General

Moving Beyond CX to the Business of Experience

The structure of almost everything we do – how and what people buy, how and where they work, how they interact with others – has been upended by world events in 2020. The shift in consumer behaviors we’re seeing today is not an anomaly. They are likely to stay with us for a long time, some possibly forever. Many have been in motion for years, while even more have been accelerated by the COVID-19 pandemic.

Right now, an experience renaissance is just beginning – one that is galvanizing companies to push beyond the CX philosophy and organize the whole business around the delivery of exceptional experiences. These experiences must respond to customers’ new, often unmet and frequently changing needs and enable them to achieve their desired outcomes. This is the Business of Experience (BX).

An evolution of CX, BX is a more holistic approach that allows organizations to become customer-obsessed and reignite growth. Whereas CX was limited to the chief marketing officer’s (CMO) or chief operating officer’s (COO) purview, BX is in the board room as a CEO priority because it ties back to every aspect of a company’s operations. In fact, 77% of CEOs said their company will fundamentally change the way it engages and interacts with its customers.

BX is very much a new category of leadership that savvy CEOs and their leadership teams will embrace as we move deeper into the coming decade.

An innovative approach to expand business

In our research, we spoke to 1,550 executives (nearly a quarter of them CEOs) in 21 countries across 22 industries. We found that the organizations that embraced and reoriented around practices that we have defined as important for BX grow their profitability year-on-year by at least six times over their industry peers.

Three trends that gave rise to the Business of Experience

While attention to customer experience is not new, BX has taken on an urgent business imperative today in large part because of three major challenges plaguing CX as we know it: customer demands, sea of sameness, and flight to purpose. 

These trends have been barely discussed but are very real. The first is a legacy of 20th-century organization, the second has been happening for some time and is a sign of market maturity and the third has been very much accelerated by the pandemic.

Many organizations seem to be out of sync, too rigid, or moving at a pace that is slower than consumer change. If an organization’s experience fails to meet standards set by companies that do not directly compete with it, then they will be seen as a failure. That’s because consumer expectations have become truly liquid across different product and service categories. They no longer compare their brand experiences between two different companies in the same space. Rather, they make comparisons between their brand experience of, for example, a mobile service provider with a best-in-class airline, or even a design and tech-driven play such as Airbnb.

When executed well, CX investments have yielded good results: more customers, sales, and loyalty. Its importance is not going away, but its value proposition is stalling because many of the fundamentals of CX are now commonplace. Designers everywhere have been making increasing improvements to touchpoints for more than 25 years, and norms have been established. For example, we know how to welcome new bank customers with good onboarding routines. We’ve seen how clothes should be presented in a digital store. We commonly expect ultra-fast online check-out with minimal clicks.

As expectations have risen, simple, fast, clear, and intuitive experiences like these have become a given for customers, meaning they’re easy to copy and aren’t different enough to automatically gain you market share. As a result, it’s now harder to differentiate through customer touchpoints alone than it has been in decades.

Brands are facing intense pressure to stand for something bigger than the products and services they sell. Today, 8 in 10 consumers say purpose is at least as important to them as CX.  More than half of Gen Y and Z consumers (compared to 37% of other consumers) say they have shifted a portion of their spending away from their current service provider when a company disappointed them due to its words or actions on a social issue. 

Recognition that a brand’s vision and purpose can play a critical role in its growth is the foundation of a BX approach. Our research shows the leading 20% of companies are 2.5 times more likely than their peers to say they’re able to establish and manage a brand promise that connects directly to customer experiences. This coincides nicely with what consumers want, with nearly half of Gen Y and Z saying they prefer brands that make them feel part of something bigger and connect people around common causes or beliefs.

Becoming a BX leader starts with becoming customer-obsessed.

Beyond the CEO, every C-level executive and leader inside both front- and back-office functions needs to be invested in shifting their thinking about experience.

The customer experience is still central to a company’s success, but it is no longer enough to simply provide the products your customers want. For continued success, the entire business from bottom to top, internal and external must serve customers’ needs when, where, and how they desire, and adhere to CSR principles that align with customers’ and stakeholders’ expectations.  

This post is an edited version of the original first published on Accenture.com

Ecosystems in Insurance: Three Steps to a Winning Strategy

Ecosystems can enable insurers to become more digital, efficient, and agile as they seek to achieve breakthrough growth.

In brief

• Insurers are still faced with longstanding challenges, including persistently low-interest rates, rising customer expectations, and outdated technology.
• In reimagining their customer engagement models, forward-thinking insurance executives have identified ecosystems as essential to future success.

Across the insurance industry, boards and senior executives are coming to terms with the scale and urgency of the challenges they face, as well as the scope of the investments they’ll need to make to navigate the current market.

The bottom line is that insurers may need to become more digital, efficient, and agile if they are to find new revenue streams, boost customer engagement, achieve sustainable profitability, and generate higher returns on equity. Incremental enhancements in disparate parts of the business or traditional approaches to cost-cutting are not likely to work. In fact, for the top 10 auto insurers, expense ratios are at their lowest level in a decade – according to S&P Market Intelligence¹ -, suggesting that further cost-cutting won’t be enough to expand growth. Still, most insurers have been reluctant to invest in large-scale transformation, partly due to past change initiatives that failed to deliver the expected results.

Early-adopting insurance companies have already leveraged ecosystems and collaborations with InsurTechs to get closer to customers. One carrier created on-demand access to insurance for ride-sharing drivers. Another offered free home monitoring services to its policyholders. A third developed a digital health platform to help its customers meet personal health and wellness goals.

These programs and the business models advancing around them help drive growth by leveraging partnerships and shifting non-core capabilities outside of the enterprise to achieve both external growth and efficiency goals with less capital employed. For more and more insurers, ecosystems are emerging as an effective, flexible, and capital-efficient way to grow the business and promote customer-centricity.

What ecosystems are and why they matter

Ecosystems are networks of companies that choose to collaborate and can collectively produce a higher level of business value than any individual collaborator can produce on its own. Typically, ecosystems feature leadership or orchestration by a single company, which provides a platform of core capabilities and participants that offer complementary services and add-on features and functionalities. Consumers engage with the ecosystem, paying for various products and services, and benefitting from the value created by the leaders and participants.

Within insurance, ecosystem-based models typically enable interactions across the value chain by leveraging a differentiated infrastructure to allow for better service offerings, richer customer interactions, and higher rates of automation. Typically, insurers benefit from ecosystems via:

• Enhanced agility to provide superior customer experiences
• Access to new or enhanced capabilities
• Increased operational efficiency
• Accelerated innovation and faster product development 
• Improved ability to scale
• Reduced operating costs and higher margins

First steps on the journey to ecosystem success

With such compelling benefits, the question for insurers isn’t whether but how to develop the right ecosystem strategies and business models. We recommend three core actions to begin the journey.

1. Engage InsurTechs for stronger customer engagement and increased agility

InsurTechs can be essential to the development of successful ecosystems and can foster meaningful innovation across the industry. Insurers may seek opportunities to invest in or ally with InsurTechs when it can help them launch new products faster, engage customers in new ways, and enhance back-office processes. Consider how Nationwide, a leading US insurer, used an ecosystem model and extensive InsurTech collaboration to launch an entirely new digital business focused on millennials within only seven months.

InsurTechs can often help insurers in multiple ways, starting with access to customer-centric technology and analytics and the ability to deliver rich and tailored customer experiences. Typically, companies can derive value from these collaborations by clearly defining strategic imperatives and adopting a test-and-learn mindset. 

Many insurers also benefit culturally from InsurTechs’ relentless focus on innovation, agile work style, and next-generation thinking. The most fertile opportunities for collaboration and new capabilities often involve the most advanced technologies, including the internet of things, artificial intelligence (AI), machine learning, and robotics, with potential applications across the value chain.

2. Scale faster by digitizing existing business models and embracing advanced technology 

For years, many insurers have understood the constraints and risks of their inflexible legacy technology. The good news is that today’s advanced technology can offer meaningful upside if insurers can modernize their core systems to suit the new toolsets. Early adopters are using software-as-a-service (SaaS), AI, machine learning, and robotics to enable straight-through processing, self-service, and smarter cross-selling. Within the claims function, AI and robotics can deliver faster and more accurate payments, starting with frictionless first notice of loss, which may lead to higher customer satisfaction. 

Predictive analytics may allow insurers to make better use of both internal and external data necessary to more accurately price risk. Moving more processes and data to the cloud can makes it easier to engage with a broader range of ecosystem partners. Ecosystems may offer a faster and lower-risk path to the digitization of key processes, thereby shortening the path to generating value from ecosystem strategies. At the same time, modernizing legacy systems and applications can free insurers to engage with InsurTechs and other alliance partners more easily. This type of technological sophistication may be needed for insurers to realize the greatest returns from their ecosystem investments.

3. Enhance the operating platform to increase effectiveness and agility with innovative workforce and sourcing strategies

Strategically, ecosystems allow different participants to play to their strengths. In that sense, insurers can look to enhance their operating model, focusing on core, differentiated capabilities and adopting the right sourcing strategy for everything else. 

One large US insurer determined that a new spin-off company would be able to compete more effectively in the personal life and annuities markets. The new company was designed to be lean, cloud-based, and asset-light. Freed from the constraints and complexity of legacy technology architecture and able to engage with a range of partners for non-core capabilities, the company became poised for long-term growth.

Offshoring and outsourcing can drive efficiencies and cost savings across routine processes, freeing up human and financial resources to focus on the highest-value activities. Policy administration and call center support are typically the first to be migrated to nearshore or offshore captives. Such an approach can enable insurers to maintain direct control over day-to-day operations, service quality, and underlying systems and infrastructure. Third-party administrators (TPAs) are often a viable option, with many insurers taking advantage of their robust operational capabilities and strong policy administration systems – not to mention the opportunity to shift away from fixed to unit-based cost models. Other insurers have turned to SaaS models as an alternative to expensive and risky system upgrades or replacements.

Thinking big about the road ahead

It’s important to note that ecosystem success can require thinking through a number of critical strategic questions with potential impacts across the organization: 

• What are the best opportunities to engage new customers and find new revenue streams?
• What types of new products, experiences, and ancillary services would attract new customers or expand our share of wallet with existing customers?
• What is the optimal balance between direct, agency, and partnership channels? What is required to offer truly seamless omnichannel experiences? 
• Do we truly understand the customer journey? Can we digitize every customer touchpoint? 
• Which processes can be automated, outsourced, or delivered through partnerships?
• How to optimize our portfolio? Which product lines, business units, or books can or should be divested? 
• How do we evaluate alliance, partnership, and collaboration opportunities? How well do we understand the InsurTech landscape?

As these questions suggest, ecosystem-based business models may require a shift in management thinking as much as they do new technology and smarter sourcing. A clear vision, strategic planning, and cultural change can be critical to success, alongside operational decisions and technology investments. 

Summary

Ecosystems can often be an effective go-to-market strategy thanks mainly to their success in driving growth and innovation in a range of industries. Their expansion in insurance appears likely to continue. Ecosystems are already driving innovation at an outpaced scale and speed in insurance, as well as helping carriers overcome longstanding challenges related to outdated technology and weak customer engagement. Indeed, ecosystems may hold the key to growth based on their ability to help insurers efficiently develop and deliver relevant products and a personalized experience. The first step is to assess where firms should place their bets and how to structure the model.    

This article was first published on EY.com

Insurance Industry Trends: Growth, Stats, and Forecast

Welcome to the future of insurance — where getting quotes is as simple as clicking a button; managing a coverage can be done via a mobile app; determining a policy premium depends on monitoring devices, and so on.

In 2019, we all saw how ripe the insurance industry was for disruption. Although new technology has already been introduced to the market, not everyone was able to adapt to the tech-driven shift.  Some insurers made an early move to use advanced tools and it’s only a matter of time before they reap the benefits of their labor. 

In 2020, we can expect tech-infused insurance processes to become more commonplace. Because, in truth, the insurance industry trends show that the only way we’re going is forward.  
No matter if you’re the insurer or the insured, we have the latest insurance data, statistics, and trends to give you a better grasp of what’s ahead. Let’s dive right in!

CURRENT TRENDS:

1. The property and casualty (P&C) sector is the biggest insurance sector in the US. 
(NAIC) 

This doesn’t come as a surprise as, since 2018, the P&C market’s net income has been soaring. Currently, it’s sitting at $58 billion, up from $39 billion in 2017. A 10.5% boost in net premiums was a contributing factor to the market growth alongside the $3 billion underwriting gain. 

2. Insurtech partnerships are on the rise. 
(J.D. Power) 

According to J.D. Power, customer-focused digital solutions will be brought on by strong partnerships between traditional carriers and startups. Aside from providing better customer experience, these partnerships should also help insurers in cutting costs and improving business process efficiencies.  

Carriers across the country have are already forged partnerships with Insurtech startups, establishing a more collaborative industry in 2020 and beyond.

3. Mobile apps are changing the insurance account servicing landscape.
(J.D. Power)

The same report shows that 74% of insurance companies are using a mobile app, allowing policyholders to access and manage their policy and claims information on the go. 

Interestingly, customers who used mobile apps had a more satisfying experience than those who used desktops or mobile browsers to interact with their insurance companies. As we move further along into the digital age, this is one strong digital insurance trend to prevail this year and in the near future.

4. 68% of young insurance agents believe that the industry is too slow to adapt to new technology.
(Statista) 

Regardless of how progressive the previous stat was a booming 68% of young insurance agents think that the digital transformation of insurance companies is too slow. This stunted digital maturity might be due to a lack of resourcefulness.

The recent trends in the insurance industry are urging companies to deliver advanced self-service tools and integrated digital communications to keep up with the leading websites in other industries.

4. 69% of consumers would be willing to have a sensor attached to their car if it would lower their premiums.
(PwC) 

Based on a PwC survey, a large portion of the customer base is in favor of using car sensors, particularly if doing so would help them cut costs. This kind of innovative technology could also help the auto insurance industry extend coverage into untapped markets, making policies and premiums much more affordable for everyone.

5. Claims management and policy serving will be automated with the help of AI bots.

(Augusta Free Press) 
Artificial Intelligence (AI) has the power to enhance data processing capabilities. When the AI algorithm is merged with automation, we get faster car insurance claims powered by streamlined and automated processes. 

In terms of automation, Erie Insurance and Allstate are leading the way as they already started using drones for automated vehicle inspection. 

5. By 2025, 95% of customer interactions will be powered by chatbots.
(Duck Creek Technologies) 

Chatbots, the love-child of AI and machine learning, can interact with customers, assisting them with policy application or claims process. 

GEICO’s “Kate” is one great example of this new technology. Following this trend, digital insurance experts believe that chatbot capabilities will continue to prevail in 2020 (and beyond). 
 
INSURANCE OUTLOOK FOR 2020 AND BEYOND:

As insurers adapt to new business models, customer segments, and new technology, the industry’s best days are ahead. Here are the key takeaways to keep in mind:

Gone are the days when insurers relied on only one channel to distribute products.

From insurance suppliers/brokers to online media, all of these will be utilized to establish financial literacy and security. Still, watch out for insurance challenges.   

Consumers are aging and it’s important to study what their exact needs are to provide customized solutions. This should also pave the way for more customer-centric experiences. 

And finally, the advanced technology commonly referred to as the “disruptor,” will be the enabler of growth once it’s embedded into the new and improved insurance business models. 

Of course, there will always be obstacles but we should not expect a return to the industry’s old ways. As mentioned at the beginning of this article, the only way we’re going is forward.  This article was first published on www.policyadvice.net

How Self-Service Is Changing Technology

So much of what is developing in technology right now is aligning itself towards so-called ‘self-service’ options for users to be able to ‘get stuff done’ (or actioned and resolved) in ways that would have previously always meant engaging with another human being.

Self-service elements

This isn’t just Artificial Intelligence (AI), airport-style kiosk computers and chatbots (although it does include all three); this is self-service where organizations have worked to build automation layers into their business so that self-service ‘tickets’ for IT Service Management (ITSM) desk jobs can be executed without a service agent needing to physically engage, or attend a user’s desk or location. It is also the extended use of AI to ‘talk’ to humans, the ability for social media platforms to communicate with you on increasingly direct (but essentially automated) interactions… and for IT systems to remind you to be at the dentist by text message and so on.

All of these self-service elements are now driving service organizations’ interest levels towards platforms that can effectively replace the interactions currently being handled by real human beings.

A recent 2019 survey suggests that 88% of companies believe ‘self-service’ will be the fastest growing channel in customer service by 2021.

 The report would also have us believe that ‘average speed of answer’ is no longer the gold standard by which customer support is now measured.

When asked which general factors had the highest impact on customer satisfaction, nearly all respondents (92%) rated ‘solving the customer’s problem’ as having the most impact, followed by providing ‘an intuitive and accurate knowledge or data transfer’ (64%) with ‘speed of case resolution’ (62%) only third most important.

In other words, first-time resolution by a process well-equipped to understand and address customer queries and actually fix problems has emerged as the key performance metric. What all this leads us to is a suggestion that — where these technologies can actually be proven to work and show the right level of intelligence — we can see more and more forms of automated self-service technologies being deployed. The trend could be especially prevalent in firms that present increasingly web-centric and mobile-first customer engagement options.

Sarah Assous, SVP of marketing at Zoovu, an AI conversational marketing platform company said, “The channels where customer and 3^rd party vendor interactions take place are evolving along with technological and cultural shifts.  The vast majority of respondents in this survey expect self-service volumes to increase over the next two years.  It makes sense: as primarily digital consumers and other integrated users establish more buying power, they are also demanding comprehensive digital support. Today, it’s more important than ever for businesses to adapt to a globalized economy and serve their customers quickly and cost-effectively.”

Assous also reminds us that self-service offerings can be particularly beneficial for small and medium-sized businesses. She says that SMBs with limited resources and budgets can utilize self-service digital technologies to stay competitive and reach the needs and wants of their consumers and vendor audiences.

This article was first published in Forbes.com

4 Ways Technology Will Affect the Future of Customer Service

There’s a lot of excitement about new technology in customer service, support, and success. The progress of video, real-time messaging, chatbots and artificial intelligence (AI), cryptocurrencies, self-service, and even customer success itself, all present the potential for big changes in the day-to-day workings of customer success practitioners.

With new technology comes challenges

But with new technology come challenges, too. There’s a steep learning curve when it comes to learning to use and adapt to new technologies, they can be costly for businesses to implement, and there’s the looming concern we all feel about some new tech: Will it steal our jobs?

The short answer is no. Most new technologies will only serve to help customer-facing professionals to do their jobs more efficiently. These technologies might change your job, however, and that’s where these predictions come in. Read this blog post to get my thoughts on the future of service technology — and how it will change your day-to-day work, as well as the trajectory of your career.

Service technology

But, before you jump to my predictions, let’s quickly recap what service technology is.

Service technology is software that assists customer service teams in achieving customer success. These tools improve workflow efficiency and make it easier for companies to provide effective solutions to their customers. Adopting service technology helps companies manage the increasing demand for outstanding customer service.

Now that we have that out of the way, let’s take a look at how service technology will influence customer service over the next decade.

1. Bots, Artificial Intelligence and direct Process Automation will help professionals, not replace them. 

Ah, bots. Our future robot overlords, right? Well, maybe not.

Today, most “bots” are not actually any form of artificial intelligence. They’re branched, piecemeal logic presented in a conversational (like iMessage or Facebook Messenger) user interface (UI). Bots are just a different interaction mode for existing knowledge, and it’s another opportunity to engage your customers. Conversational UI is a great way for businesses to make themselves appear on the bleeding edge of innovation.

Don’t get me wrong — that’s a natural form of interaction nowadays, and bots can actually be very clever when backed by good tech — but it’s not “artificial intelligence”. It’s extremely clever math, turned into experience. The near-term opportunity with bots is twofold:

1. Bots can be there when you can’t, like while your customer service team is asleep.

2. AI and Direct Automation can improve self-service for customers, and reduce expenses for vendors, by either eliminating certain manual process or tasks or providing a new, repeatable, and inexpensive method of communications

Over the next 10-25 years, this technology will continue to make huge advances and will be capable of doing even more of what humans are doing today. It will be smart for customer-facing teams to keep up with these solutions and stay on the cutting edge here to provide increasingly better experiences at increasingly lower costs.

Bots, AI and direct automation will be a game-changer for customer support, where reps spend close to 90% of their time on the job repeating the answers to the same questions and helping customers with the same issues over and over again.

In the grand scheme of things, when AI and direct automation become a mainstream part of every customer-facing team, leaders will be able to reallocate customer support reps into the customer success organization — because there will be less need for the repetitive answering of questions, and a greater need for helping customers grow and derive value from the products and services they’ve already purchased.

2. Self-service will become an absolute necessity.

Since the first time someone wrote a user manual, self-service has existed. And as mentioned above, bots, AI and direct automated solutions offer new frontiers of self-service.

But more meaningfully, customers and users are changing rapidly, and they expect more self-service avenues than ever before.

Why is that change happening? Most vendors that the average consumer interacts with nowadays are big and technologically-sophisticated — think about Amazon, Facebook, Google, Walmart, big retailers, big banks so on. These big businesses are embracing self-service because it lowers their costs of doing business — but in doing so, they’re also pushing the envelope on more sophisticated methods of customer interaction. Over time, businesses that can’t or don’t keep up with this change will look like dinosaurs to the average consumer.

Imagine a world where you interact most frequently with messenger bots or location-aware mobile apps. You would think it very strange if a business didn’t offer these self-service channels, and forced you to use something old like phone or email. Snail mail is dead, and phone and email are going to be next. This time, the killer is sophisticated self-service.  The first step to helping your customers or users help themselves?

3. Customer success will become a competitive differentiator.

Over the next five years, great customer success will become a critical competitive advantage for companies, just like great customer support is today.

The customer success industry, and the progress of companies in search of customer value, is just too fast and effective for this to not happen. Plus, the concepts of customer success are permeating beyond just the software-as-a-service (SaaS) industry. It’s spreading quickly and growing.

When customer success becomes table stakes like customer support is today, it will be an exciting time in the industry of customer success to see the takeover. But when that happens, it’ll pose a novel challenge for companies looking to grow their customer list. Successful, established companies will have happier customers on the whole, raising the bar even higher for new entrants, even as switching costs of providers decreases for consumers.

Plus, customer success will become an imperative from day one, increasing startup costs and dipping margins for new entrants. It’ll be an exciting new set of challenges to stay ahead of that curve once it arrives — and if you’re already doing customer success at your company now, you’re ahead of the game.

4. Customer service will be data-driven.

No matter which service technology you choose, it should include a way to quantitatively measure its success. Without that, there’s no way to prove if the added software is being effective. So, as companies continue to adopt service technology, their customer service teams will become much more dependent on analyzing the success of these programs.

With that shift, there should be a noticeable influx of valuable data circulating throughout customer service departments. Service technology records a variety of information about customer interactions which are used to identify overlooked customer needs or roadblocks. Customer support and success teams then utilize this data to improve the customer’s experience.

Additionally, marketing and sales teams will be interested in this information because they can apply it to their initiatives as well. Marketing teams will use these insights to highlight new roadblocks and record them in the customer’s journey map. Sales teams will want this data to understand relevant customer needs that they can touch on during their sales pitch. Adopting service technology will lead to new demand for customer service data that can be beneficial across your entire organization.

This article was first featured in www.hubspot.com