Tag Archives: omni-channel

How to Achieve Customer Ownership

A customer purchasing auto insurance lives somewhere, in a house or an apartment that needs homeowners’ or renters’ insurance. A customer seeking homeowners’ or renters’ insurance might have a vehicle or two parked out front. And how many of these individuals also run their own business ventures?

Carriers have been becoming more mindful of the need to own customers, meeting all their needs. The idea of keeping your insurance customers under your roof for all their needs is appealing from a business perspective. After all, if your auto insurance customers need to insure their dwellings, as well, why shouldn’t they avail themselves of the coverage you already provide?

But owning the customer isn’t just about money. It’s also about service, as Blue Cross Blue Shield notes. An insurer that covers a client on multiple fronts, even with products the insurer doesn’t underwrite itself, is poised to provide a level of service that can meet a customer’s needs over an entire lifetime — if the insurer’s own systems support this goal.

Enter omni-channel.

Omni-Channel 101

The goal of an omni-channel presence is to provide a single, seamless experience for insurance customers. From the customer’s perspective, buying property and casualty insurance should be a “one-stop shop”: everything they need, reachable through a single interface, says Bryon Morrison at Nectarom. Most carriers currently fall short of that customer expectation.

If one-stop shopping sounds like a rebranding of multi-channel without any real substance, think again, says Kathy Hutson of IBM Analytics. Multi-channel marketing was a stopgap solution, a way to allow customers to reach multiple products while still keeping those lines siloed. With omni-channel tools, insurers break down the silos — allowing their teams to provide the specific solutions customers want and need.

Frost & Sullivan offers an elegant definition: An omni-channel presence offers “seamless and effortless, high-quality contact experiences that occur within and between contact channels.” Instead of directing customers to “the folks over at ___,” an omni-channel presence puts all of an insurer’s “folks” into a single line of approach for customers.

Omni-channel and similar tools are shaking up the insurance industry, according to a 2016 Majesco white paper. Omni-channel approaches provide exciting opportunities for both insurers and customers, Mark Breading says, and we are only scratching the surface of their potential. The first of the big carriers to embrace omni-channel, Progressive, is already seeing early returns on this investment, as we will touch on below.

See also: Where a Customer-Focused Culture Starts  

Keeping Customers in the Fold

An omni-channel approach offers several opportunities for P&C insurers. Here’s how omni-channel helps maintain customer ownership.

Meeting Customers Where They Are

While good customer service and relationship management has always been about meeting customers where they stand, their position continues to shift in the digital age. Consider:

  • 84% of U.S. households own a computer, according to Andy Serowitz at Insurance Thought Leadership.
  • 80% of shoppers use digital tools at least once during their shopping process, including while they shop for home, auto and other forms of P&C coverage, according to a recent McKinsey study.
  • 53% of consumers have tried a new-to-them financial or insurance brand in the past year after finding it online, according to the program for the 2017 Digital Marketing for Financial Services Summit.
  • 25% of shoppers now buy things like insurance via a mobile app — and that number is increasing. Millennials and the coming Generation Z are far more likely to buy insurance online, Serowitz says, and the percentages track their presence in the population. As today’s children and young adults grow, the use of these tools will increase.

These digital natives are well-informed and expect a seamless experience, Kamna Datt at Ameyo says, and these changing demands are shaking up the insurance industry. Once the domain of local friendly faces making personal connections with clients, insurance companies must now contend with customers who want to do their shopping online.

The demand for online connections is more than a whim. One Accenture study discovered that 78% of insurance customers are happy to share personal information with their insurance company, if it means better coverage or service. Customers want to hand companies their info — and the value of that info can only be leveraged by companies with the omni-channel infrastructure to unlock its potential.

Customers expect different things from their insurance experience in today’s world, as well. Once, a core concern for consumers was whether a P&C insurer underwrote the products it sold. Today, however, customers are more interested in convenience, says Progressive Product Manager Carolyn Wald.

Progressive’s home advantage program bundles other carriers’ homeowners’ and renters’ insurance offerings with the company’s own auto insurance plans. The result is big business for Progressive, benefits for the insurers that underwrite the non-auto portions of the policy and convenience for customers that keeps them coming back.

Whose Customer Is It, Anyway?

In 2011, Andres A. Zoltners, PK Sinha and Sally E. Lorimer posed an important question in the Harvard Business Review: Do your customers “belong” to your salespeople, or to your company?

“In a complex ecosystem of intermediaries and agents, ownership of the end customer can sometimes be lost,” says Dennis Vanderlip, industry solutions director at Microsoft’s Worldwide Insurance division. When communication channels are siloed or confusing, ownership becomes harder to maintain. And with every intermediary who enters the picture, ownership becomes even more muddled.

This also shines a light on a frustration that customers experience. Customer want to be loyal, a 2016 Bain & Company brief found. Or, more precisely, they don’t want to juggle multiple insurance providers. Instead, they prefer to “simplify their lives and do business with a single company that gives them reasons to stay.”

Omni-channel platforms offer a solution. When customers can carry out most or all of their insurance business needs through a single user interface — and when that interface connects to all the core systems of a P&C insurer and even to core systems of other carriers products — the customer’s experience becomes one seamless dealing with the insurer. Even when the underwriter changes, the customer can stick with the insurer of her choice.

Planning Throughout the Lifespan

Because customers are willing to provide information through digital systems and find it easier to keep using a single familiar interface, an omni-channel approach makes it easier than ever to maintain customers by anticipating their needs. A well-designed system can use customer data to anticipate needs and provide personalized alerts and service to customers who are buying a car or home, opening a business or passing through other major life stages.

One of the biggest questions that arises when “insurance” and “lifespan” are paired is that of life insurance — an area that stands to be upended by omni-channel approaches, according to an EY white paper. While life insurance has long been hands-off in its approach, an omni-channel approach both make it easier to meet customers’ needs in this area and to bundle life insurance with other insurance solutions, e.g., auto, homeowners, etc.

Building Your Omni-Channel Presence: A Quick-Start Guide

While an omni-channel presence can go very well for both customer and insurer, it can also be a disaster that causes customers to eschew the company permanently.

In an article for The Financial Brand, Jim Marous describes an experience with his own auto insurer that left him cold, mainly due to major mistakes in the company’s uses of its omni-channel system.

Marous breaks down the major problems into several categories. The insurer’s system, he says, made communication harder, was essentially a multi-channel approach overlaid on still-siloed product systems, created redundancies that resulted in broken promises and made it difficult to view customer data across channels.

Such negligence is a surefire way to weaken relationships between existing customers and their agents — to the point that neither the agent nor the company can claim ownership anymore.

See also: How to Enhance Customer Service  

How can insurers avoid these pitfalls? Vinod Muthukrishnan, co-founder and CEO of customer experience management company CloudCherry, recommends keeping the following points in mind when seeking an omni-channel platform that boosts customer ownership:

  • Know your brand. The customer-facing end of an omni-channel presence must communicate a unified look, feel and vision. No matter how your customer connects to your company or through whom, the experience should consistently sell the company’s brand, vision and coverage. By doing so, you can differentiate your brand to promote ownership, as well, as one IBM white paper notes.
  • Understand your customers. Tracking how customers interact with you and what they prefer can help ensure your company doesn’t waste time and energy on tools that customers ultimately won’t use — or overlook communication channels customers crave.

In addition, choosing platform provider and other professionals to build and service your omni-channel presence should be done with care. Look for companies with an eye toward customer experience and ownership; they’ll already be thinking about how to unify your brand and connect with the people you serve.

Finally, realize that a true omni-channel experience should enable a customer to complete a single application for all of their insurance needs, even if the last mile of the application process takes place at a call center.

And this is true whether you underwrite all of the products you offer or not. The key, which we will explore in a future piece, is to have alternatives and robust offerings to meet all of your customers’ needs.

3 Keys to Selecting the Right Platform

Customer experience (CX) consulting firm Walker predicts that, by the year 2020, customer experience will overtake price and product as a key brand differentiator. To remain competitive in the consumer-driven era, EY advises insurers to provide an omni-channel environment where consumers can move seamlessly between channels.

It’s a difficult feat for insurers to accomplish given the siloed nature of their legacy systems and lack of digital readiness, but, according to Rick Huckstep, there is a way to leverage these massive core systems while gaining digital capabilities, through partnerships with insurtech digital platform providers.

Huckstep says that digital platforms allow insurers to capitalize on investments already made in technology by building the agility and responsiveness necessary for online distribution into the new digital front end. But what should insurers look for in a digital platform to ensure they can deliver the omni-channel environment consumers are demanding?

Excel With Digital Platforms

A global study of 1,000 insurance executives conducted by Insurance Nexus revealed that 59% of insurers are already relying on relationships with third-party resources to realize digital innovation goals. In PWC’s CEO survey, more than 80% of the executives responding plan to do so over the next three to five years.

That’s because digital platforms can speed the transformation of insurers and put them on the fast track toward digitally enabled, direct-to-consumer distribution. Simply offering online channels of engagement won’t necessarily ensure carrier success.

To meet consumer experience standards in today’s world, insurers should seek partnerships with digital platform providers who focus on providing the following key attributes:

Consumer-Centric Online Storefront   

Accenture surveyed more than 32,000 consumers globally and determined that as many as 50% are already purchasing online. As insurers improve the strength of their digitally enabled, direct-to-consumer channels, those numbers are sure to escalate. Executives surveyed predict that 90% of interactions will occur through digital channels within the next five years.

As consumers move from the more personal experience of researching and purchasing coverage through an agent to digital channels, the insurer’s online storefront becomes representative of their brand. Whether consumers establish a relationship with the insurer and become a loyal customer or seek out other insurers that offer a more personalized online experience, will all depend on the strength of the online store.

Big Commerce found that 78% of consumers feel more comfortable buying online when pictures that depict personal interactions are included as part of the online storefront. This highlights the need consumers have to feel connected to their insurers while still engaging in anytime, anywhere purchasing.

Digital platform providers that focus on creating a customer-centered buying experience by improving the efficiency of the quote-to-issue lifecycle demonstrate a respect for the consumer’s time and instill good will. Automated prefill capabilities, for example, take much of the burden of completing an application off the customer and put it on the insurer, demonstrating that the customer comes first in the insurer’s operations.

The ability to automatically quote multiple policy types from a single application is another way insurers can attract consumers to the online storefront and establish loyalty.

A leading insurer that sells property lines through digital channels recently offered consumers the option to receive quotes on homeowners and auto by filling out one simplified application. The insurer now consistently provides 80,000 quotes a month to online insurance consumers.

Uniting Operational Silos for Cross-Channel Consistency

The largest group of insurance customers use both online and offline channels when interacting with insurers. This is particularly true in distribution, where J.D. Power found that 74% percent of shoppers purchasing coverage start transactions online, but only 22% actually close the purchase through a consumer-facing call center.

The situation becomes complicated for insurers when you realize the fluidity required to meet consumer expectations for cross-channel engagements. Too often, the consumer is asked to restart the transaction when changing from one channel to another, damaging the customer experience.

This happens because of the disparate and distributed nature of insurers’ back-end systems. With customer information locked up in operational silos, insurers have a difficult time creating a cross-channel experience that meets customer standards.

According to Huckstep, digital platforms can solve for operational silos by using existing core systems as the system of record and building the agility and visibility necessary for omni-channel engagement into the digital front-end.

It’s easy to envision the process by breaking it down. The web front-end is consumer facing, acting as the online storefront for consumers and agents alike. Information entered into the storefront is automatically updated across all core systems, courtesy of the digital distribution platform, creating a consistent source of data that is visible from a single vantage point.

When consumers move from an online channel to the consumer-facing call center during the purchasing process, agents have complete visibility into information entered online, facilitating a seamless transition from one channel to another.

Managing the Digital Transformation

Accenture reports that as many as 51% of consumers are already purchasing online, but Aite Group has found that only 20% of auto insurers and 7% of homeowners carriers are currently selling products online. Those that aren’t online are missing out on a chance at a lot of revenue.

To grow their digital footprint, insurers will need to change the way they engage with consumers. For instance, Mintel’s study of shoppers who have property and casualty insurance revealed that a growing number (39%) feel that insurers should provide apps to make buying and managing policies easier.

Progressive has recently introduced HomeQuote Explorer, an app that simplifies the purchasing of homeowners coverage by offering consumers a simplified application and four quotes on coverage.

According to Tricia Griffith, Progressive CEO, “You fill in a couple fields, and you get a home quote from one of four companies. One of them is the Progressive home quote and then [quotes from] three other companies that we work with closely.”

The service is free and allows consumers to comparison shop coverage from a group of carriers that Progressive trusts to provide quality customer service.

Digital innovations like these have broad implications across the organization. Seasoned digital platform providers, which have undergone many successful transformations, understand the challenges. They’ve created transition plans and have the talent on hand to guide the organization and ensure results following implementation.

Fast-Tracking Omni-Channel Distribution

Accenture reveals that platform-based business models are the goal of 94%, creating ecosystems where insurers and outside digital resources join forces in synergistic relationships that promote asymmetric growth.

As insurers embrace relationships with insurtech providers on digital distribution platforms that unite back-end systems and provide a single vantage point to the information contained therein, they are able to rapidly evolve into omni-channel insurance providers, seamlessly meeting consumer needs as they move across various mediums.

For example, a top-five insurer partnered with a digital platform provider and built combined teams with shared strategies and goals to meet the insurer’s objectives and enable an initial rollout of digital capabilities within two months. Since that time, the insurer has doubled sales on a year-over-year basis. Because the platform is scalable, the insurer continues to experience growth by adding agents, products and markets with no down time or service interruptions. As consumer preferences evolve, the insurer is able to expand channels and products to ensure future profitability.

Omni-channel engagement is the way of the future for the insurance industry. How is your organization meeting the demands for change?

It’s Time to Accelerate Digital Change

For global insurers, digital transformation and disruptive innovation have gone from being vague futuristic concepts to immediate action items on senior leaders’ strategic agendas. New competitive threats, continuing cost pressures, aging technology, increasing regulatory requirements and generally lackluster financial performance are among the forces that demand significant change and entirely new business models.

Other external developments — the steady progress toward driverless cars, the rapid emergence of the Internet of Things (IoT) and profound demographic shifts — are placing further pressure on insurers. A common fear is that new market entrants will do to insurance what Uber has done to ride hailing, Amazon has done to retail and robo advisers are doing to investment and wealth management.

Yes, “digital transformation” has become an overused term beloved by industry analysts, consultants and pundits in the business press. Yes, it can mean different things to different companies. However, nearly every insurer on the planet — no matter its size, structure or particular circumstances — should undertake digital transformation immediately. This is true because of ever-rising consumer expectations and the insurance sector’s lagging position in terms of embracing digital.

The good news is that many early adopters and fast followers have already demonstrated the potential to generate value by embedding digital capabilities deeply and directly into their business models. Even successful pilot programs have been of limited scope. By addressing narrowly defined problems or one specific part of the business, they have delivered limited value. Formidable cultural barriers also remain; most insurers are simply not accustomed or equipped to move at the speed of digital. Similarly, few, if any, insurers have the talent or workforce they need to thrive in the industry’s next era.

Because the value proposition for digital transformation programs reaches every dimension of the business, it can drive breakthrough performance both internally (through increased efficiency and process automation) and externally (through increased speed to market and richer consumer and agent experiences). Therefore, insurers must move boldly to devise enterprise-scale digital strategies (even if they are composed of many linked functional processes and applications) and “industrialize” their digital capabilities — that is, deploy them at scale across the business.

This paper will explore a range of specific use cases that can produce the breakthrough performance gains and ROI insurers need.

From core transformation to digital transformation

Recognizing the need to innovate and the limitations of existing technology, many insurers undertook core transformation programs. These investments were meant to help insurers set foot in the digital age, yet represented a very first step or foundation so insurers could use basic digital communications, paperless documents, online data entry, mobile apps and the like. These were necessary steps, as the latest EY insurance consumer research shows that more than 80% of customers are willing to use digital and remote contact channels (including web chat, email, mobile apps, video or phone) in place of interacting with insurers via agents or brokers.

More advanced technologies, which can enable major efficiency gains and cost improvements for basic service tasks, also require stronger and more flexible core systems. Chatbot technology, for instance, can deliver considerable value in stand-alone deployments (i.e., without being fully integrated with core claims platforms). However, the full ROI cannot be achieved without integration.

For many insurers, core transformation programs are still underway, even as insurers recognize a need to do more. Linking digital transformation programs to core transformation can help insurers use resources more effectively and strengthen the business case. Waiting for core transformation programs to be completed and then taking up the digital transformation would likely result in many missed performance improvement and innovation opportunities, as well as higher implementation costs.

One key challenge is the industry’s lack of standardized methodologies and metrics to assess digital maturity. With unclear visibility, insurance leaders will have a difficult time knowing where to prioritize investments or recognizing the most compelling parts of the business case for digital transformation.

But, because digital transformation is a long journey, most insurers are best served by a phased or progressive approach. This is not to suggest that culturally risk-averse insurers be even more cautious. Rather, it is to acknowledge that complete digital transformation at one go can’t be managed; there are simply too many contingencies, dependencies and risks that must be accounted for.

See also: The Key to Digital Innovation Success  

Insurers must be focused and bold within their progressive approach to digital transformation, as it is the way to generate quick wins and create near-term value that can be invested in the next steps. Each step along the digital maturity curve enables future gains. Rather than waiting to be disrupted, truly digital insurers move boldly, testing and learning in pursuit of innovation and redesigning operations, engaging customers in new ways and seeking out new partners.

Digital transformation across the insurance value chain: a path to maturity and value creation

Digital transformation delivers tangible and intangible value across the insurance value chain, with specific benefits in six key areas:

It’s important to emphasize speed and agility as essential attributes of the digital insurer. Even the most innovative firms must move quickly if they are to fully capitalize on their innovations — a concept that applies across the entire value chain. The idea is to launch microservices faster and embrace modernized technology where possible. For instance, deploying cloud infrastructures will enable some parts of the business to scale up and scale down faster, without disrupting other parts of the business with “big dig” implementations.

The dependencies and limitations of legacy technology are also worth reiterating. Insurers that can integrate process innovations and new tools with existing systems — and do so efficiently and without introducing operational risk — will gain a sustainable competitive advantage.

The following digital transformation scorecards reflect how the benefits apply to different technologies and initiatives.

Omni-channel

Today’s consumers are naturally omni-channel, researching products online, recommending and talking about them with friends and contacts on social media and then buying them via mobile apps or at brick-and-mortar retail locations. Basically, they want a wide range of options — text, email, web chat, phone and sometimes in-person. A better omni-channel environment may also enable insurers to place new products in front of potential customers sooner and more directly than in the past.

Insurers must look beyond merely supporting multiple channels and find the means to allow customers to move seamlessly between channels, or even within channels (such as when they move from chatting with a bot to chatting with a human agent). It is difficult to overstate how challenging it is to create the capabilities (both technological and organizational) to recognize customers and what they are seeking to do, without forcing them to re-enter their passwords or repeat their questions.

There are many other subtleties to master, including context. For example, a customer trying to connect via social media to voice concerns is not likely to respond well to a default ad or up-sell offering. Omni-channel is increasingly a baseline capability that insurers must establish to achieve digital maturity.

Big data analytics

The application of advanced analytical techniques to large and ever-expanding data sets is also foundational for digital insurers. For instance, predictive analytics can identify suitable products for customers in particular regions and demographic cohorts that go far beyond the rudimentary cross-selling and up-selling approaches used by many insurers. Big data analytics also hold the key for creating personalized user experiences.

Analytics that “listen” to customer inputs and recognize patterns can identify opportunities for new products that can be launched quickly to seize market openings. Deep analysis of the customer base may make clear which distribution channels (including individual agents and brokers) are the best fit for certain types of leads, leading to increased sales productivity.

The back-office value proposition for big data analytics can also be built on superior recognition of fraudulent claims, which are estimated to be around 10% of all submitted claims, with an impact of approximately $40 billion in the U.S. alone. Reducing that number is an example of how digital transformation efforts can be self-funding. Plus, the analytics capabilities established in anti-fraud units can be extended into other areas of the business.

Big data is also reshaping the risk and compliance space in important ways. As insurers move toward more precise risk evaluations (including the use of data from social channels), they must also be cognizant of shifting regulations regarding data security and consumer privacy. It won’t be easy ground to navigate.

Internet of Things (IoT)

The onset of smart homes gives insurers a unique opportunity to adopt more advanced and effective risk mitigation techniques. For instance, intelligent sensors can monitor the flow of water running through pipes to protect against losses caused by a broken water pipe. Similar technology can be used to monitor for fire or flood conditions or break-ins at both private homes and commercial properties.

The IoT clearly illustrates the new competitive fronts and partnership opportunities for insurers; leading technology and consumer electronics providers have a head start in engaging consumers via smart appliances and thermostats. Consumers, therefore, may not wish to share the same or additional data with their insurers. Insurers may also be confronted by the data capture and management challenges related to IoT and other connected devices.

Telematics

Sometimes grouped with IoT, data from sensors and telematics devices have applications across the full range of insurance lines:

  • Real-time driver behavior data for automotive insurance
  • Smart appliances — including thermostats and security alarms — within homeowners insurance
  • Fitness trackers for life and health insurance
  • Warehouse monitors and fleet management in commercial insurance

The data streams from these devices are invaluable for more precise underwriting and more responsive claims management, as well as product innovation. Telematics data provides the foundation for usage-based insurance (UBI), which is sometimes called “pay-as-you-drive” or “pay-as-you-live.” Premium pricing could be based on actual usage and driving habits, with discounts linked to miles driven, slow or moderate speeds and safe braking patterns, for instance.

Consider, too, how in-vehicle devices enable a fully automated claims process:

  • Telematics data registers an automobile accident and automatically triggers a first notice of loss (FNOL) entry.
  • Claims information is updated through text-based interactions with drivers or fleet managers.
  • Claimants could be offered the opportunity to close claims in 60 minutes or less.

Such data could also be used to combat claims fraud, with analysis of the links between severity of the medical condition and the impact of the accident. Some insurers are already realizing the benefits of safe driving discounts and more effective fraud prevention. These telematics-driven processes will likely become standard operating procedure for all insurers in the near future.

Voice biometrics and analysis

Audio and voice data may be the most unstructured data of all, but it too offers considerable potential value to those insurers that can learn to harness it. A first step is to use voice biometrics to identify customers when they call into contact centers, saving customers the inconvenience of entering policy numbers and passwords, information that may not be readily at hand.

Other insurers seeking to better understand their customers may convert analog voice data from call center interactions into digital formats that can be scanned and analyzed to identify customer emotions and adjust service delivery or renewal and cross-selling offers accordingly. The manual quality control process checks for less than 1% of the recordings, which is insufficient. Through automation, the entire recording can be assessed to identify improvement areas.

See also: 4 Rules for Digital Transformation  

Drones and satellites

Early-adopting insurers are already using drones and satellites to handle critical tasks in underwriting and claims. In commercial insurance, for instance, drones can conduct site inspections, capturing thermal imagery of facilities or work sites. Their reviews can be as specific as looking for roof cracks, old or damaged boilers and other physical plan defects that can pose claims risks.

Within homeowners lines, satellites can capture data to analyze roofs, chimneys and surrounding terrain so that insurers can determine which homeowner they want to add to underwrite, as well as calculate competitive and profitable premiums. When linked to digital communications tools, drone and satellite data can even trigger notifications to customers of new price options or policy adjustments.

Within claims, drones and satellites can handle many tasks previously handled by human adjustors across all lines of business. Such remote assessments can reduce claims processing time by a considerable degree. This method is particularly effective in situations such as after floods, fires and natural disasters, where direct assessment is not possible.

While many transformation programs that use drones and satellites remain in the experimental stages due to operational challenges, it is possible that they can improve the efficiency and accuracy of underwriting and claims information gathering by 40%.

Blockchain

Blockchain provides a foundation for entirely new business models and product offerings, such as peer-to-peer insurance, thanks to its ability to provide virtual assistance for quoting, claims handling and other tasks. It also provides a new level of information transparency, accuracy and currency, with easier access for all parties and stakeholders in an insurance contract. With higher levels of autonomy and attribution, blockchain’s architectural properties provide a strong digital foundation to drive use of mobile-to-mobile transactions and swifter, secure payment models, improved data transparency and reduced risk of duplication or exposure management.

Insurance companies are interested in converting selected policies from an existing book to a peer-to-peer market. A blockchain network is developed as a mechanism for integrating this peer-to-peer market with a distributed transaction ledger, transparent auditability and “smart” executable policy.

E-aggregators are another emerging business model that is likely to gain traction, because it is appealing to both insurers and the customers. Insurers can offer better pricing due to reduced commissions compared with a traditional agent-based distribution model, while customers gain freedom to compare different policies based on better information. Of course, e-aggregators (whether fully independent or built through an existing technology platform) will require a sophisticated and robust digital platform for gathering information from different insurance companies to present it to consumers in the context of a clear, intuitive experience. It is also important for insurance companies to transfer information to e-aggregators rapidly; otherwise, there is the risk they will miss out on sales opportunities. This is why blockchain is the right technology for connecting e-aggregators and insurers.

To see the full report from EY, click here.

How to Reinvent Call Centers

The landscape for customer service is changing.

New platforms are emerging that change how consumers seek service and engage with brands. In doing so, these platforms are disrupting the traditional call center model. Today’s call centers range from the ancient and decrepit to the ultra-modern and technologically streamlined. Despite the differences in capability, though, they still rely on the telephone to call and connect with customers. As we shift into the messaging era, this is going to change.

The maturing millennial generation is sparking a mobile messaging revolution across all age groups. Text-based communication is fast becoming the most-preferred communication method. And to attract, engage, acquire and retain customers in the text-based era, businesses need a customer communication strategy that incorporates mobile messaging.

Executives are facing three key challenges:

  1. Offering a mobile-native, text-based customer service solution to keep up with changing communication preferences of consumers.
  2. Satisfying the demand for always-on, 24-7 responsive service.
  3. Maintaining cost-efficiency in the call center.

A solution comes in the form of new technology: chatbots and intelligent automation.

Chatbots allow businesses to automate the 80% of general inquiries that are repetitive. This leads to a smaller volume of inquiries requiring live assistance from agents and reduces operational costs while maintaining — or even improving — customer satisfaction ratings. It’s this combination of chatbots and human agents that can usher businesses into the messaging era while reinventing the call center model.

Screen Shot 2016-11-27 at 10.11.16 AM

The Current State of Customer Service

Every business strives to provide exceptional experiences that increase customer satisfaction and raise their Net Promoter Scores (NPS). The reality, however, is that executing an effective customer communication strategy is challenging. Often, exceptional customer service is limited by the capabilities of traditional service channels: email, social media and call centers.

By 2020, customer experience will have a such a significant impact on business success that it’s expected to play a bigger role in competitive differentiation than price and even product quality. Customer experience and NPS are fast becoming the new business battlegrounds. Providing experiences that meet or exceed the ever-increasing demands of customers could be the difference between success and failure.

Call center performance has a significant impact on a company’s NPS and customer satisfaction ratings. Given the direct and personal connection a call center enables between a business and its customers, the overall experience of the interaction can have a major influence on how that person perceives a brand on the 1-10 Net Promoter Score scale.

And while call centers work positively by enabling direct connections between businesses and consumers, there are endemic problems for both sides. Businesses are faced with high operating costs and are vulnerable to changing communication trends. Meanwhile, consumers often have to deal with long hold times, outdated Interactive Voice Response (IVR) systems, inter-departmental transfers and inefficient service.

See also: 4 Hot Spots for Innovation in Insurance  

As new technology such as chatbots and intelligent automation emerges, any business that relies on strong customer service can benefit from innovation.

There is a significant opportunity to gain competitive advantage and lead the market by developing call centers that are not only technologically advanced, but also resolve issues with far greater customer satisfaction.

The ideal result is customer service that improves the relationship with customers while maintaining cost efficiency for the business.

What follows is an outline of the current state of customer service in today’s fast-moving, on-demand and customer-driven world. We also detail how the call center can be reinvented through mobile messaging and intelligent automation to deliver a win-win solution for both businesses and customers.

Connected and Demanding: Generation Z, Millennials, Gen X and Baby Boomers

There is a reason why there is so much buzz around millennials: Their generation is one of the largest in U.S. history, and they are maturing into their prime spending years.

Starting in 2017, they will have the purchasing power of more than $200 billion annually. The opportunity for businesses to drive revenue and gain market share with this generation is unprecedented.

The driving force for new technology and communication trends

Millennials are driving mobile and instant messaging adoption. Because they have grown up with technology and information at their fingertips, millennials are highly connected and expect 24/7, on-demand access to the businesses and brands in their lives.

Gen X, baby boomers

In addition, the millennial obsession with mobile messaging is influencing older age groups, with text-based customer service now an increasingly popular choice for generation X and baby boomers.

Generation Z

Millennials have also set the precedent for generation Z. Mobile messaging use is even higher among the first true digital natives; they place even more emphasis on personalization and relevance when interacting with companies.

Screen Shot 2016-11-27 at 10.17.36 AM

The Challenge of Delivering What People Want

The adoption of mobile messaging as the preferred communication channel is forcing companies to change how they approach customer service. Today’s call centers no longer meet customer expectations. From long wait times to frequent departmental transfers and ineffective IVR systems, customer service can be a frustrating experience for consumers.

Now, in 2016, with the proliferation of new technology and 24-7, on-demand services, the shortcomings of customer-contact centers are even more apparent.

The competition is fierce, and customers have no forgiveness for poor service. A sub-par experience can destroy a consumer’s relationship with a business.

Screen Shot 2016-11-27 at 10.18.40 AM

Key Business Challenges Affecting Call Centers and Customer Loyalty

The shortcomings of the current call center model and its inability to effectively meet the needs of today’s customer also represent a significant opportunity for businesses. There has never been a more appropriate time to dissect the call center and explore new ways to increase its effectiveness.

Executives and business owners need to address the following three business challenges to ensure the future success of their contact centers:

  1. Offering a mobile-native, text-based customer service solution to keep up with the changing communication preferences of consumers.
  2. Satisfying the demand for always-on, 24-7 responsive service.
  3. Maintaining cost-efficiency  in call centers.

Each of these areas needs to be explored to maintain, or even improve, customer loyalty and Net Promoter Scores.

Challenge 1: Offering a mobile-native, text-based customer service solution

One of the drawbacks of telephonic customer service is the limit imposed by the phone on call center agents; they can only answer one customer inquiry per call. This limit drives costs up. In comparison, using mobile and web-based chat, agents can effectively manage as many as five inquiries simultaneously. This significantly reduces operational costs while providing a better experience for customers.

Fortunately, thanks to mobile messaging’s rapid rise in popularity, it’s now easier than ever to incorporate mobile chat into an existing customer communication strategy to better engage consumers. Mobile messaging is the modern vehicle for businesses to deliver great customer service at significantly lower costs. The result is a better customer experience that drives loyalty while improving the bottom line.

See also: How Chatbots Change Open Enrollment  

Using an intuitive interface familiar to more than two billion people, businesses can effectively engage with customers and fans using simple decision trees for fast and convenient issue resolution.

Benefits of mobile messaging solutions:

  1. On-demand customer service that allows consumers to get the information they need, when they need it, without having to look for it.
  2. Faster issue resolution thanks to an agent’s ability to manage more inquiries simultaneously.
  3. Reduced, or potentially eliminated, hold times.
  4. Real-time conversational connections with customers.
  5. Improved customer experience with greater omni-channel service capability.
  6. Secure identity authentication and user verification.

Challenge 2: Satisfying the demand for always-on, 24-7 responsive service

The role of automation, bots and artificial intelligence in customer communication has become an increasingly popular topic. And as the technology continues to develop, more businesses are starting to realize the benefits of automated customer service and how it can drive customer service ratings higher.

Chatbots are virtual agents that operate through natural language processing, meaning they are able to absorb, identify and react to a number of different queries. These sophisticated programs and targeted automated strategies provide an efficient solution to handle the high-volume, repetitive inquiries that overwhelm call centers. Businesses are then freed to devote more time and resources to customers who need one-to-one conversations. They can deliver a far better customer service experience at a far lower cost.

As with any emerging technologies, automation and chatbots need to be approached with tact. Currently, the best strategies use both human agents and chatbots. Businesses can test bot technology and assess what’s right for them without drastically affecting customer satisfaction.

A good starting point is a website’s frequently asked questions. Today, people are more inclined to seek information themselves than engage with a human agent. Using chatbots to automate FAQs is a cost-efficient test that can form the foundation for larger automation plans as the technology develops.

Chatbots can be used as the front-line customer service interface to answer the majority of repetitive inquiries. This combination helps businesses improve efficiencies without compromising customer satisfaction ratings.

Screen Shot 2016-11-27 at 10.25.05 AM

Challenge 3: Maintaining call center cost efficiency

Businesses can improve customer communication and drive customer satisfaction ratings by following a simple five-step process to automation:

1. Opportunity Analysis

  • Review customer service data
  • Examine IVRs and CSR scripts
  • Conduct Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis
  • Identify all opportunities for automation

2. Chatbot Design

  • Sketch blueprints including flow designs for all areas
  • Identify integrations needed to enable bots

3. Engineering and Integrations

  • Receive blueprint approval
  • Develop bots for intuitive user experience.

4. User-Acceptance Testing

  • Demo bots in test environment
  • Adjust as necessary

5. Activation and Optimization

  • Conduct marketing efforts for Phase I onboarding
  • Track usage analytics and fine-tune
  • Benchmark performance against key performance indicators.

With this approach, businesses are able to automate as much as 80% of low-level, repetitive inquiries, saving call center agents for the complex and uncommon issues that require the nuanced knowledge of a live agent. This results in faster issue resolution and more efficient service.

Chatbots: An Emerging Technology

Other technologies may help improve call centers incrementally, but chatbots offer the best, most revolutionary opportunity to scale their capacity and ensure future success. If archaic call center models can’t innovate and keep up with changing consumer trends, they’ll fast become obsolete.

See also: Mobile Messaging: How to Meet Rules  

As with any emerging technology, chatbots are still experiencing growing pains. They’re not perfect; key development issues must be overcome to improve the flow of conversation. Increased investment in chatbots and NLP will help the technology mature fast. And as it does, chatbots will increase in capability and become more common, providing new opportunities for businesses across all industries.

A Management Guide to Omni-Channel

An omni-channel experience leverages customer behaviors across all relevant sales and distribution channels and provides the basis for a consistent, personalized transaction interaction. Where there is a multi-step transactional experience (completed over time), each relevant channel should recognize the customer’s current process point in the overall transaction fulfillment process, such that customers are able to progress along the transaction process in a transparent fashion. Also implied — but not often mentioned — is the need to gather predictive data so relevant customer-specific marketing initiatives are delivered digitally to the customer’s preferred device (or in hard copy form to their home).

The Rationale That Is Driving Omni-Channel Demand
From the time a customer logs on to his or her mobile or PC-based site, the customer should find a consistent presentation framework, with personalized offerings based on buying preferences, as well as new content that fits a customer’s purchase propensity profile. In addition, the selection and purchasing experience should be the same throughout a customer’s multi-channel purchasing and associated fulfillment process. With the growth demand for omni-channel distribution, this process paradigm is emerging as a differentiation that often helps a customer decide who to buy from.

See also: How to Captivate Customers (Part 4)

Omni-Channel Internal Readiness Assessment
Based on the broad context and scope required to fully enable omni-channel distribution, key assessment components include:
– A broad-based customer purchase and predictive data history that enables predictive and behavioral data modeling;
– The ability to standardize processes across all distribution channels;
– The capability to store customer transactions that are in-process;
– Specific process steps to be fulfilled when the customer reengages in one or many transaction based processes; and
– The ability to include bio-metric authentication.

Challenges
Legacy systems are the norm in most companies, and most have never been set up for this type of customer experience paradigm. Therefore, the magnitude of legacy system changes are often material. Additionally, most companies find they do not currently collect the breadth of data required and do not have the analytical capabilities required for predictive and behavioral data analytics.

To the extent the factors above require material software modification, the project delivery cost could be significant — and the delivery time-frame protracted. Regardless, due diligence requires project sizing, costing and delivery time-frame analysis. If the internal project assessment reflects material cost and long project duration, then a package software solution may be appropriate. Purpose-built software for omni-channel distribution often proves to be significantly less expensive and results in a materially reduced delivery timeline.

See also: Keen Insights on Customer Experience  

Summary
Omni-channel distribution is becoming a competitive necessity for many companieThus, primarily consumer interactive companies need to consider the impact of this new process paradigm, and prioritize omni-channel distribution accordingly to maintain their competitive standing.