According to home insurance provider Hippo, over half of insurance customers would rather go to the dentist than communicate with their provider. This type of sentiment provides a big business opportunity, however, as insurance increasingly becomes a direct-to-consumer (D2C) business. In the next few years, many believe that the large amounts of marketing and ad dollars traditionally spent to drive traffic to mobile apps and websites will struggle to turn web visits into customers.
Insurance carriers, now more than ever, are afforded the opportunity to address friction within the customer journey as customers expect a transparent and more intuitive experience. Today’s insurance consumer embraces the right engagement at the right time. Providing certainty and clarity to customers reduces anxiety and hesitation and drives success for the customer and the business.
In 2013, Geico’s marketing budget topped $1 billion, with a majority of spending on advertising. Not much has changed. D2C newcomers have acquired early customers with design-first thinking, an emphasis on lower prices and more modern policy terms. But the approaches are meant to acquire customers; neither focuses much on engaging the customer.
According to a recent Watermark customer experience survey, CX leaders outperformed the broader market, generating a total return that was 45 points higher than the S&P 500 Index. And customer experience leaders generated a total cumulative return that was nearly three times greater than that of the “Customer Experience Laggards.” Those are numbers any CEO of a traditional insurance company or founder of a major insurtech can rally behind.
How insurance can embrace a different type of customer acquisition
For legacy insurers and a more D2C model, customer experience represents a fundamental and essential shift in mindset. By providing the lower-friction, more customer-centric experience that today’s consumers prefer, legacy insurers and insurtechs can modernize their position in the market. This can all be done by guiding the customer’s experience online through engagement.
See also: How to Earn Consumers’ Trust
Tom Super, director of J.D. Power’s insurance practice, recently noted that, “According to our 2019 J.D. Power Digital Experience Study, 37% of consumers have never spoken with their agent, and one in 10 consumers report they have never interacted with their insurance company at all.”
This clearly leaves a lot of room to grow customer engagement, and the insurance industry should look more closely at how it calculates customer lifetime value (CLV). There is an opportunity to understand where exactly customer engagement produces sales. For insurtechs and legacy providers alike, the question has become: How do you think about engagement when your customers don’t really want to be there or don’t understand exactly where to go? This is a lot different than typical direct-to-consumer marketing and brand challenges.
Creating a more direct customer experience
To win in this fast-evolving insurance marketplace, providers of all types will need to move quickly beyond branding and focus on the customer experience. The first few seconds are critical—as are all the seconds that follow. Customers will need constant reassurance that things will be explained, the next steps will be clear and the company is there for you.
The key to Guided Digital Commerce is automation for the majority of contacts and preserving your live channels for more complex inquiries. If you can give the customer the right answer to a concern the overwhelming majority of the time, you can deploy a profitable engagement solution that can reach all of your customers instead of just a few. In sometimes opaque insurance products, this is key to building effective customer engagement that supports money spent on the brand.
In practical terms, this means providing relevant guidance to help customers complete their onsite journey quickly and easily. Site design and golf tournament sponsorships are only the beginning. From the moment the customer lands on the home page, the provider should watch for signs of hesitation, struggle or opportunity. Site analytics can help the insurer understand the nature of hesitance as well as how to address it. If visitors tend to get stuck at a given point in the process, offer relevant information in context, explaining what to do and what to expect next. Keeping the customer within the digital channel and increasing self-sufficiency is good for the customer and good for business. Anticipate and act on customer behavior in real time. In a sense, be the best possible kind of insurance agent: one who’s clear, helpful and attentive to the customer’s needs but never pushy.
See also: How Insurtechs Can Win Consumers’ Trust
Branding, data science, risk-pricing, terms, customer reviews—these are all part of the mix for competitive success. But none of it matters if you can’t keep customers on your site long enough to see what sets you apart. By offering a new and better kind of engagement experience, insurance can start changing customer perceptions from the moment they arrive. When customers are guided to the information they need to make confident buying decisions, they’re more likely to bind policies, give accurate information to enable accurate risk calculation, update their coverage and generate revenue for the business. And that sure beats a trip to the dentist.