Tag Archives: customer experience

Key to Better CX: Think Like NTSB

Airlines are rarely held up as models of customer experience (CX) excellence, but, in one important respect, the aviation industry actually deserves that recognition.

At many airlines, the traveler experience leaves a lot to be desired. People are subjected to a host of annoyances and indignities, from baggage charges to ticket change fees, from cramped seating to overbooking.

But one aspect of the airline customer experience is remarkably good, and consistently getting even better: the industry’s discipline in identifying and addressing the causes of accidents.

Say what you want about the awfulness of air travel, but it does have one undeniably redeeming quality: It’s really safe. While commercial airline accidents obviously garner a lot of media attention, they are extremely rare. Accounting for just 0.006 deaths per billion miles of travel, flying is the safest form of transportation out there, far safer than driving.

We were recently reminded of this, when a United Airlines plane suffered an engine failure moments after departing Denver International Airport. Pieces of the engine rained down on a Denver suburb. Fortunately, no one was hurt on the ground, nor on the plane, which quickly returned to the airport and made an emergency landing.

Within hours of the incident, the National Transportation Safety Board’s (NTSB) “Go Team” was mobilized, and it’s from their tireless work that all businesses can learn a valuable lesson.

Established in 1967, the NTSB is an independent government agency that investigates all civil aviation accidents, as well as major incidents involving other forms of transportation (such as train derailments).

The Go Team is a cornerstone of the NTSB’s investigative process. Ready to travel anywhere in the world at a moment’s notice, the team includes a variety of specialists – in aircraft structure, engines, hydraulic systems, crew performance and even air traffic control. They all descend on the accident site to piece together what happened and to determine what went wrong.

Within a matter of days, the NTSB issues a preliminary report. (An official, final report can take months if not years to publish, depending on the complexity of the incident.)

See also: 9 Months on: COVID and Workers’ Comp

But here’s the most important part: Based on its investigation, the NTSB releases safety recommendations, which can then be turned into “airworthiness directives” by the Federal Aviation Administration (FAA). Those directives, which can be issued on an emergency basis if necessary, establish legally enforceable rules that can dictate anything from aircraft design changes (which would be handled by the manufacturer) to maintenance procedure enhancements (which would be handled by the airline).

What does that disciplined process of investigating aviation accidents and addressing their root causes yield? Decades of consistent improvement in the civil aviation fatality rate, with the five-year moving average hitting an all-time low in 2019 (despite a marked increase in the number of flights).

Now, imagine if the above graph were charting the failure rate for your company’s customer experience, perhaps measured through product defects, complaints or some other indication of an experience gone wrong.

Because that’s really what the NTSB Go Team (and other countries’ aviation safety agencies) do. They root out the underlying cause of a failure in the experience. Granted, in the case of the NTSB, they’re looking at failures that can be grave, resulting in harm to dozens if not hundreds of passengers. But the value of the NTSB’s approach is applicable to any business, regardless of product or service sold.

Think of it this way: There are a finite number of reasons why an aircraft will suffer an operational failure. By rigorously investigating every failure, and directing aviation partners to pursue remedial action, the NTSB and FAA have gradually narrowed the list of potential failure points. Hence the remarkable and steady long-term decline in accident rates.

The same logic applies to your business. There are a finite number of reasons why your customer experience may fail, from a product design flaw to an outdated website link to an inaccurate instruction sheet. There may be a long list, but it is a finite list.

You would be remiss then, if you didn’t take the opportunity to investigate failures when they occur, pinpoint the root cause and address the underlying issue. Only by doing so can you start to check items off of that finite list and begin removing potential sources of experience failure from your customers’ lives.

To bring the NTSB’s proven approach to your organization, keep three things in mind:

  • Invest in investigation. When experience failures arise, people’s focus is (rightly) on solving the problem for the affected customer. Once that’s done, though, organizations just move on to the next task – answering the next call, resolving the next complaint, manufacturing the next widget. Resist that temptation. Culturally, people in your organization must understand that an essential part of experience recovery is asking yourself, “How did my customer even end up in this situation?”
  • Turn insights into action. It doesn’t help anyone if a field sales rep or a call center agent figures out the root cause of a customer experience failure, but then doesn’t have an outlet to communicate that to people who can do something about it. After all, the NTSB’s investigations would be pointless without their safety recommendations and the FAA’s associated airworthiness directives. Make sure there is a clear avenue for your staff to share their findings with those who can drive change, such as a manager or an internal CX improvement team.
  • Make it about progress, not punishment. Interestingly, conclusions from an NTSB investigation cannot be entered as evidence in a court of law. That is by design: The architects of the NTSB wanted the organization to be viewed as an independent party, focused on preventing future accidents, not facilitating litigation. In the business arena, staff need to be forthcoming to assist with root cause analysis. If they sense that the exercise is punitive, they’ll likely be reluctant to participate in a genuine way. Keep the exercise constructive, with an emphasis on continuous CX improvement.

Every company, even legendary ones, has to occasionally deal with customer experience failures. What separates the good from the great is how the organization approaches the resolution of those issues. Does it fix the problem for just one customer, or does it address the problem for all customers in the future. The NTSB has certainly demonstrated its proficiency in the latter approach, chipping away at root causes and turning air travel into the safest transportation experience on the planet.

See also: COVID, and How to Pivot to Innovation

So, the next time your organization encounters a customer experience failure, ask yourself, “Who’s on our Go Team?” Whether it’s a responsibility that lies with a dedicated unit, or an accountability that’s embedded in every staff member’s role – ensure this investigative work consistently gets done, because it’s that discipline that will keep your business flying higher.

A version of this article originally appeared on Forbes.com.

Why CX Must Trump Efficiency

There isn’t an insurance business in the land that isn’t talking about digital transformation. Whether talking about AI, robotics or platforms, the majority of the industry is confident it’s heading toward a brightly lit, digital future.

The motivation for transformation? We are told customers are demanding a better experience: an interaction that is quick, clean and gets the job done with minimal fuss.

But, for all the effort made, the customer experience in insurance is fundamentally the same as it was 10 or 15 years ago – it’s still based on call centers. I think that is because, while the stated driver for digital change may be the customer, its primary purpose has been to reduce costs.

That efficiency-first approach has resulted in many organizations looking to webforms to digitize their customer-facing processes.

Webforms do a decent job leveraging digitalization to automate the beginning of processes normally done manually. Yet any claim coming from a webform still requires the capable hands of an operations employee, who will perform the rest of the process and communicate the outcome to the customer. In addition, webforms can’t converse — reducing them, essentially, to digital monologue. While customers want a quick, hassle-free experience, many want that done through conversation of some kind. Conversations are comforting, familiar and create a sense of engagement that a static form can never replicate. 

A true digital experience is one that takes all the benefits of a one-to-one conversation and automates it using conversational process automation (CPA). That is the world that webforms were trying to create but failed to produce because of the focus on efficiency.

Source

CPA leverages a chatbot conversational interface to deliver an efficient customer experience, thinking about the customer first while saving cost. It allows for the execution of high-value, customer-facing processes, integrated into insurance platforms and systems and complying with security and audit requirements.

CPA will, I believe, bring the digital change that so many seek. They can replicate the conversational style and effectiveness of a human call handler for the vast majority of recurrent insurance interactions – from quote and buy through to claim notification. 

CPA has the capacity to handle call volumes that only a very large, very expensive call center could match. Of course, there are limits to what CPA can currently do, but it is improving all the time — getting smarter at predicting queries, reacting to something that doesn’t fit into the box and leading the customer through complex processes. Webforms, for all their value, can never do that. 

As we collect more and more data through CPA, performance becomes more accurate and, according to a report from IT advisory firm Gartner, by 2022 70% of white-collar workers will interact with conversational platforms on a daily basis. 

See also: Insurtechs’ Role in Transformation

The combination of process automation and superior customer experience will drive efficiencies. A recent report by McKinsey estimates that, in the claims process alone, automation could reduce the cost of that journey by as much as 30%.

For insurance to be part of that digital future and to reap its rewards, the industry has to have customer experience as its main motivator, replicating all the value that a one-to-one conversation brings and putting the customer in control of the experience while keeping costs to a minimum.

If we persist in letting costs saving alone drive transformation, we are going to end up with fancier, more expensive tools than webforms that will deliver marginal efficiency while continuing to leave customers frustrated. And that would be a failure of purpose and progress.

3 Trends That Defined 2020

As the New Year begins, the time for reflection has arrived. After a year that nobody could have predicted, I look to summarize three defining trends that developed last year and give my own prediction about the future of insurance as we begin the journey of 2021.

1. COVID-19 compelling the need for agility

Falling equity markets. Historically low interest rates. Shrinking new-business volumes. Reductions in consumer spending. The impact of COVID-19 within the insurance industry has been pronounced.

Insurers face a cacophony of challenges: new rivals, increased customer expectations, stalling transformation projects – the likes of which have been detailed extensively by market analysts.

However, the impact of COVID-19 was not in bringing these challenges into being but to cast them into the light: accelerating their impact and forcing insurers to re-prioritize their goals in unfavorable market conditions.

And, while many have articulated how we got here and why the challenges happened, few are commenting on what happens next, and the road back to pre-COVID rates of growth for the industry as a whole.

New Priorities

Insurers face a transformation crisis. Many long-term digital projects are stalling. While it is impractical to undertake a capital-expense-heavy program in the era of COVID-19, the demand for digital services continues to grow.

Insurers, therefore, are faced with a contradictory impasse. The solution? Reframing digital transformation as an iterative process as opposed to a one-off wholesale solution.

By undertaking small and agile projects, with a quick time-to-value and low cost, insurers can obtain the short-term benefits that drive growth and deliver agility with low risk.

Using this methodology, insurers can continue to innovate, digitize and build capabilities in applications, cloud or low-code solutions, while not over-committing to any specific long-term objective that could carry high risk due to the volatility of the market. 

2. The Continued Rise of Customer Experience

Customer experience is not a new concern. The adage, “the customer is always right,” has been a ubiquitous element of the business lexicon since the times of Harold Selfridge back in the early 1900s.

But, today, customers demand services that are personalized to their every need and prioritize simplicity and performance, so the importance of customer experience has grown. The realization that policy admin systems are not the most valuable systems insurers possess is starting to come to the fore.

In years past, the industry was built around policy. If you were traveling on holiday, you chose a policy that best satisfied your needs. If you bought a home, you chose a policy that provided the level of cover you wanted. If you drove a car, you chose a policy that matched your driving experience. And so on and so forth. The policy was at the center of the equation, and policy admin systems were created to maintain this status quo.

See also: Designing a Digital Insurance Ecosystem

Fast-forward to the modern day. Now the customer is king, and customers want their individual needs satisfied immediately, clearly, just in time, with a personalized service, and they want to only pay for the cover they need. That is a world away from selling a standard policy a million times over to people who might (or might not) need it, either in its entirety or all of the time.

In response to this shift, insurers are attempting to change the focus of the industry and gear it toward customers, but attempting to do this with a policy admin system is the equivalent of trying to fit square pegs in round holes: It simply does not work.

Round Pegs. Round Holes.

Insurers, today, must equip themselves with the right tools to provide an exemplary service. Policy admin systems that are focused on the creation of policy remain invaluable tools but only when used appropriately.

Instead of using a back-end system to provide a front-end service, insurers are realizing that they must focus on implementing two-speed architecture; the back end focused on policy, the front end focused on the customer and each designed to communicate with the other in an open-looped system.

Through this design, policy admin systems are put to use doing what they do best, while a more strategic, adaptable, omnichannel and personalized customer relationship management system can run in the foreground, delivering customers the content and experiences they want and driving up insurers’ satisfaction rates as a result.

3. The Unrelenting Pressure of Digital Disruption

“Disruption” and “innovation” are terms often used interchangeably, but the truth is that they have very different meanings.

Innovation, makes an existing approach better, whereas disruption transforms an existing approach into something new.

For the insurance industry, digital has rapidly moved to the disruption category.  

Digital disruption – or digitization – is having such a pronounced impact on the insurance industry that it is radically changing the very essence of what it means to be insured.

Traditionally, in the event the worst happened, insurance would reimburse you to the value of the wrong you experienced, at a cost to the insurer. It was a cause-and-effect relationship.   

However, via the process of embedding new technologies into their everyday operations, insurers are moving the needle away from reactionary tactics.

Using AI-driven technology and big data in real time to more closely monitor insurance products and predict and manage claims events before they even happen, insurers are no longer merely responding to when something goes wrong; they’re helping their customers avoid it.

From Reactive to Proactive

This disruption is having a pronounced impact on the industry as a whole – as a growing number of consumers demand this protection and insurance package.

Today, insurers understand that technology holds the key to delivering this differentiated value to their customers. But acknowledging new technologies and implementing new technologies are very different propositions.

While digitization is a foregone conclusion for insurers wishing to compete in the world of tomorrow, understanding how to deploy the right technology for the right purpose is no small feat. And those really willing to compete in this new dynamic must be prepared for significant change to the systems, processes and people within their business.

See also: How Will Strategies Change in 2021?

A Complex Equation

It is, perhaps, underwhelming to describe 2020 as memorable. The term era-defining might yet serve a more accurate purpose. For insurers, the year was unpredictable at best and unmanageable at worst; a string of disruptive and unforeseen events combining to create a pressure cooker of complexity.

Today, insurance stands on the precipice of profound change, and this piece has articulated a handful of the defining trends that brought us here. But as we look to the future of the industry, my prediction is that customer experience will become the single greatest definer of success, and those insurers that best find the balance between policy and customer will reap the rewards.

To learn more, check out these insurance success stories.

COVID and Power of Personal Connections

We are at a moment in history when businesses in all sectors are rapidly reworking how they interact with customers, to see how they can remain a valuable part of people’s lives as so much is changing. The pandemic has accelerated these changes, of course. In its massive disruption of daily life, shaking people and societies out of familiar routines and forcing new ways of pursuing their professional and personal interests, COVID-19 has created a new space for changes in behavior.

The insurance industry — long known for offering peace of mind, stability and trust — is adapting. In fact, the insurance industry is expected to spend nearly $28 billion annually on customer experience solutions. But many people still lack trust in insurers. Fewer than half of those surveyed in EIS Group’s Customer Compass Report say they trust insurers to respond to their basic needs. That is troubling and should be a wake-up call.

Now is the time for insurers to check their headings and set new courses to gain the trust and satisfaction of customers. To start, insurance companies must focus on adjusting two major components found throughout the customer journey — customer experience and personalization.

Customer experience and personalization — which have been predominant concerns in retail for some years — are now only second and third to price when it comes to main reasons why people might switch insurers, according to the Customer Compass Report. A full 28% of policyholders stated that poor customer experience is a “main reason” for leaving a provider, and 20% cited lack of personalization. Getting experience and personalization right is no longer a “nice to have” for insurance providers; it is quickly becoming a crucial element of what insurers offer to customers.

As the world becomes increasingly digitized, opportunities abound. Fitness trackers, for instance, help their users with real-time insight into their health and activity — but the same data can be fed into a health or life insurance product to provide personal rewards and discounts. A few insurers, including John Hancock with its Vitality program, have been successful with this model. Similar approaches are relevant for automotive insurance, rewarding users when they avoid risky activities or drive responsibly, while giving them options for more extensive insurance if that’s what is appropriate for their lifestyle and behavior. 54% of consumers indicated they would consider car insurance they would pay for only when they drive. 60% would consider car insurance that costs less if they drive at low-risk times of the day.

See also: How Insurers Are Making Connections

Customers can be offered multiple ways of communicating, including email, self-serve interfaces and automated chatbots as well as phone and instant messaging. However, consumers have astonishingly low expectations of insurers — only 23% expect insurers to integrate their experience across mobile, web and in-person channels.

For a truly satisfying customer experience, insurers need to ensure that customers can move seamlessly between those channels as they wish. As an example, a buyer might receive some initial information about an insurance offer via email, then use a messaging app to get further details in a conversation facilitated by a chatbot. A web form would then be pre-populated with the information from that chatbot conversation, and a quote sent. At the same time, a call center would be available where a representative can see an overview of progress, if the buyer has any final questions before completing the purchase. While this example may seem commonplace for many consumer buying cycles, it is not for insurance buyers.

One truth of the digital economy is that people are willing to research and assess which products are right for them. But they are also interested in simplicity and want a “one-stop shop” for products that meet their specific needs. With data and tech accelerating faster every day due to the pandemic, insurers must embrace the challenge and seek all the potential opportunities that can improve customers’ lives.

Using Payments to Improve the CX

In an industry with infrequent customer touchpoints, like insurance, every policyholder interaction holds a lot of weight. Your organization only has so many opportunities to connect with insureds, which means one negative experience could result in policy cancellations or customer churn.

It’s imperative for insurance organizations to evaluate the one, universal touchpoint every policyholder must engage with: making premium payments. This is one of the few moments your organization has a policyholder’s attention, so evaluating and optimizing your insurance payment experience could be monumental to organizational success.

Because the policyholder payment experience is critical to the success of insurance organizations everywhere, we decided to uncover what this experience is truly like. We conducted an online survey in June 2020, through which we asked policyholders about their recent payment experiences, payment preferences and what contributes to a good user experience.

We discovered a few key points that are affecting the insurance payment experience. Here are a few of the biggest takeaways:

Policyholder retention is key

Combating customer churn and policy cancellations are well-known challenges in the insurance space – and those pain points were represented in our survey results.

To gauge overall satisfaction with their current insurance provider, we asked survey respondents how likely they were to look for a new provider in the next 12 months. In total, 45% of respondents said they are “likely” or “very likely” to search for a new insurance provider in the coming year.

The results was consistent across generations: 50% of respondents under the age of 30 and 52% of respondents ages 30-44 said they are also “likely” or “very likely” to look for a new provider.

The key takeaway: Retention and satisfaction should be major focus areas among insurance organizations.

See also: COVID-19: What Buyers Want Now

Convenience drives online payments

We dug into how respondents felt about their insurance provider’s payment experience. When asked how they chose to make their most recent insurance payment, 77% of respondents said they made an online payment, either through a one-time checkout route or automatic payments (like AutoPay). This response was consistent across all age groups; 87% of respondents under the age of 45 made their most recent insurance payment online.

payment methods

Next, we asked why this majority chose to make a payment online, rather than mailing in a check or calling their insurance provider. Overall, convenience was king.

38% of respondents chose the online option because they felt it was convenient, and a further 39% of respondents were already enrolled in AutoPay. This proclivity toward online payments is a fantastic trend for insurance providers; more insureds opting to make payments through self-service options ultimately means less work for your organization and, likely, a decrease in print and mail costs.

But, before you get too excited about those results, there is another side to that coin we must consider.

While online or AutoPay options appealed to many policyholders, we also found that payment platforms that aren’t user-friendly actually deterred online payments: 28% said they chose not to pay online because their provider’s system was too difficult to use.

So, while many insureds would prefer to make payments online, they may opt for a manual method if the online payment experience offered to them is subpar.

The key takeaway: Optimizing the online payment experience is critical; simply having an online payment option does not mean your organization is automatically providing a positive user experience.

Policyholders expect omni-channel offerings

We also wanted to get a sense of how satisfied insureds are with the omni-channel payment options (i.e. omni-channel capabilities, where you can pay a bill on your phone just as easily as you can on your laptop) their insurance provider offers. Overall, policyholders are satisfied with their options, with 46% responding “very satisfied” and 28% responding “satisfied.”

While it’s encouraging to see satisfied insureds, this feedback means a lack of omni-channel options could be a dealbreaker for your policyholders. If your organization is unable or unwilling to provide the flexibility of omni-channel offerings (which many of your competitors likely are), you could face customer turnover.

The key takeaway: Omni-channel offerings aren’t an option any more; they’re expected for insurance payments.

See also: 3 Tips for Increasing Customer Engagement

Insurance organizations can no longer afford to ignore their online payment channels – the results of our survey made that extremely clear. As one of the most frequent policyholder touchpoints, your organization’s payment experience could be the factor that determines churn rates and overall organizational success.

Simply put, optimizing your online payment channels is the best way to provide a positive policyholder experience and retain your customers.