns that too many state systems were not serving injured workers adequately. Other groups maintained that the systems were unnecessarily costly for employers and that alternatives may provide better benefits for workers at lower costs to employers.

In the wake of these critiques of state workers’ compensation systems, two groups convened “national conversations” among stakeholders from diverse perspectives. These conversations discussed the strengths and limitations in current state systems (IAIABC, n.d.; 2016 Workers’ Compensation Summit, 2016). Examples of the issues they suggested that should be addressed include:

• Reducing the complexity of workers’ compensation systems (both groups)
• Increasing the consistency/uniformity of state programs to reduce expenses (IAIABC)
• Emphasizing a focus on worker outcomes—e.g., return to work and medical recovery (both groups)
• Reducing the reliance on adversarial processes (both groups)
• Ensuring adequate (equitable) benefits (both groups)

These are examples of issues that are typically resolved by incremental changes to the features of existing systems—as has been done in the past. Hence the historic change process has opportunities to address these concerns and improve system balance where needed.

See also: The State of Workers’ Compensation  

The developments discussed in this book are different from these. They originate outside of the workers’ compensation systems. Because of this, they are much less amenable to solutions developed by the workers’ compensation reform process.

Scenario for the 2030s

Workers’ compensation costs triple since 2016, with no real change in benefits to injured workers. Both employers and worker advocates agree that the systems are seriously out of balance. Despite multiple attempts at workers’ compensation legislative and regulatory reforms, too many larger workers’ compensation systems remain badly out of balance.

What are the drivers of this scenario?

Demographic Change

• Baby Boomers exit the workforce at an accelerating pace, creating historic labor shortages. During labor shortages, employers lower hiring standards. Labor turnover also increases. The shortages extend to healthcare providers, delaying care for injured workers. Claim frequency increases, and disability lengthens.
• Restrictive immigration policies and practices worsen the labor shortages, magnifying the effects of the shortages on workers’ compensation systems. Automation mitigates the labor shortages but not nearly by what one might expect from reading the headlines about automation “destroying” large numbers of jobs.

Healthcare Reform

• Accelerating growth of high deductibles in nonoccupational health insurance policies leads more insured workers to shift soft tissue injury cases to the free care alternative—workers’ compensation.
• As Congress and the administration repeal and weaken key elements of the Affordable Care Act (ACA), more workers lose their health insurance— particularly those covered by Medicaid and nongroup policies. These workers will look for ways to continue coverage for many conditions. For soft tissue conditions, the free care alternative offered by workers’ compensation will be attractive. As the number of uninsured climbs, the number of cases shifted to workers’ compensation will increase.
• Fee-for-service contracts are being replaced by payment models where provider organizations assume financial risk if costs exceed targets. These contracts cover most of the care paid by commercial insurers, Medicare and Medicaid. Workers’ compensation remains fee-for-service. Providers increasingly shift soft tissue injury cases to workers’ compensation to earn the fee-for-service payments, while not counting the costs of care for these cases against the performance contracts with the other payers. Workers’ compensation claims increase.

SSDI Solvency

• Congress addresses the solvency crisis in the Social Security Disability Insurance (SSDI) program by abolishing reverse offsets. Moreover, new SSDI set-asides, akin to the Medicare set-asides, are mandated for workers’ compensation indemnity benefits. Workers’ compensation costs increase, as do the expenses involved in resolving claims.

Together, these developments raise workers’ compensation costs significantly—plausibly triple the level of 2016. Both claim frequency and cost per claim see large increases. The large increase in claim frequency is surprising because it is a stark contrast to the falling claim rates that we have come to expect over the previous several decades.

Workers’ compensation systems are seriously out of balance—costs to employers triple but benefits to injured workers have no real increase. In the past, the reform process would have moved the systems back toward balance. Yet this does not occur. Because the large cost increases arise from causes outside of the workers’ compensation systems, the typical workers’ compensation reform process has limited success in restoring balance in the systems.

Other developments outside of workers’ compensation systems also converge to create historic urgency (1) for both historic tax increases and spending cuts in virtually all government programs and (2) to improve the competitiveness of American businesses. This urgency pervades most public policy and strategic business decisions—including the search for solutions to what becomes known as the Workers’ Compensation Problem.

These external developments include:

Widespread Fiscal Distress at All Levels of Government and Millennial Voters Come of Age Politically

• We begin the repayment of the massive governmental debt and unfunded liabilities accumulated under the Baby Boom generation. This severely limits governments’ ability to maintain many current programs. Privatization and consolidation of government services increase.
• Because of the inherited public debt, millennials face the prospect of taxes doubling and historic cuts in government programs. Millennial elected officials and voters abandon many of the government budgeting norms and processes that had been used to kick the hard decisions down the road (from Boomers to millennials). Rather, they begin to make hard decisions on government spending to mitigate the impending tax increases. Given the debt that they inherited, millennials are unwilling to incur unnecessary public debt or additional unfunded liabilities that would burden future generations.

Globalization Pressures Intensify

U.S. employers face intensifying globalization pressures, driven by broadening diffusion of telecommunications technologies, especially in a handful of under- the-radar African and Asian economies that account for half of the world’s population growth. As competitors arise in emerging economies, U.S. firms are required to more often choose between aggressively reducing production costs of U.S.-made goods and services, moving production to lower-cost nations and losing business to foreign competitors.

See also: How Should Workers’ Compensation Evolve?  

Sclerotic Legislative and Regulatory Processes

The processes for improving public programs, including workers’ compensation, become increasingly sclerotic. Pragmatic problem-solving and compromise- based solutions become the exception, rather than the rule, in both legislative and executive branches at the federal and state levels. Too often, pragmatic problem-solving is replaced by all-or-nothing processes driven by ideology, camouflaged self-interest, electoral tactics and fake “facts.” This makes it more difficult to move the now out-of-balance workers’ compensation system toward a better balance.

Consider this column a sequel to my piece about life insurance. Consider the connection between promoting a policy and selling a product, because what my previous column mentions, that insurers need to better explain what they mean, has greater meaning—right now. Because my own review of how insurers advertise suggests that their advertising does not work.

The same is true of individual agents: that they are indistinguishable, that they look alike, despite their differences in appearance, that they look like a collective smile with a caption underneath; a grin with generic copy in which the words are true but the message is irrelevant.

Do not, however, blame agents for how their marketing looks. Their response is reasonable, their reaction predictable, their return on investment picayune. 

David Albanese of Ameraquest Financial Group, whom I quote in my previous column, says insurers have to invest in marketing with a force equal to what they spend creating or issuing new policies.

“Formulas work for actuaries, not sales, because marketing is not a science. The art of communication requires practice or: There can be no trials without errors and no experiments without failures. The goal is to encourage creativity over conformity, so agents can personalize their services and better serve their clients.”

Concerning Albanese’s point about marketing not being a science—amen. Amen to the fact that there is no test that will yield the same results, sparing agents from the training necessary to lead and the skills leaders need to communicate.

I understand the appeal of science because I am a scientist. But I also know that the attempt to make the unscientific scientific is both wrong, intellectually, and wrongheaded, financially.

The financial costs can be ruinous to morale, too, because when a formula does not work, when the elegance of an equation does not equate to the complex and sometimes inelegant ways in which people behave, when things fall apart—when all of these things happen at once, agents can lose confidence in themselves. Their loss can cause them to look for another line of work.

Consider the consequences of this scenario to the public.

If the most capable agents believe they are incapable of marketing their best products, if they decide to leave the insurance industry altogether, then the public will not enjoy the advice of the industry’s brightest stars and most brilliant agents.

See also: The Profits Hiding in an Agency’s Closet  

We cannot afford this situation to go from a possible outcome to a probable or inevitable disaster.

Yes—marketing matters enough for us to care about the fate of the insurance industry. It matters enough for us to do all we can, for as many as we can, so most agents can acquire the know-how and the can-do spirit that is integral to successful marketing.

With the discipline of a professional, and the will of a competitor, an insurance agent can become a good if not great marketer.

With time, the results will be conclusive, the reviews consistent, the recognition clear.

With time, agents can excel at marketing.

The insurtech movement has been underway for the better part of a decade. Now that we have entered the 2020s, it might be worth exploring what could be on the horizon for insurtech over the next 10 years.

Insurtech has evolved from its origins in the early part of the last decade (as an offshoot of the fintech movement) and quickly gained momentum over the last few years to experience a strong close in 2019. Along the way, there were rumors of its demise – maybe it was a wish made by those hoping insurtech would just go away and stop creating competition or driving the need to innovate. Along the way, there was also plenty of hype. Some even predicted massive disruption and the decline of the incumbents. But, as is often the case, the truth falls somewhere in the middle.

Viewing a snapshot of 2019 as the culmination of the first decade of insurtech is very informative. SMA’s recent research report, “Insurtech and Transformational Tech: Highlights and Insights for 2H19,” does just that. The second half of 2019, in particular, demonstrates how strong the movement is at this stage in its evolution. The number of deals is up. The funding for the second half of 2019 (and the full year) is up. Even more important is the fact that late-stage funding is dominating, signaling that insurtech winners are growing and likely here for the long term. In fact, there were eight P&C insurtech funding events in 2019 for $100 million or more.

See also: Time to ‘Flip the Bird’ on Insurtech  

So, what is ahead for the next decade? There may still be some that are rooting for insurtech to fizzle, or at least to have a smaller impact than expected. However, most are embracing insurtechs as an important part of the insurance ecosystem with roles as catalysts for innovation and change. With that background in mind, here are my top predictions for insurtech in the 2020s:

1. By 2030, we will see multiple insurtechs with over $1 billion per year in revenue.
2. The term "insurtech" will fade by mid-decade, but the impact of the movement will be lasting.
3. The next three to five years will see a flurry of M&A activity in the space.
4. Insurtech funding over the next five years will be greater than the prior 10 years combined.
5. Insurtech distributors will gain significant market share in personal lines, but agents/brokers will still dominate in commercial lines overall.
6. Insurtechs will play a major role in reshaping ecosystems for connected vehicles and smart homes, but the true revolutionary change in these areas will occur in the 2030s.

Depending on your viewpoint, these predictions might be bold. Or they might just be common sense. Prognostications of this sort are always difficult, especially looking out 10 years and especially while the world and the industry are in the midst of transformation. Therefore, you can feel free to disagree and come up with your own predictions for insurtech. But do check back in with me in 10 years to see if these predictions were fulfilled or if insurtech and the industry have gone in different directions.

A lot of the concern about artificial intelligence in the workplace appears to be based on what people have seen in cartoons, read in novels or watched in sci-fi movies, portraying a world overtaken by robots. Now that AI-based systems and applications are gaining ground, people are getting nervous about the role of machines. Will they take over our jobs?

While this seems like a perfectly logical question, it’s actually the wrong question. Instead, we should be asking what we want AI to accomplish. When we do this, it becomes more evident that, in reality, humans and machines will become partners rather than competitors.

AI Is Not About Replacement

There is no doubt that AI will affect jobs. The World Economic Forum projects that 75 million positions will disappear due to automation by 2022. Yet, its report says:

“As has been the case throughout economic history, such augmentation of existing jobs through technology is expected to create wholly new tasks — from app development to piloting drones to remotely monitoring patient health to certified care workers — opening up opportunities for an entirely new range of livelihoods for workers.”

The report goes on to predict automation will create 133 million jobs, or 58 million more jobs than are lost, within the same period. Gartner’s forecast, which focuses specifically on AI, also indicates that AI will be a net positive for employment. Starting in 2020, the scales will begin to tip in job creation’s favor, with 2 million new jobs opening up by 2025.

What this shows is that AI’s function in the workplace is not to swap humans for robots. In my view, it’s about removing the robot from humans.

Many of the tasks AI is charged with completing relate to rote responsibilities. Considerable human capital is wasted on activities that could be automated easily. By spending time on manual processes, people are not using their brains for higher-order skills like problem solving and decision-making.

PwC found that 70% of business executives believe that AI can enable people to focus on more meaningful work, while a Harvard Business Review survey showed that 36% of executives think one of the top benefits of AI is to free workers to be more creative, and 35% cited AI’s ability to help workers make better decisions. If AI-based solutions remove the mind-numbing functions of many jobs, if they can take away the parts of positions that are inherently robotic, it is a huge win.

See also: Untapped Potential of Artificial Intelligence  

The Intelligence Loop

But before AI can accomplish these aims, AI systems must be given a specific purpose. A company doesn’t just proclaim it has AI (hooray!) and, therefore, all its workers sit around thinking and conversing like some utopian society. No — AI systems must be directed to analyze historical data by someone who has created an algorithm to solve a defined problem. AI cannot exist without human guidance.

By the same token, humans get smarter based on the information they learn from machine analysis. People can then apply their higher-order skills to make decisions based on data coupled with their own knowledge base. AI systems subsequently interpret what humans do with the information generated; they in turn get smarter based on these interactions, and systems are refined. This process continues whenever a query is run, new data is added and action is taken.

In this sense, AI systems and the humans who leverage them become co-dependent. Work improves as machines learn more, sparking a continuous loop. This loop maximizes both artificial and human intelligences, producing what PwC dubbed the “man-machine hybrid,” which is “more powerful than either entity on its own.”

Practically Speaking

The best way to understand how this all plays out and the impact AI can have is to view it in a practical setting. AI and machine learning currently are being used in claims operations to instantly find the right providers for injured workers, formulate Medicare Set-Asides (MSAs) based on years’ worth of data in a fraction of the time, intervene in claims that could be headed to a lawyer’s office before problems escalate and much more. AI certainly furthers these tasks in their own right, but this is where we see the sum is greater than each of the parts.

As claims reps charge AI systems with looking for and synthesizing specific data points, the way claims reps and claimants interact fundamentally changes.

On one hand, claims reps are fully equipped with the right information to answer claimants’ questions and engage with them because they have access to mountains of data that an AI system can interpret. On the other hand, by not having to manually seek out all of the facets that matter in the 90-plus cases sitting on their respective desks, claims reps gain the opportunity to get a real-life picture of the people and cases to which they are assigned. They are liberated to provide care and compassion for claimants on a scale they’ve never achieved in the past. This not only alters how claims are handled but also influences the types of workers designated to handle them.

Reskill, Not Replace

Positions are evolving across nearly every industry. While most paper-pushing days are gone and replaced with electronic communication, more personal, customized processes and the customer experience will become more front and center in the new AI-driven world.

Positions will open up that embrace new skill sets. Employees who bridge the gap between domain expertise and technology will be essential, and those who can navigate between business, analytics and customer service will be in the highest demand. As workers become smarter and more dependent on machine learning, they become even more valuable to their organizations, bringing fresh, creative ideas into the workplace with unprecedented efficiency.

See also: And the Winner Is…Artificial Intelligence!  

So, machines will not take over our jobs, but they likely will remake them in wonderful and surprising ways.

As first published in Dataversity.

There is a great scene in the old movie, "The Outlaw Josie Wales," where a snake oil salesman is selling medicinal cures. The salesman encourages a character to try a sip, and the character responds, "You drink it!" The salesman stutters. The prospective customer asks, "What’s in it?" The salesman says, "Why, I don't know. I'm only the salesman."

I hear that same line from insurance producers all the time! They say, "Here's your policy." The customer says, "What’s in it?" "I don't know. I'm only the sales person. See this caveat right here? It says you have a duty to read your own policy."

I was in a meeting where the CEO of a sizeable agency proclaimed, "I just need producers who sell!" When I asked about the need to employ people who know what they are selling, the response was, "I just need people who can sell!" He wants that snake oil salesman.

Needing people to sell is not the same thing as needing people to sell the right coverages. I asked, "You're saying you need people to sell insurance without regard to coverages?" He said he was not saying that. He then revised his statement and said, “I need people to sell the right coverages." That is a big difference, but then I asked, "Are you going to invest in strong coverage education for these people?" He said, "No. I just need people to sell."

Needing people to sell the right coverages but not investing in solid, really solid, coverage education is just fanciful thinking. The reality is that, without high quality and successful education, those people are going to offer inadequate coverage at best and the wrong coverage at worst.

The question for the reader who runs an agency is, "Do you want to employ the snake oil salesman who has no idea what is in the snake oil he or she is selling?"

I see many distributor models clearly and purposely built on exactly this premise. I'm not saying it is wrong from a business perspective if one has all the legalities and E&O standards of care aligned. What I am saying is that I'm not sure there is any future in this model for live agents because technology and bots can offer inadequate coverage much more cheaply than humans.

See also: Becoming a True Professional Agent  

The question for the individual producer is, "Do you want to be seen as honest, ethical and professional, or do you want to be seen as the snake oil salesman?" Your choice. It is an either/or choice. Many people want to believe a middle ground exists. It may have existed in the past, but it will cease to exist because of changes in E&O conditions combined with how technology will offer inadequate coverages more cheaply.

The question for carriers is this, "Do you want distributors who are seen as polishing your reputation for quality or tarnishing that reputation?"

A snake oil salesman or a person who can make positive differences in the lives of people when they have had a serious loss? It is your choice.

Yoga popularity has grown tremendously in the past several years, and National Health Interview Survey data conducted by the Centers for Disease Control and Prevention (CDC) show increased usage for complementary and alternative medicine (CAM) treatments. In 2007, yoga was the seventh most commonly used CAM therapy. There has been a steady rise in the use of yoga since 2017 to treat musculoskeletal conditions; the limiting factors are cost, convenience, timing of class and access to studios.

Derived from the Sanskrit word “yuji,” meaning yoke or union, yoga is an ancient practice that brings together mind and body. Practicing yoga is said to come with many benefits for both mental and physical health. Proven yoga physical benefits are: reduced inflammation, reduced chronic pain, improved flexibility and balance, improved breathing and sleep. Yoga also has psychological benefits of decreasing stress, anxiety and depression.

If there is a work-related injury, yoga is considered self- care, as it can help prevent seeking medical care. It not only leads to better outcomes while helping to eliminate OSHA recordables and workers’ compensation claims, but it is a skill that can increase quality of life and be used to prevent work-related injuries in the future. Yoga, in comparison with spinal manipulation, physical therapy and acupuncture, may be more cost-effective because it can be delivered in a group format and self-administered at home. However, actual cost analysis of yoga interventions is needed.

This literature review suggests that yoga is effective in reducing pain and disability and improving both physical and mental function.

About one-fourth of U.S. adults report low back pain, lasting a whole day or more, with average duration of three to six months. It is the most common cause of limited activity in people below the age of 45, the second-most frequent reason for visits to a physician, the third-most common reason for surgery and the fifth-most common cause of hospital admission in the U.S., according to Spine Journal The majority of individuals with back pain and sciatica recover from an acute episode in four to eight weeks, and 80% to 90% return to work within 12 weeks post-injury. However, 25% to 80% of patients with low back pain experience some form of recurrent back problem in the following year. Among those who suffer from an episode of low back pain, one year later as many as 33% have moderate intensity pain, and 15% may have severe pain.

In other words, there is a huge opportunity for yoga to address.

See also: How to Optimize Healthcare Benefits  

Yoga Your Way is a new concept in a trend to take yoga outside of the studio and allow anyone to practice and integrate the benefits of mind-body interaction. Yoga Your Way can be brought to the worksite and paid for by the employer as a employee health benefit, providing customized yoga videos designed for a person’s ability and needs.

Studies have shown that practicing yoga 15 minutes per day leads to reduced illness and improved mental health. Yoga Your Way incorporates these principles for the  mobile workforce such as the transportation industry as well for a more stationary workforce. Custom programs can range from simple stretching done in a truck (while parked) to exercises for those overseas in a war zone.

Yoga Your Way is not only providing relief from work-related conditions but is a preventive measure to strengthen and increase endurance, overall health and mind/body awareness.

Yoga is not just stretching in a crowded studio. It it is anyone, anywhere and any time.

An old friend and colleague from the Wall Street Journal, George Anders, tweeted last week that "More than 1 million people list 'thought leader' on their LinkedIn profiles." In his mordant way, George added, "So many thoughts! So much leadership."

George, currently senior editor at large at LinkedIn, where he writes about interesting trends in work and the work force, included a link to an AI that might make a passable replacement for many of those self-designated thought leaders. See if you can tell which of these observations came from the AI and which from a white paper written by a "thought leader":

• "Base + low-to-medium uncertainty will emphasize the idea that you can have a high-to-medium certainty that X will happen, but a low-to-high certainty that Y will."
• "It's not about 'I'll show you how to work' or 'I'll show you how to code' or 'I'll give you the ball' or 'I'll take care of all of that for you' or 'I'll guide you in all of that.' It's about 'I'll guide you in all those areas and more.'"
• "Evolving risks have impacted the daily operations of insurance carriers worldwide and carriers are handling a rising volume of insurance claims, which is taxing human resources and, in many instances, demanding improved industry methodology."

If you guessed that the final example, the insurance-specific one, came from an actual human, you win. That example took a real insight—that risks are evolving, and claims are increasing, so insurers need new skills and methodologies—and simply fuzzed up the thought with corporate-speak, while the AI just sort of swam in circles. But, at least to my eyes and ear, the "thought leader" didn't outpace the AI by much. 

There are loads of actual thought leaders in the insurance world, and I highlight as many of them as I can on the ITL platform. But it feels to me like lots of companies and people aren't even trying to get past the buzzwords. Much of what I read these days talks blithely of transformation and disruption, then tosses in a few references to customer-centricity, sprinkles on some fairy dust about AI, blockchain, the IoT or robotic process automation and declares the industry's problems solved.

And don't get me started about the linguistic exertions that companies go through to try to make it sound like they're innovating left, right and center, when they're mostly in same-old, same-old mode. Some white papers I see use the word "new" so often that the writer must get a bonus for every time it appears. My (least) favorite is the frequent talk of "new innovations"—as opposed to old innovations. "Proactively" is a close second to "new." Almost all verbs are actions, but companies puff up reports by adding the adverb "actively," so we know that they're actively taking their actions. That no longer seems to be enough, so "pro-" gets added for emphasis—companies are actively, actively taking their actions.

I realize that innovation in insurance has hit a bit of a plateau. Some of the really radical ideas, such as peer-to-peer funding, haven't proved practical at scale. There hasn't yet been an invasion by Big Tech, because of the insurance industry's regulation and heavy capital requirements. Even the ferment in the insurtech movement has settled some—investment continues to climb but is increasingly focused more narrowly, on the companies that seem to be emerging as winners.

But, having watched digital innovation up close since the early days of the personal computer, I assure you that the journey in insurance is just beginning—and will move a lot faster if we commit to moving beyond the buzzwords and self-congratulatory verbiage and collaborate on real insights.

We need people like Jon Picoult and Barry Rabkin to keep us honest—Jon recently wrote about his bold prediction for the customer experience, that companies will talk a lot and not do much, while Barry wrote that, on a scale of 1 to 10, innovation in the industry this year won't exceed a 2. 

We also need to push deeper into the buzzwords, so we see what's working and what isn't, and as an industry can see where to try next—such as in this piece on three use cases emerging for blockchain, or my own attempt on a blockchain update earlier this month.

Now isn't the time to pat ourselves on the back for how far we've come. Now is the time to take what we've learned and build on it.

Otherwise, we'll just be stuck with transforming the industry by proactively producing new innovations.

Cheers,

Paul Carroll
Editor-in-Chief

Even in the healthiest of economies, individual businesses may face budget cuts due to poor sales, expense increases or other factors. Oftentimes, one of the first places businesses look to tighten their purse strings is in marketing and customer experience.

Here are some strategies to deal with budget cuts when they hit your customer experience program.

Maintain a Customer-Centric Mentality

“If your company is forced to reduce their CX budget, there are still ways that the CX team can drive ROI for the company,” said Fabrice Martin, Clarabridge chief product officer. “A customer-centric mentality across different sectors of the business and finding ways to make small changes to improve CX is a first layer that organizations should consider.”

Martin recommended analyzing your existing customer data to identify the leading reasons people call into a contact center, then develop solutions to deflect those calls to lower-cost channels such as chat, messaging or self-service. Additionally, you can use existing data to drive new revenue streams -- for example, working closely with the marketing team to improve the messaging, targeting and effectiveness of their campaigns. You can also work with the product team to ensure the desirability and quality of products.

“Once you identify areas of improvement, share those insights across the company to help catalyze decisions that will save money, open up new revenue streams and reduce risk,” Martin said. “With leaders from every sector of the business coming together to make small changes to improve the customer experience, the whole organization can continue to provide positive customer experiences without breaking the bank. In my experience, the key to maintaining strong CX with minimal resources is to identify the program’s primary objectives –– and then implement strategies that can be shared across the organization.”

See also:  Key Changes for Customer Experience  

Use Data to Establish CX Priorities 

The best strategy for maintaining a strong customer experience despite budget cuts is ensuring the cuts don't affect the most important aspects of the CX, according to Matthew Edgar, partner and consultant with Elementive. “This is harder to do than say because it requires having clear data to prove which areas of the website and other marketing campaigns most directly influence the experience customers have. It requires looking at marketing channels not based on conversions or revenue, but on how those marketing channels correlate with metrics like customer satisfaction or customer loyalty.”

For example, if you find that your email marketing drives the highest amount of customer loyalty (as measured by site engagement, repeat sales, referrals, etc.), then email marketing should be the least affected by budget cuts, Edgar added. Of course, you can get (and likely need to get) more granular as you cut the budgets.

Focus on Expense Reduction

“When budgets are cut and CX improvement efforts are jeopardized, one strategy for protecting those CX investments is to focus on the expense-reducing (rather than revenue-enhancing) impact of a great CX,” said Jon Picoult, founder and principal of Watermark Consulting.

Conventional wisdom suggests an enhanced CX comes at greater expense, but that’s not always the case, Picoult added. “The fact is, a better experience and lower costs can actually go hand-in-hand.”

Sub-par customer interactions invariably trigger additional customer contacts that are simply unnecessary (e.g., follow-up calls from customers who didn’t receive a timely call back, new calls from customers who can’t understand a bill or proposal they received), Picoult explained.

“Focusing your CX initiatives to more effectively bring in new customers and remove needless points of sales friction are important strategies for marketing teams to ensure budget cuts have minimal effect on sales performance,” added Jake Levant, vice president of marketing at Lightico. “Customers don’t like to waste time being bounced around between channels, or being asked to perform inconvenient tasks like print, scan or visit physical branches. These poor customer journeys cause customers to lose interest and drop out of sales funnels, ultimately resulting in lost sales. By adopting CX solutions that remove unnecessary touchpoints and create a streamlined onboarding experience for the customer, companies move new business through the pipeline quickly and, in turn, see a steadier revenue stream."

See also: The Best Boost to Customer Experience  

Studies suggest that, at most companies, as many as a third of all customer contacts are unnecessary — generated only because the customer had a failed or unfulfilling prior interaction, according to Picoult. Organizations with large customer bases can have hundreds of thousands of these unneeded transactions. If marketing can eliminate this expense, marketing may convince the CFO to restore the budget for selected CX improvement activities.

Bring Your CX Case to the C-Suite

When budget cuts are looming, you have to sell CX to those with the knives. Typically, this is the executives, said Shayne Sherman, CEO of TechLoris. “When dealing with executives, there are a few key points to hit. Trust me, I am one.”

• Talk about the company's future. Executives deal in the long term because that's what investors care about.
• Mention customer churn. So much of marketing is about getting new customers. If your CX is shored up, you'll keep those customers once you get them, and they'll help bring in others.
• Make it tangible. Show the executives a plan and tell them whose head is on the chopping block. It's easier for them to buy something if it's concrete and not a bunch of platitudes.

By hitting these, you're more likely to keep the budget you have and maybe get a little boost in the process, according to Sherman.

For all the attention Net Promoter Score (NPS) has garnered as an instrument for gauging customer experience quality, it’s startling how many organizations implement it incorrectly.

Indeed, many of the criticisms lobbed at Net Promoter have less to do with the measure itself and more with the perverse manner by which companies use it. (Need a Net Promoter primer? Here is a clip from a recent speech.)

Net Promoter, like any performance metric, isn’t perfect. However, it can provide meaningful value to a business, provided it is implemented and administered correctly. Here are 10 tips to accomplish precisely that:

1.  Ask a follow-up question.

One of the strengths of Net Promoter is the simplicity of the measure – a gauge of customer experience quality delivered through a single “likelihood to recommend” question.

But Net Promoter surveys were never meant to be composed of a single query. Indeed, there is a second, equally important question that should be part of any NPS survey strategy, and that’s something along the lines of “What was the primary reason for the score you gave?”

That second query provides the essential information that’s needed to understand customer sentiment (not just measure it numerically) and then develop specific tactics for improving it. Absent that second, critical question — yes, you’ll have a Net Promoter Score, but you’ll have no idea what to do about it.

2.  Don’t mess with the scale.

Years of research went into the development of the Net Promoter question and response scale, yet that hasn’t stopped many NPS users from putting their own creative slant on the metric.

Fred Reichheld, the creator of NPS, spent years researching the right wording and scaling of the question to maximize its predictive capability (the degree to which improvements in the measure correlated with business growth, and declines in the measure correlated with business contraction). He ultimately settled on an 11-point scale, labeled from 0 (“Not at all likely”) to 10 (“Extremely likely”).

That’s the scale, and there’s no reason to alter it, because any changes will introduce bias into the responses. That means no color-coding (some companies display negative scale points in red, positive ones in green). No scale reversal (it’s 0 to 10, not 10 to 0). No additional labeling of scale points (with smiley faces, frown faces or other cues). No change in wording of the scale labels.

If you want to maximize the success of your Net Promoter program, don’t go rogue with the design and formatting of the NPS question itself.

3.  Don’t fixate on Detractors, exclusively.

Detractors (the individuals who say they’re not likely to recommend you) are toxic to any business. They cost more to serve, they spread negative word-of-mouth and they often suck the life out of the employees with whom they interact. For this reason, a business improvement focus on Detractors is well-placed – learning from their feedback, using it to reveal and address common customer pain points.

However, given many business leaders’ penchant for operating in a “find and fix” mode, they obsess over Detractors at the expense of everything else, glossing over the opportunities that exist to shift Passives up the Net Promoter scale, as well as to learn from (and capitalize on) existing Promoters.

For this reason, it’s important to bring a balanced focus to Net Promoter action plans. Yes, do minimize Detractors (especially if they represent a significant percentage of your customer population). But also invest time in understanding the Passive category and making improvements to turn them into Promoters (an exercise that’s typically less about fixing problems and more about finding new ways to add value).

And don’t forget about your Promoters. They can help you pinpoint strengths in your customer experience so those can be amplified and extended to other customer episodes or segments.

See also: True Value of Net Promoter Score  

4.  Use the three-legged-stool approach to NPS measurement.

There are three distinct types of Net Promoter measurements:

• Relationship measures (a point-in-time survey sent to customers, regardless of whether they had recent contact with your company).
• Transactional measures (a survey sent to customers immediately following a live or digital interaction with your company).
• Relative measures (a point-in-time blind survey, where the company collects Net Promoter data from their own customers as well as those of competitors).

Some companies view this as a mutually exclusive list and try to decide, for example, if they should run Relationship NPS Surveys or Transactional ones. The answer is yes.

Each of these NPS survey types serves a purpose. Each provides insights that the others don’t. As such, in an ideal scenario, organizations should work toward implementing Net Promoter across each of these three dimensions.

5.  Don’t overreact to normal variations in NPS.

When Net Promoter scores rise, everyone celebrates. When they fall, everyone scrambles. In truth, both of these reactions are frequently unwarranted.

There is inherent variability in any organization’s Net Promoter score. (It is, after all, based on a sample of customer opinions, collected via a survey.) It’s important to understand that inherent variability to determine if changes observed in your Net Promoter score are likely due to chance, rather than reflecting actual improvement or deterioration in the customer experience.

Should there be celebrating when Net Promoter scores rise, and soul searching when they fall? Yes, provided those swings are statistically significant and reflect true changes in customer sentiment.

6.  Recognize that it’s not about the score, it’s about the narrative.

We as a society are groomed to focus on numerical measures of performance – school grades, race times, profit targets, etc. It should come as no surprise, then, that many organizations obsess over their Net Promoter score. In reality, however, the NPS number itself is arguably the least important part of any Net Promoter program.

That’s because the score is not actionable. No matter if your NPS is 37 or 68 or -25 – the number itself doesn’t explain why, nor what you should do to improve. That critical piece of information comes from the narrative, the comments that respondents provide to explain why they gave you the score they did.

Every attempt to evaluate Net Promoter results, or to communicate them to the broader organization, should be anchored in the NPS narrative, not the NPS number.

7.  Benchmark wisely.

We as a society are also groomed to compare ourselves wih others (hence the popularity of numerical performance measures, because they make benchmarking so simple and clear-cut).

Well, not quite so simple as it relates to Net Promoter. It can actually be difficult to establish an apples-to-apples comparison when benchmarking NPS scores, because the numbers can be influenced by factors ranging from cultural norms to survey methodologies. For this reason, when you try to benchmark your NPS score against some publicly available data source, it could be a meaningless comparison.

The best Net Promoter benchmark is the one conducted against your organization’s own, past results. That’s the ultimate apples-to-apples comparison. Checking how your NPS score stacks up against legendary companies might be a fun exercise, but it definitely shouldn’t serve as your primary indicator of customer experience success.

8.  Use NPS to drive cultural change.

Companies that treat Net Promoter just as a performance metric are bound to be disappointed with their NPS implementation. Net Promoter’s value transcends performance measurement.

When rolled out correctly, Net Promoter becomes a catalyst for cultural change, because it helps create a shared organizational vocabulary (Promoters, Passives and Detractors) around customer experience excellence. It helps management to better articulate the reaction it wants to elicit from customers, and it equips staff with a behavioral shorthand that helps shape their conduct during customer interactions.

Importantly, driving cultural change through Net Promoter means that NPS education, communication and reporting must target a wide audience. If it’s only a firm’s research team that is schooled in Net Promoter, if it’s just the senior executives who see the NPS results, that necessarily limits the cultural influence (and upside) of the program.

See also: Why Isn’t Customer Experience Better?  

9.  Don’t rush to tie NPS scores to compensation.

Many companies think that the ultimate testament to the seriousness of their customer focus, the quintessential proof that executives’ emphasis on customer experience is credible – is to link their compensation to Net Promoter results.

This can be a really bad idea, on many levels. For example, if the organization doesn’t yet have a clear handle on the inherent variability of its Net Promoter score, then managers could take a pay hit (or get a pay bump) for statistically meaningless fluctuations in NPS. In addition, tying NPS to compensation can encourage unseemly behavior, such as encouraging staff to engage in “score begging” or encouraging managers to make decisions that maximize NPS at the expense of other important measures (such as profitability).

We’re not suggesting never tying NPS to compensation, but it’s a step that should be taken very carefully. In addition, there are many other tactics – short of the compensation link – that companies can employ to focus their staff on Net Promoter and highlight it as a key organizational metric.

10.  Use NPS to manage your business, not just measure it.

This is perhaps the most important difference between companies that truly leverage the power of Net Promoter versus those that use it to create good annual report copy.

In its purest form, Net Promoter isn’t just a measurement tool, it’s a management tool. What’s the difference? In the former case, NPS is used primarily to gauge performance; in the latter, it’s used to improve performance.

The key to making Net Promoter a management tool is to ensure that the collection, evaluation and follow-up on NPS data is institutionalized throughout the whole organization (and not just relegated to some market research team).

Every manager should rely on Net Promoter to provide continuous insight into customer experience quality, to help inform short- and long-term business improvements and to reveal specific incidents of customer dissatisfaction that need to be addressed and remedied. That approach (typically referred to as the Net Promoter “closed-loop process”) is a cornerstone of any successful NPS program.

You can find the article originally published here.