Three steps insurers need to take to improve cx in 2018

Recent research found that almost a third (27.9%) of customers believe that the insurance industry offers worse customer service than any other. In 2017, the Institute of Customer Satisfaction found that insurance was the only industry in the UK that was not improving their levels of customer service.

Why insurance? It is such an established business with well-known companies that really know their business. How can they be offering such a poor customer experience?

A recent feature in Customer Experience Magazine lists three key areas where the insurance industry is not matching the efforts of related industries - such as retail banking. These key areas are:

  1. Go beyond the remit; the reality is that most people only interact with insurers at the time of renewal or when making a claim. For this reason it’s very hard to create a positive customer experience and it is estimated that 95% of insurance products are bought based on price alone. Insurance companies need to find a way to interact more positively with customers - rather than only ever being a purchase or call at a time of crisis. Creating a broad range of services that might not usually be associated with an insurer is a good start - such as offering an emergency locksmith service to home insurance customers.
  2. Protect customer identity; 66% of customers are very wary sharing personal data online so insurers need to up their game and demonstrate just how well they all looking after the personal data their customers release to them. The use of automated fraud detection and similar intelligent systems can really boost customer confidence.
  3. Embrace digital transformation; the leading insurance companies in the UK fail to answer over 68% of questions sent to them using social networks. That’s over two thirds of customer questions just being ignored because the biggest insurance brands want customers to call or be ignored. Compare this to the digital-only insurance service Lemonade, which set a world record in 2017 when a claim was made, reviewed, and paid inside three seconds!

Insurance is an unusual product. Most people don’t buy it for pleasure or because they need it, either they are forced to buy cover or they fear the consequences of not being covered. It’s not a product that is associated with fun or enjoyment and therefore it can be tricky to deliver a great customer experience, but as these three points show, there are several key areas where insurers are failing to take basic steps to work with their customers. What do you think? Leave a comment below or contact me on LinkedIn and let me know.

Our white paper Insure Against Loss examines in detail the opportunities in the insurance sector. In this paper we will explore how delivering an exceptional customer experience can increase customer engagement levels and reduce customer churn.


Interview with Olivier Duha, co-founder and chairman of Webhelp’s board

Olivier Duha: “Webhelp – a large company with a start-up mentality”

 

Translation based on an article by Yann Le Galès in Le Figaro
Published on 15/01/2018 at 06AM
Source

Olivier Duha, co-founder and chairman of Webhelp’s board, explains how he instils a culture of risk taking and innovation among his teams.

You co-founded Webhelp with Frédéric Jousset in 2000. With more than 35,000 people in 28 countries and a 950-million euros turnover, your company has become the European leader in Customer Relationship Management The investment firm KKR owns 50% of the company shares.
Do the start-up founder and the leader of a 35,000-people group have the same job?

My job is no longer the job I did when I created the company.

Have you made progress in specific areas?
I constantly challenge myself and I am always trying to learn new things. However, one cannot be an expert in everything. I concentrate my energy on the areas that I am the most efficient at. I devote a lot of time to acquisitions and large transformational projects, while remaining very close to the operational side of the business.

Have you become a manager?

From a character and personality point of view, I am and I remain a "starter-upper" at heart. I like action, taking risks, making decisions. I like innovation, boldness and agility. I avoid bureaucracy and slowness of any kind at all costs. I hate inaction or the status quo. I want Webhelp to continue to act like a start-up, even though it is one of the largest companies in Europe.

What kind of leader are you?

My number one priority is to know how to surround myself with and to recruit "heroes" in all areas. I think the value of the men and women who make up a business is a business’ most valuable asset.

Why do you want to recruit "heroes"?

Heroes are people who are able to develop organisations under any circumstances. They stay above the fray and  are virtuosi in their field. We must attract as many heroes as possible.

 

"A leader also uses his intuition to choose a candidate or take a strategic decision."

 

Does the “messiah leader” exist?

I do not believe in the concept of the omnipotent leader. It may work for a while, but this is not how you build a company that succeeds for decades, a company that is "built to last" as Jim Collins defined it. This is because our environments are so unpredictable. How can one man be able to cope with every situation?

Has your way of assessing people evolved? The way I analyse men and women has evolved. But one thing remains constant: I prioritise personality over expertise in my hiring process. It is very important that those who join Webhelp are in harmony with Webhelp’s culture.

What are the required skills to work at Webhelp?

We want our employees to be self-motivated, to behave like entrepreneurs, to be able to make decisions and take risks.

Do you believe in teamwork?

It is essential that our employees are willing to work as a team. In this respect, I am surprised to notice how rare the notion of “team” is in the world of politics.

Is a business leader only a rational human being?

A leader also uses his intuition to choose a candidate or take a strategic decision. But he must be fit and focused to use his intuition wisely. He must also be aware of his own preferences and prejudices and know how to use them.

Can you improve your intuition?

The more experience you have, the more refined it becomes.

Do you foster diversity?

Diversity is essential and beneficial. If you are not open to a diversity of profiles, you run the risk of missing out on wonderful opportunities. However, we must balance the need for diversity with the ability to foster a corporate culture to avoid unproductive conflicts.

Is it useful to listen to young managers?

Young managers must be listened to: they should also be able to make decisions. Our environments and technologies are evolving at an unprecedented rate. If you do not listen to young people, you run the risk of stagnating. To make the right decisions, one must have a fair and comprehensive assessment of the world around you.

 

"The liberated company is not a new concept. Only its marketing is.  By their very nature, start-ups work as liberated companies."

 

What is your method to develop and transform your company?

You do so by keeping the agility and speed of a start-up, focused on a limited number of topics to avoid spreading resources too thinly, while remaining close to your customers and employees. A company’s corporate culture

is an incredible weapon. Webhelp has a culture of intelligent, motivated entrepreneurs who are firmly action-oriented. We must avoid bureaucracy and fight against the complexity that that often accompanies growth. Keeping our entrepreneurial spirit is crucial. We are always seeking to create the conditions to allow Webhelp to operated as the largest European start-up.

Do you believe in the liberated company?

The ”liberated company” is not a new concept. Only its marketing is.  By their very nature, start-ups work as liberated companies. At Webhelp, we are very much in favour of this way of doing things.

We brought in Isaac Getz, the author of “Freedom Inc.” and we have initiated a program we call "Founder’s Mentality". This program aims to spread a founder’s mentality throughout our business so that our teams dare to innovate and behave as an "intrapreneur". Webhelp’s strength is our state of mind and our “day 1” culture. We want to harness the creative abilities of our 35,000 Webhelp employees.

How to maintain a founder’s mentality?

A few months ago, we organised a seminar of 80 senior managers based on  the theme of the founder’s mentality. We have launched training programs that teach these managers how to spread these start-up-style managerial behaviours. We avoid meetings with 20 people or meetings that last three hours. We fight the absence of decision. We immediately resolve conflicts when they arise. We want to keep the spirit of pioneers and innovators.

How many layers in the organisation from bottom to top?

Six.

Should organisations be flattened? Should responsibilities be decentralized?

In the business of customer relationship management, it is essential. We have many customers. The markets are different. Expectations are diverse. You have to stick to clients’ and customers’ needs very closely. To achieve this, we must give autonomy of action and decision. The "one size fits all" approach does not work. It is quite the opposite. You find balance in the concept of "Glocal, beglobal, local act".

 

"Middle management is key. It is a two-way transmission belt."

 

Is middle-management useful?

These managers are key. They act as a two-way transmission belt. On the one hand, they are the link between top management and all employees. On the other hand, they make sure that the grass roots information is brought to the attention of the senior management. This double responsibility is huge.

Should innovation be decided at the headquarters level?

Innovation organised centrally and supervised by a headquarters-based Innovation Director does not work. Innovation must be local. A culture of innovation should be created across the entire business.

Do you have examples of large companies that remain start-ups?

Amazon has managed to remain that way. It is the biggest start-up in the world. Its founder, Jeff Bezos, sent a letter to his employees and shareholders in which he explains why their practices must remain those of day 1.

Can you define a strategy for the next 5 years?

After WWII, companies have been building strategies on very long periods of time. Today, the environment is changing so quickly that it is difficult to define a strategy for 5 to 10 years. At Webhelp, we are talking about a very long-term vision punctuated by short strategic initiatives.

Is time  running faster since you created Webhelp in 2000?

Yes indeed. Companies from the sharing economy, like Uber and Airbnb, have transformed their industries over a very short period of time. Innovations in artificial intelligence are going to entirely change our industry in the coming years.

 What is the best asset against disruptive innovations?

The only way to guard against disruptive innovation is to build teams of talented men and women. They are the best assets to cope with these situations and reinvent our business.

Do you use the same management methods in all countries?

Succeeding in Europe is a challenge because every new region you develop into is a new "business case". You do not run a British team like a Greek or a Dutch one. You have to adapt your management style to cultural specificities.

 

"It is better to own 10% of a company that is worth money than to own the majority of shares of a company that cannot develop."

 

How do you work with the investment fund KKR, your shareholder which owns 50% of Webhelp’s capital?

Our shareholders are extremely responsive when we solicit them. They are deeply involved in all the topics on which we need them. In the absence of a request from the management, they let us do our job. We involve them to the maximum in our strategic decisions. And we ensure maximum transparency with them. Our shareholders are both financial and operational partners.

How have your relations evolved with Frédéric Jousset, with whom you co-founded the company?

There are essential elements in our relationship that remain the same: trust, attentiveness, willingness to serve the company, respect, freedom. From time to time we have differences of perspective but it is often temporary and it is never on fundamental topics. We are fortunate enough to share the same "business sense". This association is a blessing and an additional source of motivation. We have never experienced the “the entrepreneur’s loneliness”.

Today, some start-ups raise very large amounts of money. Is easy money a danger?

In the 2000s, the founder of a French start-up who had just achieved a brilliant IPO, explained to his employees that the company had become too rich to succeed.

I understand his remark because too much comfort kills the pioneering spirit, the innovative mentality and the resourcefulness that are the strengths of a young company. Knowing that the company can disappear motivates the teams.

Frédéric Jousset and you have never been the majority shareholders of Webhelp. Is it a choice?

We have been minority shareholders since the beginning when we raised 5 million euros. We were further diluted in a second capital increase. But this money has allowed us to realise our ambitions. It is better to own 10% of a company that is worth money than to own the majority of shares of a company that cannot develop. I am saddened that many young entrepreneurs do not make significant increases in capital for fear of being diluted and becoming minority shareholders.

Why do young entrepreneurs sell their business quickly?

They have a short-term vision. They also have a sort of fear of growing their company internationally. This is a shame.

Are investors primarily responsible for this situation?

No, because it is hard to force the founder of a service company to sell if he does not do not want to do so.

Do all employees adapt to change?

The answer is positive for a very large majority of them. But it is a responsibility shared between the company and the employees. The management must create the conditions for support and professional training. Employees must challenge themselves and leave their comfort zone to develop; the company must give them the means to do so.

 

"A leader must do everything he did before but faster. The 2018 leader is also overwhelmed with information."

How to maintain employee’s trust?

You do so by mapping out a direction, by communicating a clear vision, and by giving meaning to your actions. You must also be transparent, honest and you must invest heavily in internal communication.

Achieving the goals you set is also essential to establish a relationship of trust in the long run. This is true not only for gaining employees’ trust, but also that of shareholders, customers and banks. We must achieve the promised results; we must say what we do and do what we say.

What is the job of a leader?

A leader must demonstrate great versatility. He must be a visionary, he must inspire and move through his leadership. He must adapt and move with the times. He must dedicate most of his time to listening to his customers and his employees. He must overflow with energy; he must work a lot and stay focused on the execution. Leading is planning, inspiring and engaging into action.

What does it mean to be a leader in 2018?

What has changed is the sense of time. Everything is going much faster. The life cycle of products and services has shortened. A leader must do everything he did before but faster. The leader in 2018 is also overwhelmed with information. He must be able to analyse large amounts of data. In the 20th century, knowledge in the broad sense was an asset for a leader. Today and since the 2000s, knowledge is available and accessible to all, but you need to know how to analyse it. What matters now is our computing speed, our processor, not the size of our hard disk and the number of megabytes saved.

Is it more difficult to lead in 2018 than in 2005?

The speed of execution is key. In the old days, the big ones “ate” the little ones. Now, the fast ones are “eating” the slow ones. It is undeniably an additional factor of complexity. And it is certainly not a phenomenon that will fade away. Quite the opposite.

Does technology facilitate decision-making?

New technologies and connectivity make some tasks easier. The drawback is that a leader never unplugs. Spending a day without being in contact with his company is almost impossible. It is also a new phenomenon and a very destabilising one. I perceive it more as an element of complexity in trying to maintain one’s work life balance. The millennials’ rejection of a 100% career-focused life and the strive for balance and harmony also comes from this difficulty to disconnect from one’s professional environment.

How do you work with your executive committee?

Our executive committee is involved in the vision, the long-term strategy and all cross-company topics. Local topics are the domain of the local management. The executive committee is a brainstorming, sharing and decision-making body. We have a monthly call and a face-to-face meeting every quarter.

 

"We want Webhelp to still exist in 2050 and to have the ability to show resilience in times of crisis. "

 

What is your ambition?

Frédéric Jousset and I want to create a company that will last for a very long period of time. We want Webhelp to still exist in 2050 and to have the ability to show resilience in times of crisis. It is the best way to make the right decisions.

Why do you want Webhelp to last?

It's a question of consideration and responsibility. It is very selfish to set the duration of the life of a business on the entrepreneur's time horizon. Webhelp is what it is thanks to the work of tens of thousands of people.

Do you admire family-owned capitalism?

I find that the type of family-owned capitalism championed by the Michelin and Mulliez families is admirable as it stands the test of time.

But you have developed Webhelp through investment funds.

It is not incompatible. Our investors adapt to our industrial project. We can build a very long-term industrial project while changing shareholders several times.

Do companies have a societal role?

Companies have only one role and it is societal. The rest is secondary. Companies are places for social enrichment; places for intellectual challenge and human relationships. A company is meant to create a better world. Progress and creation are born within companies. Making money and creating jobs are just consequences of a successful entrepreneurial adventure. These things are not the aim. If a company innovates, ensures its growth, its solidity and its durability, the employees will make money and jobs will be created.

Have entrepreneurs and politicians broken up? 

I do not believe so. Quite the opposite actually. States get rich and develop thanks to the competitiveness of their national companies. States do not create wealth. Through taxes, they dispose of some of the wealth created by the companies, just like citizens get purchasing power thanks to the jobs created by companies. There are no employees without employers. There are exceptional situations of self-sufficient countries thanks to the richness of their land, but this is not the standard and it does not last forever.

What is the main difference between an entrepreneur and a politician?

A business executive does not always understand the drive for power, the greediness and the lack of loyalty of the politician. An entrepreneur needs to launch concrete actions and see quick and tangible results.

 

"One cannot make up values


Open banking is finally here – so how will it change banking in 2018?

2018 is finally here and so the countdown to open banking in Europe is finally over. Open banking launched in the UK on January 13 so we are now in the early stages of seeing what it’s all about.

If you largely missed the countdown to open banking then it is all about opening up information between different banking and financial organisations. It’s common for customers to have a loan with one bank, a mortgage with another, a current account with another, and possibly some credit cards or other financial services elsewhere. Connecting all these services to create an overall financial picture of the customer has never been possible because every individual company closely guards their customer data.

With open banking, every organisation is expected to publish an open API. API means Application Programming Interface and is basically a standard ‘door’ that allows access to data. The theory is that if every financial service company uses the same standard API then customers can easily connect together their various financial products, allowing oversight of everything.

The nine largest current account providers in the UK will certainly be offering this facility and smaller providers should follow soon. Some customers are concerned that the very concept of open banking means that their data will be available to anyone, but the financial institutions have been quick to point out that they will only support approved connections - so the password and security information you already need to connect to an account will also be required for any open banking connection.

What I think is really interesting about the open banking movement though is how it could potentially change how people manage their money. Companies such as Nutmeg have already shown that if you offer easy to use investment tools then customers that have never created an investment portfolio before will do it. They now have over 40,000 customers managing portfolios on smartphones.

It could be that instead of going to your bank to check your balance, you go to a third-party platform. The platform connects to your current account and not only shows the balance, but adds additional information such as how much you have spent at restaurants this month, how much you need to allocate for recurring bills, how much you have saved. These platforms could offer far greater insight into how customers use their money - beyond just looking at a statement and balance alone.

In fact, it should be possible to create automated ‘advisors’ that autonomously manage our money. Your savings account could be used to offset the interest on mortgage payments. Your current account could be actively managed so cash is always diverted into an investment fund, unless it is needed for day-to-day activities and bills.

I think that open banking will need some time to take off, possibly more than just this year alone, because bank customers are only slowly demanding greater insights, but one year from now I think that checking your statement will be a very different experience. What do you think? Leave a comment below or get in touch with me on LinkedIn.


Insurance in 2018: competence and honesty to be regulated by EU

My attention was caught recently by a big headline in Insurance Business UK magazine: “Will 2018 be the year of the insurance customer?” That’s a big question, but it’s exactly the kind of question I have been asking for several years. How are very traditional industries, such as insurance, embracing the need to be customer-centric in 2018?

Initially the article didn’t look promising. It talked about new certificates being launched this year by the Financial Conduct Authority (FCA). Clearly it helps the wider industry to ensure that managers are more knowledgeable and certified, but certificates will not dramatically change the customer experience of those buying insurance in the short term.

However, the article went on to talk about the impact of the Insurance Distribution Directive (IDD) - a European directive that member states need to apply into law immediately, but which will only be enforced by the EU from October 2018.

It sounds dry, but stay with me. This affects both traditional insurance companies and the new app-focused generation because it is focused on the ethical behaviour of companies that sell insurance. Most of the requirements in the IDD can be summarised with the requirements that ‘insurance distributors always act honestly, fairly and professionally in accordance with the best interests of their customers’ and that they ‘possess appropriate knowledge and ability in order to perform their duties adequately.’

That’s quite a sweeping requirement from the European regulator. Insurance companies need to guarantee that their employees have the knowledge needed to deliver an adequate service to customers and they must be fair and honest. It could be argued that competence and honesty should be expected in any industry without the need for a European regulator to go checking on company performance, but I think this is an interesting development for the wider insurance industry across all of Europe.

When exploring the development of the insurance industry there is a tendency to just focus on the Fintech angle - the startup companies launching new services that are customer-centric and often built around the smartphone interface. What the European regulator is doing with IDD is enforcing that in a regulated industry, such as insurance, all companies need to ensure both competence and honesty - regardless of how good your app looks.

At first glance, the IDD doesn’t sound like an industry game-changer, but I think it’s worth monitoring closely through 2018. How are individual insurance companies ensuring that their approach to certified competence and honesty creates a great customer experience? Leave a comment below or get in touch with me on LinkedIn.

Our white paper Insure Against Loss examines in detail the opportunities in the insurance sector. In this paper we will explore how delivering an exceptional customer experience can increase customer engagement levels and reduce customer churn.


The most important trends for 2018 in retail banking

The 2018 Retail Banking Trends and Predictions research published by The Financial Brand features insight from over 100 retail banking leaders. The research identifies ten key trends that retail banks need to be focused on in 2018 and the customer interaction is at the heart of several of these trends:

  1. Removing friction from the customer journey
  2. Use of Big Data, AI, Analytics
  3. Improvement in integrated multichannel delivery
  4. Open APIs
  5. Building partnerships between banks and Fintech
  6. Expansion of digital payments
  7. Responding to regulatory changes
  8. Exploring new tech - IoT, voice, etc
  9. Emergence of challenger banks
  10. Blockchain

The first three were considered to be of critical importance, so let’s explore each of those more important trends in turn:

Retail banks need to place themselves in the shoes of their customer. Ask why are customers so happy with the services they receive from new challenger banks and Fintech companies? The research suggests four immediate strategies and questions bank executives need to ask if they want to start exploring their own customer experience:

  1. Create an account opening process that allows a customer or member to open an account digitally without needing to enter a branch.
  2. Build a real-time alert process that goes beyond post-event notifications to include recommendations for future actions.
  3. Redesign your mobile and online banking platforms, removing steps that create friction.
  4. Rethink back-office process flows and documentation from a ‘digital bank’ perspective.

I suspect most retail banks would fail at question one. Can you open an account direct from your phone? Think about how the new app-based services have never even had a branch network and explore how the customer journey can be redefined.

Most banks have a vast amount of data on their customers. From current account spending patterns to knowledge of bills, loans, and credit commitments, banks have an enviable oversight over their customers, but often fail to mine it. By utilising this data more effectively a bank can offer more targeted, personalised products to their clients - good for the bank and even better for the client.

The research paper suggests four key strategies executives can use to commence thinking about how to use customer data more effectively:

  1. Break down the barriers within your organization that perpetuate data silos. Only after silos are eliminated can advanced analytics be the most effective.
  2. Establish a data analytics function or partner with an outside organization to provide help in improving the actionability of your data.
  3. Replace timed marketing ‘programs’ with ongoing marketing ‘processes,’ leveraging real-time data to take advantage of immediate opportunities.
  4. Test the use of artificial intelligence and machine learning beyond risk and fraud analysis, including offer generation and bundling of services.

To be offering multichannel support is now essential, but moving on from these banks should now be striving to offer omni-channel customer support. Customers want to hop from one channel to another depending on the time of day and their location. They may prefer to use one channel in the evening and another during the day. Think about how you should be offering the same great service across all communication channels.

The research suggests these strategies as a starting point for omni-channel planning.

  1. Allow customers and members to stop any process (such as new account opening or applications) and restart on another channel without retracing footsteps.
  2. Expand traditional marketing to include all digital channels including SEO, social media, influencer and content marketing, videos, SEM, retargeting, mobile banking app, etc.
  3. Implement a teaching platform within branches that assists visitors with the use of digital technology.

Clearly all ten of these trends are important for retail banks in 2018. The open banking initiative in Europe this year makes number 4 extremely important too, so it’s not possible to focus solely on the top 3 trends. I believe this list of ten trends is vital for any retail bank executive wanting to stay on top of the changing nature of banking in 2018 - but would you add any more to the list? What do you think? Leave a comment below or get in touch with me on LinkedIn.


Insurance companies need to embrace CX and transform for survival

Research undertaken McKinsey in 2017 titled “Time for insurance companies to face digital reality” suggests that insurance companies need to work harder to improve the customer experience (CX). The importance of this finding is not just that customers will be happier - the McKinsey research suggests that a focus on CX is critical as insurance companies undergo digital transformation programmes.

McKinsey believes that this is a question of survival. Insurance companies that do not rethink their business, transform and offer innovative digital services, and centre the experience around what the customer wants may soon cease to exist.

When you look at what insurance customers want, the message is clear - insurance customers have very clear expectations when it comes to dealing with insurance companies:

  • They want simplicity
  • They want 24 hour access, across every channel
  • They want to be able to quickly find relevant information, particularly in relation to policy details and premiums
  • They want innovative services, tailored to the digital age

The thing is insurance is not like most products. It’s often a compulsory purchase, such as car insurance or desirable because it creates peace of mind, such as home contents cover. Customers want to pay as little as possible, but they also expect to be treated well.

The McKinsey research suggests five pillars that all need to be considered if any insurer wants to successfully manage a digital transition:

  1. Innovate: customers learn about products online today and want to use a wide variety of channels when communicating with their insurer. Embrace this change and explore how technology can create entirely new products - such as wearables, health monitors, and car trackers.
  2. Customer Ownership: loyalty is a thing of the past. You will only get customers to renew if you build a relationship with them. Use their information and show that you understand their needs - offer relevant packages and deals.
  3. Efficiency: explore how digital changes can be an opportunity for the business, not just a threat. For example, digital CX provides an opportunity to build deep connections to customers with the ability to create Big Data sets that can be analysed to explore customer behaviour.
  4. Scale: App culture means that small players can grow and scale quickly. Anyone with a great idea can launch their business at relatively low cost. Your main competitor next year may not even exist today. Think about how the market is changing and how you can build better customer relationships to drive scale.
  5. Speed and Agility: are your existing systems holding back innovation and new products? Being agile is essential today - those systems may drag your business into irrelevance. Consider how your business would be functioning if your technology supported new ideas from the business team rather than preventing them from trying anything new.

Our white paper Insure Against Loss examines in detail the opportunities in the insurance sector. In this paper we will explore how delivering an exceptional customer experience can increase customer engagement levels and reduce customer churn.

It’s clear that CX sits at the core of all these suggestions from McKinsey. The insurance business needs to embrace the digital revolution and find new products and ways to interact with customers, but the experience must always be positive and easy. What do you think about the McKinsey research? Leave a comment below or contact me on LinkedIn and let me know.


How many customers would leave their bank because of poor service?

An excellent recent article in The Financial Brand contrasts how most customers see their experience as a bank customer with other services they use on a daily example. For instance, to paraphrase the original article, imagine a customer who wakes in the morning and checks her personalised online news feed, listens to automatically downloaded podcasts on the way to work guided through the traffic by Google Maps. On arriving home, Netflix has recommended a new movie based on her preferences and Amazon is recommending a new book.

Now contrast all these slick consumer services with your bank. Even if they have an app, it requires several passwords and takes several minutes to login. Visiting a branch is even worse - waiting forever because all the staff is at lunch - yet that is usually the only opportunity for most people to visit a branch in person because they close so early.

Why do companies like Apple, Amazon, Facebook, and Google understand their customers so well and deliver services that are useful and easy to use, yet banks make everything difficult, disjointed, and complex? Of course, the easy answer is that they are dealing with regulated financial services, but many transactions on all these other sites involve cash and yet look at how simple they function. The Amazon one-click service that allows an item to be purchased with a single button click has been around for two decades now!

The NGDATA Consumer Banking Survey for 2017 found that 41% of customers would switch their bank if they receive poor customer service. That’s up considerably on 2016 when 33% of customers said they would move because of poor service. But what is really shocking to see featured in the same research is that 72% of customers believe their bank has not improved their service levels at all in the past year. Most people think that banks are not even trying to improve.

One area of dissatisfaction that really stood out was around personalisation. Over 61% of customers said that they really don’t like receiving offers and deals from their bank as part of a wider marketing campaign. That’s almost two thirds of customers who think that if you send a deal to all customers then it’s just spam. Banks need to get much smarter in their messaging to customers to ensure that offers and product recommendations are personal and relevant.

Millennial dissatisfaction with banks is even more profound. When asked which brands really understand their needs as a customer, 41% of 18-34 year olds said Google. 23% said their streaming video service. Just 19% said that their bank understands what they need. This should be a wake-up call for banks across the world - Netflix understands your customers better than you do.

The message is that banks need to analyse the data they already have so they can demonstrate a better understanding of their customers. There is no need for a quick rush to new technologies such as Artificial Intelligence when most customers don’t believe the bank can even send them a relevant offer by email.

Get to know your customers better. Start personalising your interactions and ensure that interactions are relevant and helpful. Customers expect better - more personal - service today and they know that you have their transaction information. The excuses for not treating customers as individuals are wearing thin. What do you think? Leave a comment below or contact me on LinkedIn and let me know.


How insurers can grow faster by improving the customer experience

Research by McKinsey has found that the difference between high and poor performing insurance companies is the experience customers have when interacting with their insurer. In fact, the McKinsey research goes so far as to suggest that if you want your insurance business to grow then customer experience needs to be a strategic priority.

In their research, McKinsey state: “Companies that offer best-in-class customer experiences grow faster and more profitably. To reach this level, insurers must relentlessly improve customer journeys across channels and business functions.”

But more effectively managing the customer experience is not just about damage control - trying to prevent customers publishing negative comments about their experience online. It has grown into a key differentiator. In a world where insurance companies look and feel very similar and price comparison websites allow dozens of companies to be compared by price and service level, creating a great experience is one of the last remaining ways in which an insurer can stand out from the crowd.

There is hard data to confirm just how important CX is to the insurance business. The McKinsey research found that over the past five years American car insurance companies that have consistently been rated best in class for their customer experience generated two to four times more growth in new business and 30% higher profitability that those with an inconsistent focus on CX.

The key for insurers though is to understand what customers really want. What are the customer priorities a brand should focus on if they want to deliver a great experience? McKinsey found that these are the top five customer service considerations for American auto insurance policies:

  • employee courtesy
  • ease of communicating with the insurer
  • employee knowledge and professionalism
  • transparency and ease of the process
  • the speed of the claim settlement

The amount paid out was only number 12 on the list of priorities for these American customers. Note that what these customers really want is courteous, knowledgeable help from their insurer in a way that is transparent, quick, and easy. Just make it easy.

Our white paper Insure Against Loss examines in detail the opportunities in the insurance sector. In this paper we will explore how delivering an exceptional customer experience can increase customer engagement levels and reduce customer churn.

It’s clear that CX can be an important way for one insurer to stand out from the crowd, but if you are focused on the wrong attributes - such as offering to pay out more than other insurers - then you are not likely to succeed. The McKinsey research really demonstrates the importance of CX for insurers, but more importantly, the importance of understanding the customer journey and what can really give customers an easier and more satisfying experience. What do you think about the McKinsey research? Leave a comment below or contact me on LinkedIn and let me know.