Over the last 15 years, the Retail industry has trail-blazed innovation in the customer engagement space. It’s had an extraordinary impact, propelling customers’ expectations to dizzy new heights. And today, these same high expectations apply to every purchase journey they set out on.

This blog series has explored exactly what it is that successful brands do so differently (and so well) in their drive to achieve customer engagement. I’ve identified three core qualities that they all share. And I’ve shown how these same qualities are being put to work by LP&I disruptors to capture market share.

To wrap up the series, this blog asks what traditional LP&I providers need to do to build their own market-leading customer engagement model. With direct-to-consumer channels growing rapidly – driven by changes in regulation and customers’ desire to interact digitally and directly – it’s never been a higher priority.

Most insurers are starting from a low point. Our Insurance Customer Survey shows that customer engagement levels in LP&I lag significantly behind other industries (just 18 percent of UK respondents consider insurers to be easy and convenient to deal with).

Traditional providers must act now to protect their customer base. Here are our top three proposition requirements (and supporting capabilities) for building a market-leading customer engagement model:

1.    Enhanced engagement

Insurers have a lot of ground to make up. Only 18 percent of UK customers think they’re easy and convenient to deal with. That’s in stark contrast to the 39 percent in our research who find online retailers easy…and the 25 percent who feel that way about banks. The objective? Enabling frictionless omni-channel customer journeys. Doing that requires an engaging customer app with slick, minimalist branding. Crucially too, an app that’s easy to buy from.

Insurers should identify the ‘moments of truth’ for customer engagement during the purchase journey, within 21st century life. Having done that, they can prioritise development of omni-channel capabilities. Delivering to each of those moments of truth, these capabilities will enable customers to transition between channels based on preference and segment as they progress along the purchase journey.

2.   Enhanced trust

Here’s another sobering statistic: only 20 percent of UK respondents consider insurers to be trustworthy (that’s versus 25 percent for online retailers and 29 percent for banks). That’s a big challenge for the industry. How to overcome it? We’ve seen the disrupters demonstrate that trust can be built by developing simple, transparent propositions that allow customers to explore a proposition in a non-committal way. There’s no reason why traditional providers can’t do the same.

Insurers need clever, smart ways to draw potential new customers in. One effective technique – assume a low base product knowledge and then build it slowly, allowing customers to try live demos whilst setting out the process for them in simple steps. Developing knowledge like this in a transparent way helps to generate trust. Transferwise, the money transfer brand, is a great example of a company that understands this (it provides real-time comparisons of fees saved compared to traditional providers).

Trust is also built when customers can actually see some value in sharing their data: so, when they do share it, reward them with affinity partnerships or rewards-based schemes that foster loyalty and demonstrate you know what your customer likes. These days, customers increasingly seek external peer validations of their choices. So providers need to be bold and incorporate some social content into their offerings. That could mean, for example, targeting Twitter engagement to drive advocacy for a product.

3.  Product understanding

Forty-one percent of customers think LP&I products are too complicated. That’s a big wake-up call. Providers need to stop relying on intermediaries as interpreters of their products to the end-customer. It’s their responsibility to ensure the products and services they provide are as easy to understand as possible.

A radical overhaul of product terminology may be in order. Take one example, life insurance; this could be wildly misinterpreted by the layman (after all, it’s insurance for your death, not your life!). Revolutionising the language and terminology the industry uses could help to create a feel-good factor and more positive engagement around products: something like a ‘My Clever Children Plan’ instead of life insurance to cover school fees in the event of death!

Customer-level segmentation will help customers to understand and identify products that are most relevant to their specific circumstances. After all, it would be much more powerful to be able to contact individual customers with: “Did you know you can protect baby Annie financially if you were to die by buying….’ With a market-leading analytics engine and customer insights platform, that’s already possible. So are personalised adverts and highly targeted recommendations (cross-selling). 

But of course, how you engage with a potential, new consumer, demonstrate trust and convey how various propositions relate to a specific need is always customer-specific. So really, your whole proposition relies on being able to segment and communicate at the customer micro-level.

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