Our VP of Commercial Strategy Anju Madan discusses lessons in customer experience from the consumer space, and how insurance can leverage ecosystems to center the user in the same way that giants like Amazon do.
This is the second post in a four-part series on the insurance industry and its use of emerging ecosystems. You can read the first part here.
In a world where the consumer can pick up their phone and have almost any need met at the click of a button, the only way to outperform the competition – in any industry or vertical – is by relentlessly focusing on the customer’s experience as it evolves in an ever-changing landscape.
Customer obsession doesn’t mean that the customer is always right. It doesn’t just mean that you have the insights and data to know what the customer needs from your solution, although that is a big part of it.
Customer obsession is about knowing your users well, and caring enough about their experience, to predict and fulfil needs before the users become aware of having those needs.
In a 2018 talk at the Economic Club of Washington, Jeff Bezos pinned Amazon’s success on one leadership principle, stating that the ‘No. 1 thing that has made us successful by far is obsessive compulsive focus on the customer as opposed to obsession over the competitor.’
Why customer obsession is the only way to beat out the competition
Take Amazon Prime, a paid subscription service for two-day delivery. Users weren’t asking for it – mostly because they hadn’t realized they wanted it, and they didn’t know it was possible to get it. By offering customers an amenity that they hadn’t even conceived of, Amazon was able to leverage an invisible need into a strategic business move (which today boasts over 100 million Prime members, who spend nearly twice as much as their non-Prime counterparts do).
This drive to delight the customer and to anticipate wants that they themselves aren’t aware of is also reminiscent of the Apple approach. The iPhone wasn’t just a phone – it was an introduction to an ecosystem which many of us find ourselves locked in to this day, as a mix of constant innovation and rich behavioral data gives Apple unique insight into what we want before we become aware of it. In 1998, Steve Jobs spoke about this with Business Week, saying:
‘A lot of times, people don’t know what they want until you show it to them.’
That’s how Apple centered the user and the user’s convenience, and that has won the brand undying loyalty from lifetime customers who will only buy and use Apple products – in spite of the hefty price tag. Consumers are happy to pay a much higher premium when it comes to their own experience, despite the availability of cheaper options in the market.
For an example a little closer to home, let’s talk about our partner, Suitsupply. Suitsupply customers didn’t know they wanted the option to browse the webshop with an agent, or to pre-shop, but then the pandemic hit and they could no longer keep appointments in-store. And although Suitsupply originally used our co-browsing solution as a stop-gap measure because of COVID-19, the brand recently announced that they will be giving their customers the option to pre-shop even after restrictions end. This tracks well with Suitsupply’s focus on the customer, and their highly-personalized in-store shopping experience; it’s also a step towards the future of retail, as a natural continuation from shopping in physical locations to shopping online.
How insurance can leverage ecosystems to streamline CX
Customer obsession has been part of CX vocabulary for a few years now, and it’s slowly permeating industries that are historically reluctant to change. It would also be remiss to ignore that seven of the ten largest companies in the world are ecosystem players (Alibaba, Alphabet, Amazon, Apple, Facebook, Microsoft, and Tencent, in case you were wondering).
This growing ubiquity of ecosystems in both B2B and consumer networks really drives home the need to connect services and provide an integrated experience for users. The customer should expect, and feel confident in the ability to fulfill a variety of needs without having the overall experience disrupted. Everyone wants seamless, painless processes that don’t compromise on the comfort of users for the convenience of companies – and that’s what makes ecosystems so important today.
There are twelve distinctive ecosystems that McKinsey has predicted to emerge by 2025 (although we may collectively be getting there sooner, in light of the push towards digitalization after COVID-19). For insurance, the most relevant ecosystems will be mobility, housing, health, wealth protection, and B2B services.
So there is a pressing need for insurers to rethink customer journeys and experiences, especially keeping in mind that the insurance industry ranked second lowest of all surveyed industries when it came to ecosystems – and that was at the end of 2019. We’re no longer living in a world where companies can afford to be complacent about the customer experience that they’re offering – because somewhere, there’s a company that does care, and can demonstrate that in the journey they offer to their customers.
Why insurance needs to develop an obsession with customers today
Customer obsession isn’t just a buzzword, but a ‘living, breathing relationship’. Worldwide, and especially post-pandemic, consumer needs are being placed front and center, and companies are investing heavily in digitalization. Part of that investment needs to be understanding the user, and the other part is creating systems that demonstrate this understanding.
That’s what an ecosystem does for the user: it places their interests and their experience dead center.
It’s also clear that decision-makers in the insurance industry are already cognizant of the value that ecosystems can provide. Adapting them has become strategically imperative in every industry – it’s just that traditional insurance may have a harder time than other, more agile verticals, as last year’s Accenture survey showed.
This is an exciting and vulnerable time, where industry leaders are poised to either grow rapidly or stagnate, depending on their approach to innovation and digitalization. As Artesian puts it:
“The world of tomorrow will merge functional disconnects and put the customer at the heart of driving your company – think how you organize and create the incentives for this future world.”
The next piece in this series will explore how traditional insurers and insurtechs are working together to harness the power of ecosystems, as well as how the industry is changing as values shift and the nature of risk evolves along with the ecosystem.