Fact-based, empirical measurement of the effectiveness of digital transformation initiatives is a key ingredient for success
To succeed in business, it helps to be optimistic. But sometimes optimism can get in the way of objectivity.
Here’s a case in point. Most insurers, according to recent research by Forrester Consulting, are confident that the digital experiences they provide their customers are better than those offered by their competitors. Something’s not right here. We can’t all be front runners; it takes the majority to make up the following pack.
Few of the respondents consider digital metrics and measurement to be a priority; at 21 percent it lags far behind the issues they see as critical to enabling their digital businesses. These include ostering a culture of digital innovation (58 percent), implementing key digital technologies (56 percent) and defining appropriate models for funding (56 percent).
It’s understandable that insurers are focused on execution. But stepping back and measuring outcomes is essential to ensure that priorities, strategy and ROI are on track.
Part of the challenge is that digital transformation strategies often incorporate many different consumer touchpoints – some digital and some not. As many as 63 percent of the insurers surveyed by Forrester say they’re looking to improve customer service across multiple channels.
Traditional single-channel metrics, which focus on a specific aspect of the business, are clearly not going to work. Insurers need to employ more complex cross-channel metrics that gauge digital performance across a wide range of customer interactions. Customer satisfaction, Net Promoter Score (NPS) and Customer Lifetime Value (CLV) are all useful indicators.
Effective measurement of digital performance will become increasingly important as insurers look to assess their ROI. More than half the insurers we surveyed plan to assess the impact of their digital strategies on customer service during the coming year. Moreover, 62 percent plan to establish new digital governance and transformation management systems and processes. Relevant hard data will be crucial for these initiatives.
Unless insurers have a clear digital vision and strategy, and effective mechanisms to monitor and measure their performance, they will struggle to achieve the results they are aiming for.
In my next blog I’ll examine what’s needed for successful partnerships on the digital transformation journey. Until then, take a look at the full report. I think you will also find these other links interesting.Beyond Insurance: Embracing Innovation to Monetize Disruption