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Bold Prediction on Customer Experience

If there’s one thing management gurus like to do early in a year, it’s make predictions – and customer experience (CX) experts are no different.

But business predictions are like weather forecasts. Everybody consumes them, but rarely does anybody look back to check their accuracy.

Back in 2014, for example, 89% of companies surveyed predicted that – within two years – they’d be competing mostly on the basis of customer experience (Gartner). Yet, here we are five years after that prediction, and there’s widespread stagnation in customer experience quality (Forrester Research). Overall U.S. customer satisfaction is at the same level it was a decade ago (American Customer Satisfaction Index).

In study after study, companies say they’re going to increase their focus on customer experience. At the same time, CX gurus issue rosy annual prognostications about how that enhanced focus will manifest itself – such as in these examples, culled from prediction lists over the past couple years:

  • Companies will create more customer-centric cultures, using new recognition systems and training programs.
  • Companies will use technology to digitally transform the customer experience.
  • Companies will go the extra mile by empowering their employees to surprise and delight.
  • Companies will use robotic process automation to speed customer transactions.
  • Companies will leverage AI to automate customer interactions without making them feel mechanical.
  • Companies will break down silos and align customer experience strategies across functional domains.
  • Companies will use predictive analytics to create more personalized customer experience.
  • Companies will overhaul their voice-of-the-customer programs, relying more on text analytics of unstructured content, such as survey comments, call center recordings, social media conversations and online chat sessions.

However, despite all the expert predictions, despite all the pledges to focus on CX, the needle has not moved much for many companies. The disparity can’t just be attributed to heightened customer expectations, as even objective measures of CX maturity indicate that the vast majority of organizations lag in this regard (so much for that increased focus).

The problem is that many companies pay lip service to customer experience, pursuing it to create good annual report copy, rather than to drive fundamental changes in how they do business. When push comes to shove, CX initiatives are often subordinated to other priorities and starved for funding, according to the Qualtrics “State of Customer Experience Management” report.

That’s an unfortunate outcome, given the compelling evidence available that illustrates the ROI of a great customer experience (as well as the penalties exacted for a poor one). 

See also: The Best Boost to Customer Experience  

This is the reality in today’s business world, though, which is why there’s one bold customer experience prediction that actually has a high probability of coming true this year. That prediction is simply this: Not much will change.

Most organizations will lumber along, spinning their wheels on customer experience, discussing it endlessly, executing on minor improvements that amount to corporate window dressing, just so someone can “check the box” on their next performance review.

Most organizations will continue their navel-gazing, focusing inward on structural changes, role shifts, political infighting and inter-silo strife.

Most organizations will lose whatever little momentum they may have gained around customer experience improvement, as top executives with “Organizational Attention Deficit Disorder” spot some shiny new object that becomes the next initiative du jour.

Granted, this is quite a pessimistic outlook. But the fact is, most organizations are unremarkable, and are destined to stay that way. That’s precisely why, when a company actually does break from the pack and deliver a differentiated customer experience, it turns heads.

So, rather than obsess over what everyone else will be doing (or what the CX gurus say everyone else will be doing), focus instead on what your company can do to avoid the fate of mediocrity.

See also: How Fine Print Ruins Customer Experience  

Think about how to send a clear, unmistakable signal to the marketplace — and your workplace — that something fundamental is changing. 

A signal that you’re no longer going to do it “like we’ve always done.” 

A signal that you’re disrupting the status quo in your industry. 

A signal that you’re liberating customers from long-simmering frustrations.

A signal that you’re dispensing with the typical CX platitudes, in favor of very tangible and compelling changes that will make a difference in the lives of your customers and the employees who serve them.

It’s disheartening to say that little will change in the state of most companies’ customer experiences next year. It’s not a fait accompli, though.  If you don’t want your company to be among those validating this bold prediction, well then…  go do something bold!

You can find this article originally published here on Forbes.

5 Words That Will Undermine a CX Plan

More and more companies are seeking to differentiate themselves with an effective customer experience strategy. To advance those efforts, some firms hire highly skilled “chief customer officers” or engage expert consultants for assistance.

But there’s also a fair share of firms that choose to go it alone, proudly proclaiming that “we know what we’re doing.”

Those five words, though, could undermine the effectiveness of those firms’ customer experience (CX) improvement strategies. Why? Because there’s more to customer experience strategy than meets the eye.

It’s easy for most anyone to think they’re a customer experience expert. After all, each of us is a consumer ourselves. We know what it takes to make a customer happy – keep promises, abide by the golden rule, serve with a smile, etc.  It’s not rocket science, right?

Well, maybe not rocket science, but definitely science.

See also: Why Isn’t Customer Experience Better?  

The fact is, there’s a whole science to shaping great customer experiences and, contrary to what many business people think, it’s not all common sense. To help illustrate that – to underscore how “we know what we’re doing” could be a dangerously overconfident viewpoint – below are a few examples of customer experience strategy considerations that may surprise you:

  • What’s most important isn’t shaping customer experiences, it’s shaping customer memories. For a business to derive strategic advantage from its customer experience, people need to remember it positively. When a friend or colleague asks you – “what do you think of [Company/Product X]?” – your response is grounded in your recollection of the experience, which is actually different than the experience itself. It’s for this reason that the best CX strategies capitalize on cognitive science to shape customers’ memories more positively, thereby elevating people’s impression of the overall experience.
  • Fixing customer pain points won’t get you where you want to be. Business leaders are, by and large, fixers. They are trained early on, and subsequently coached and encouraged, to find problems and fix them. Fixing problems is a good skill to have, and many a career has been built on such aptitude. It’s also a valuable skill when managing the customer experience – after all, a customer experience with fewer pain points is a better customer experience, right? Yes, but there is a catch. Merely fixing pain points may help achieve competitive parity, but it doesn’t necessarily deliver competitive differentiation. It doesn’t make your customer experience memorable. Achieving that often requires more than just fixing existing customer touchpoints; it requires introducing entirely new ones that enhance the experience in a meaningful way.
  • What customers don’t see is as important as what they do see. Most companies focus their customer experience strategy on the live, digital and print touchpoints that people encounter when patronizing the business (call them “onstage” components). That’s entirely appropriate, but it’s also only a partial solution. Equally important are the “backstage” components – the behind-the-scenes workplace practices that help shape the mindset, behavior and engagement of company employees. From hiring profiles to training programs to compensation practices to cultural norms, these are all backstage elements that customers never see, yet they materially influence the quality of the experience delivered. The most successful customer experience strategies take this into account, balancing their attention across both the onstage and backstage parts of the equation.

If you found some or all of these operating principles eye-opening, you’re not alone. While engineering a great customer experience definitely requires a heavy dose of common sense, it also involves science and subject matter expertise that isn’t at all common.

Former U.S. Secretary of Defense Donald Rumsfeld once famously declared that there are “known knowns” (things we know we know) and there are “known unknowns” (things we know we do not know). But, he cautioned, there are also “unknown unknowns” (things we don’t know we don’t know).

See also: The Best Boost to Customer Experience  

So, if you’re a business leader launching a customer experience transformation, be wary if you hear your team confidently declare that “We know what we’re doing.” Consider that moment a coaching opportunity, and engage in a little pushback.

Challenge your team to honestly evaluate their expertise.

Challenge them to augment their CX knowledge, through books, training and other resources.

Challenge them to entertain the very real possibility that “unknown unknowns” – things they don’t realize they don’t know about CX – could sabotage their best efforts to create a winning customer experience strategy.

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

8 Key Changes for Customer Experience

Transforming the customer experience is a powerful way for an organization to shift and bring about quantum change, improving retention without huge IT investments that take years. A better customer experience will optimize operations, as well.

In all my years of working in insurance and technology, I have never experienced anything with such power and potential as changing the perspective on customer experience.

It all begins with shifting away from the traditional inside-out focus, driven by customer service, and flipping the lens toward an outside-in focus driven by empathy and the customer experience. And it does not matter who you call the customer: the policyholder or agents and other distribution partners, or even other stakeholders, as well.

See also: Customer Experience Gets a Major Facelift  

The new approach requires understanding the customers’ roles and motivations, goals and pain points to begin to have an empathy that drives a new and different operational response. That response must include a redesign for the ease and quality of customer interactions and deliver value in each and across all interactions. With empathy as an integral part of the lens, the conversation changes. With the common goal being the customer, silos are broken down, and organizations are changed. It’s quite powerful.

SMA believes that eight customer-experience areas need attention and investment as your company launches into and matures in CX. Embracing customer experience throughout an organization requires transforming traditional strategies, workflows, processes and technologies in each of the areas so that they become an organic part of who you are, what you do and how you do it. The eight areas are: Advanced UX Designs, Customer Analytics, the Voice of the Customer Empowerment, Customer-Experience-Driven Metrics, Customer Journey Mapping, the Service Blueprint, the Customer Experience Playbook and the Culture Shift from Service to Experience.

SMA has recently released a report that assesses each area in terms of insurers’ investment levels, maturity levels, the business areas that will be most affected and current or emerging trends in each area for commercial lines insurers: 8 Critical Investments for Customer Experience Excellence: State of Commercial Lines Investments, Adoption and Maturity.

How to start? Education is the first step toward advancing and embracing customer experience across the enterprise. Understanding the customer is the only sure way to be able to provide customers with the experiences that they want – and the experiences that will cement the relationship of trust and loyalty between the insurer and the customer.

See also: 3 Ways to Optimize Customer Experience  

The importance of empathy cannot be understated. Every effort made by insurers to put themselves in the shoes of the customer will result in better customer experiences. And the goal to give customers excellence in service goes beyond supplying mere satisfaction. The key is to infuse empathy into the insurer-customer relationship. And that involves caring, understanding, personalization and commitment. The technologies, resources and initiatives deployed to this end will benefit the customers – as well as insurers as they position for success in the digital, connected world.

How Insurers Are Making Connections

Spin the wheel to land on any insurance carrier’s website. Did you land on Allianz, USAA, MetLife, Radian, Traveler’s, State Farm, Protective Insurance or American Family? Do you notice anything familiar? Perhaps it’s images of smiling people, like you and me, living their lives, connecting with each other or being a family. In business today, leading organizations, from insurance, healthcare and finance to mobile and technology companies, find themselves centered on a common theme of enhancing customer experience (known as CX). It’s about relating to other people and finding commonalities in a world that is rapidly becoming disconnected.

Human emotions and the desire to connect are driving business around the world to change their focus to consumers. According to Harvard Business Review, “On a lifetime value basis, emotionally connected customers are more than twice as valuable as highly satisfied customers…. Companies deploying emotional-connection-based strategies and metrics to design, prioritize and measure the customer experience find that increasing customers’ emotional connection drives significant improvements in financial outcomes.”

People are attracted to other people – it’s human nature. Yet today, much of our connections and information are driven by technology, data, the internet and mobile phones. How do we bridge this dichotomy? We use technology to connect with other people. Insurance companies can serve as a prime example of an industry that’s being pushed to incorporate technology and data to make those human connections. Imagery can change people’s perceptions of a service or product.

Common sense? Definitely. But the next logical question is, how do companies deliver on these promises and demands of connecting. Consumers and businesses – and not just millennials – want products and services quickly, if not immediately. Behind the scenes, innovation departments, data scientists, IT departments and line of business leaders are exploring automation technology from robots (digital workers), business processes, workflow, customer support teams, engineering and other departments that can work smarter and faster.

See also: 3 Ways to Optimize Customer Experience  

Let’s look at some examples where insurance companies are improving and automating business processes. Claims processing is a department that deals with a high volume of documents, forms, packets and images. Leading insurance companies with fast response times are using intelligent technology that uses AI and machine learning. They have eradicated manual processes that slow them, namely a combination of physical paper and electronic documents, such as emails and PDFs that are not in a structured format. They use tools that automatically capture the data from claim files, can recognize different types of forms and files, categorize them and export that data into another intelligent system, such as an automated workflow or claims processing software.

I work with insurance companies all over the world who are pressing forward with digital transformation projects and are incorporating these type of automation processes. The results that insurance customers report back to us demonstrate the ability to expedite millions of documents and claims per year, decrease document preparation efforts by 50% and indexing by 75%, reduce fraud and cut improper payments by about 2%, resulting in positive ROI within six months.

The human touch is removed from these mundane, time-consuming processes, enabling insurance companies to respond to claimants or billing-related questions faster. This is improved CX, which customers don’t see, but where they reap the benefits and remain loyal. It’s the start of making the emotional connection that we all want. Now, insurance companies’ customers can relate to those happy, smiling faces they see on insurance websites.

For insurance companies, the data around CX should be top of mind. Bain & Co. surveyed close to 30,000 P&C customers and found that highly loyal insurance clients: retain at 97%, buy 25% more insurance, consolidate almost 90% of their insurance with one provider and refer 250% more than neutral clients. Bain found that loyal clients deliver 300% more lifetime value than neutral clients and 700% more value than low-loyalty clients.

See also: Bold Prediction on Customer Experience  

These numbers alone should support the move to relate to your fellow humans. And, the funny thing is, it starts with uncovering and optimizing your data. Digital transformation and automation will lead you to CX and the first start of emotional intelligence.

Who Is Your Customer; How Is the Experience?

In today’s digital world, companies have to focus on customers and their experience. No longer is it just about optimizing the business and processing the transaction; the overall experience matters for retention and renewal. It is essential to create a seamless digital experience that is tailored and personalized, based on understanding customers and their needs.

The first thing an insurer must do is define who the customer is. Depending on a company’s channel – direct, captive or independent agents – the definition becomes not only complex but political and even cultural and structural.

Historically, for many insurers whose channels have been independent agencies, the agent or broker has always been the customer. But more insurers have embraced the reality that the policyholder is also the customer. There is often a debate as to where the CX focus should be: on the policyholder or the agent? I believe insurers need to consider both as customers – different customers, but both customers. In most cases, agents own and manage the relationship with the policyholder, and the insurer provides services to the policyholder. Insurers need to embrace both agent and policyholder and the connectivity of the triad relationship, and how these relationships and connections fuel one another.

See also: Bold Prediction on Customer Experience  

Ease of doing business is the requirement for any insurance customer in today’s digital, connected world. Agents choose where to place the business based on ease of doing business (along with the relationship, product coverages and pricing).

There are a few key areas to focus on to improve the agent experience, like providing agents with the right technology solutions and tools to quickly and painlessly quote, bind, issue, endorse and renew. Agents expect it to be fast and easy to understand each insurer’s product and risk appetite and to have clear visibility into the status of all interactions between the agency and insurer – as well as the policyholder and insurer.

While the agent may have a personal relationship with the insured, insurers do interact with policyholders: making payments, changing pay plans, asking questions around a final audit invoice, having loss control visits and, of course, experience the whole claims process. The key to providing a really great customer experience for the policyholder includes providing a personalized touchpoint in any channel – whether it is paper, digital or face-to-face – and ensuring communications are easy, accurate, consistent and straightforward. Last, but not least, minimizing or even eliminating the need to call, maximizing the experience when customers do need to call to a one-call-resolution and providing the option to go to the self-service portal are all goals of the transformed customer experience.

As we look at the customer experience today, there is tremendous opportunity to transform not only the customer experience but your company, as well. As we work with insurers on their CX transformation journeys, the amount of low-hanging fruit with minimal costs and high impact for improvement to both the customer experience and the optimization of operations is incredible. But first, you must be clear as to who your customer is. Then, declare that your company is on a CX transformation journey. Now, you are ready to move forward.