The rise of InsTech and the major changes to distribution that have come along with it are making insurers redefine their relationships with customers. Carriers are rediscovering their customer-focus after decades of preoccupation with distributors.
But there’s a big problem: as an industry, we don’t have that much customer-centricity. Compared to many other industries, we aren’t even close.
Customer-centricity means many things to many people. I like to think about it in terms of levels of mastery; like a karate student’s rise to black belt. The framework I’ve adopted was born from an excellent blogpost. In this framework, the stages for a company maturity are:
C1 = Aware. There is an awareness that ‘customer experience’ matters, but no training or focus is given.
C2 = Objective. Companies set up ‘customer experience’ projects. They may even have a Customer Experience Team. They set goals and make limited progress.
C3 = Strategic. A core customer success measure becomes the central goal of business. Products, channels, processes and goals all flow from this core measure. Why are you doing something? Because it improves customer success.
C4 = Analytical. Companies have the data across customer experiences to make informed decisions. Understanding customer success is key here: why did or didn’t they succeed?
C5 = Adaptive. The company is now a continuous improvement machine. Everyone in the organization is empowered to improve customer outcomes. It is a dynamic environment that welcomes change.
So how can we mature to the highest levels?
QUALITY AS AN OBSESSION
Patagonia is a great real-world example of how to operate at C5. Patagonia founder Yvon Chuinard is obsessed with making products with and for people who reflect the highest level of performance in everything they do. This passion for high performance crystalizes their strategy and gives it life. It also makes possible a very flat, egalitarian structure. Quality is an obsession for the entire company.
Whether you are selling is ski helmets or life insurance, we cannot deny that positive customer experience is essential to long-term success. However, I would argue that, despite recent attention paid to improving customer experiences, the life insurance industry is lingering down at C1 or maybe C2. The gap between most of us and Patagonia is huge. In order to close that gap, we need to go beyond changing the work and tackle something more profound: changing the culture.
Our goal at iptiQ is to be a C5 organization in 2018 and beyond. We’ve been working at this for almost 2 years now, and we’re on the right track. I’m optimistic.
By far, the biggest contribution to our improvement came from redefining business goals in terms of customer success. Our goal is very simple – each month, we want more of the people applying for coverage to succeed than did the month before.
Switching from a policy and premium orientation to a customer success orientation means that everyone on the team can contribute. We track every step in the process, split it across partners, products, demographics and, most importantly, time. We obsess about the reasons why we’re failing some people, but not others.
The other big thing we did was to turn on the lights by ensuring that all employees had access to information about the experiences that customers were having. We set up an environment that allowed everyone in the company to see exactly how customers were succeeding, and what trends were changing.
It’s paid off!
Without changing anything else, we doubled our customer success rate over the past 6 months. And, because we don’t have benchmarks, our team is focused simply on continual improvement. They identify the issues, prioritize action based on impact and feasibility, develop solutions, test and roll them out – quickly. Because work is self-prioritized, our teams are nimble – we can implement new partnerships in as little as 30 days, new products in 90 to 120 days and changes to core processes daily or weekly.
Achieving this level of empowerment in the insurance industry takes a strong commitment to change, however, because – relative to other industries – we are still fairly hierarchical. C5 requires bottom-up leadership from the folks closest to the problem. We want people to self-organize into teams that solve the issues that they’re passionate about.
None of this downplays the importance of good customer experience design — it is an essential component to the answer, but only a small part of a much bigger cultural picture. Those of us that focus on experience too narrowly and fail to make this cultural pivot may find it increasingly hard to stay both relevant and competitive.