Other parts of this series:
- Lessons for small commercial insurers moving online: don’t underestimate price
- Direct insurers must price aggressively, but never forget the customer
- Small online commercial insurers need more than great traditional service to succeed
- Insurers considering moving online must ask: What if I can’t build it?
Lesson 2: Customer Focus
In this series, we are looking at the lessons small commercial insurance carriers can learn from personal lines as they move toward online sales. In the first lesson, we looked at the importance of price in the marketplace. The second lesson is about customer focus.
Progressive has one of the best examples of customer focus. The company’s online solutions target specific customer segments with different buying behaviors:
- Shopper: By showing the rates of other carriers, Progressive makes it easy and convenient for people shopping for insurance to come to Progressive’s website first.
- Discounter: For the coupon clippers of the auto insurance buying world, Progressive has developed a pricing and product strategy that offers different discounts to customers based on the way they think.
- Convenience: Progressive offers bundles that save customers both money and time.
- Negotiator: The name-your-own-price tool works for people who want to be in control of their policy, and it allows people to work out the trade-offs for themselves.
But customer focus doesn’t have to be just about online pricing tools. It’s also about building connections and affinities with customers. USAA has had a relentless focus on service for the military and their families, a focus which has earned it intense loyalty. And we have seen other carriers similarly focused on the customer.
In short, lesson number two in competing in the online market is that focus needs to move beyond just product and cost, to developing strategies that really understand and focus on the customer.
In my next post I’ll look at a third lesson to be learned from personal lines: customer service.