A seamless online customer journey boosts customer satisfaction levels significantly, as well as yielding cost savings of 15% to 25%. Thanks to the “equalizing” effect of smartphones, the members of Generation X are adopting many of these behaviors rapidly. cookies, McKinsey_Website_Accessibility@mckinsey.com. Executives knew that they would have to innovate in order to differentiate their offering. Upon examination, the team found that some of the communications were redundant, while others contradicted other accurate pieces of communications. If McKinsey is right, it’s the picture as a whole that will influence a customer and generate their loyalty. B2B. The data-driven insurer: A journey in five phases. At the end of the ideation phase, the crude mock-ups become detailed prototypes. Many incumbents have launched efforts to transform themselves. Digital customer journey is increasingly coming to the forefront in the insurance industry as the primary channel to drive new policy sales, policy renewals, and upsells.But the industry still has a long way to go when it comes to crafting outstanding customer experiences … It is not an easy challenge, but it can’t be bothered, because in the digital era, consumer power is on the rise. Below you'll find the templates that will help you build a banking customer journey map, CJM for finance, or an insurance customer journey map full of insights for improving CX and becoming customer-centric. They are wired to maximize productivity and scale economies through functional units. While the designs are being iterated, the technical implementation can begin in an agile way to deliver value to the customer (and road test the new design) in the shortest time possible. But the reward is well worth it; creating a fact base allows management to clearly see the customer’s experience and decide which aspects to prioritize. Please use UP and DOWN arrow keys to review autocomplete results. According to a McKinsey study, insurers that prioritize customer experience generated 2-4x more growth 1 in new business and 30% more profits than firms with an inconsistent customer focus over a five-year period. If you would like information about this content we will be happy to work with you. Real empathy allows designers to respond to true underlying needs, not superficial, stated interests. Other features like a simplified 2-minute upfront risk check to provide immediate price guidance, or a real-time application status tracker could be very compelling as well. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. Market leadership in one of its largest lines of business, car insurance, was under siege by both established players and new entrants. Examples could be a token gift or a branded card with the product name and coverage amount that she can share with her beneficiary. businesses also happen to be customers of the energy retailer’s small and midsize business unit, thus creating a positive customer experience across all customer segments). It is also important to differentiate between traditional customer research and immersion, coach the team on the difference between both, and show how to uncover and document fresh insights. thinking could work in the transition phase. For one thing, our research suggests that journeys are more predictive of desired outcomes. Many of customers’ numerous calls during the process represented attempts to clarify product information, fix problems with an order, or understand a confusing bill. Iteration. So the executives looked to another lever—customer experience—to see if improvements there could halt the exodus. Such pain points may make Susan abandon the process or take her business elsewhere, as illustrated by the most common business leakage drivers in Exhibit 2. Life insurers have long struggled to engage prospective clients and nurture relationships with existing ones. Delighted customers sent thank-you notes to the company, and brokers and mechanics reported significant improvements in their dealings with customers, who were now much better informed. What was driving them out the door was something the company wasn’t examining or managing—the customers’ cumulative experience across multiple touchpoints, multiple channels, and over time. Furthermore, core aspects of insurance will be different: Products: increasingly sophisticated tech platforms will enable simplified products to reduce customer confusion. This is logical. Press enter to select and open the results on a new page. The willingness to let go of “pet” features and ideas if they fail the customer test is a critical prerequisite in this phase. Flip the odds. As a result, industry expense ratios have fallen only slightly in the past ten years; for key European markets, the total expense ratio declined by only 0.5 percentage points6 6.Average expense ratio (expense per GWP) from 2000 to 2013; unweighted average expense ratios of Austria, Belgium, France, Germany, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom (McKinsey Global Insurance Pools). The vision then needs to be translated into pragmatic actions, many of which will not be digital in nature, such as underwriting services or turnaround times. Overall, every effort was made to personalize communication during an important phase in the customer’s journey. Use minimal essential
What could this look like? When seeking information, they rely less on friends and family, looking instead to social communities and online reviews. The call-centre and in-store become more important later in the journey. tab, Engineering, Construction & Building Materials, McKinsey Institute for Black Economic Mobility. This kind of empathy requires specific research tools that typically have an ethnographic flavor, such as “shadowing,” “follow me home,” or “shopalongs”—but empathy is about more than just collecting “soft” insights. According to Mckinsey, a fundamental change of mindset focusing on the customer, along with operational and IT improvements, can generate a 20 to 30 percent uplift in customer satisfaction, a 10 to 20 percent improvement in employee satisfaction, and economic gains ranging from 20 to 50 percent of the cost base addressed in the various journeys. When would they get the car back? In most cases, companies are simply not naturally wired to think about the journeys their customers take. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. In fact, we believe it is the only way an incumbent insurer can be sure of delivering more than a “me-too” customer experience. Portfolios will also be drastically scaled back; McKinsey estimates between five and 10 products per … Firuzan Iscan: We used to measure top-down customer-satisfaction scores (CSS) in many countries within Allianz, but it was not easy to use these measures and to translate them into actions. Founded in 2016, agilon health is a platform that empowers physicians with the operating model, technology, solutions and capital required to transition from fee-for-service to integrated payment and delivery. By doing this, it spurs breakthrough innovation. We use cookies essential for this site to function well. In smoothing the customer journey, insurers must make a complicated financial product grounded in actuarial science easy to sign up for, understand and use. Today’s consumers reward transparency, speed, and flexibility, new competitors are looming on the horizon, and the low-interest-rate environment makes the traditional business model a thing of the past. Our latest infographic illustrates a broad overview of the customer journey in the general insurance industry. Customer care’s role and responsibilities give it the ability to advance the customer transformation in several ways: Own customer journeys. If she has questions on her coverage after buying the product or wants to change her policy, she will likely struggle with the limited self-service options offered by the insurers and may find that her agent has moved on. Our flagship business publication has been defining and informing the senior-management agenda since 1964. So the company set out to provide an end-to-end communications “glue” to what had been a multitouchpoint, multiparty customer journey. for a policy online, she may be intimidated by complex products and technical terminology that is confusing and makes her feel incompetent. Reinvent your business. The rigidity of the in-force book creates an environment where old processes never die and costs keep building over time. Oliver Ehrlich, Harald Fanderl, Christian Habrich. Customers were leaving at an alarming rate, few new ones were available for acquiring in its market, and even the company’s best customers were getting more expensive to retain. While the company’s overall customer-satisfaction metrics were strong, focus groups revealed that a large number of customers left because of poor service and shoddy treatment over time. Multiple "steps" in the journey can take place through a customer-controlled online account with the service provider (from initial research through to downloading paid invoices). A recent McKinsey survey, for example, found that customer satisfaction with health insurance is 73 percent more likely when journeys work well than when only touchpoints do. tab. Please click "Accept" to help us improve its usefulness with additional cookies. McKinsey senior partner Alex Singla illustrates how a simple insurance claim provides multiple chances to build customer satisfaction. What is the solution? Here are 10 customer experience trends we've observed among US life insurers. The life industry has not stood still in the face of these challenges, of course. Life insurers can adopt design thinking with an agile, sprint-based approach that allows for a full experience redesign in 8 to 12 weeks (for one product proposition). To some fintechs, noninsurance incumbents, and venture capitalists, the industry’s challenges suggest opportunity. When the policy arrives, it comes with an emotional gesture that “rewards” her for taking care of an important financial to do for her family. Lower churn rates. The affordability of healthcare matters a lot to consumers, and this concern shows up in many ways. They are wired for transactions, not journeys. Interview
Companies that transform end-to-end digital journeys can offer a very different kind of customer journey, one that customer actually wants to take. Most transformations fail. Total expense per GWP; average of European life insurers. However, the question often asked by insurance executives is, “Where and how do we start?” Insurers should follow a five-phase approach to design, launch and successfully manage a data analytics business (exhibit). The problem encountered by the media company is far more common than most organizations care to admit and is often difficult to spot. Indeed, research we conducted in 2015 involving seven EU telecom markets found that when consumers embarked on journeys that involved multiple channels their experience was materially worse than during single-channel experiences, whether those experiences were digital or not. On the other hand, business leaders trying to bypass IT out of frustration with its speed or capabilities doesn’t work either. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. It also increases organizational speed and agility. This challenge is reflected in the sector’s financial performance: the life industry has grown only 3.1% p.a. Select topics and stay current with our latest insights, From touchpoints to journeys: Seeing the world as customers do. An organized customer, one who called perhaps a month before the move date to set everything up, would find that his or her move details were never recorded. In fact, it typically takes one to two weeks (and many work sessions) to create a complete view of the end-to-end customer experience and pain points. Step 1—Break down the journey using customer perspective as a central focus. We developed a single methodology, we are using the same questionnaire everywhere, and now we are measuring globally top-down satisfaction, including also journey … hereLearn more about cookies, Opens in new
Most of these service encounters were positive in a narrow sense—employees answered the questions or solved the issues as they arose—but the underlying problems were avoidable, the root causes left unaddressed, and the cumulative effect on customer experience was decidedly negative. Give a choice. By The outcome of the immersion is a detailed depiction of the customer journey that highlights pain points and links them to hard operational metrics, such as policy processing time, number of rejections without an alternative offer, or average number of interactions with clients per year. delivery. A customer’s claim can all be handled by a single person. A design wave of this kind has three critical components: Immersion. “Braiding” business and IT. These elements are just examples and focused purely on the end customer. Its why Amazon.com, a decade ago, began offering targeted product recommendations to consumers already logged in and ready to buy. Replacing functional siloes with agile cross-functional teams. In contrast, those that provide the customer with the best experience from start to finish along the journey can expect to enhance customer satisfaction, improve sales and retention, reduce end-to-end service cost, and strengthen employee satisfaction. Select topics and stay current with our latest insights, Transforming life insurance with design thinking. The result? Unleash their potential. For generations, the life insurance industry delivered its promise of financial security with the help of strong actuarial functions, working through intermediated distribution channels. What it really means is applying creative, nonlinear approaches to reinvent Accountability is diluted, which leads to management by committee and slows delivery. In it, they talked about how today’s consumers don’t separate the experience of owning and buying a product from the product itself. Important: 1. The company mobilized a cross-functional team (service, sales, marketing, and IT) to understand what was happening—from the customer’s viewpoint—along the journey to prompt these high levels of customer dissatisfaction. The media company’s sales personnel, for example, were measured and rewarded for closing new sales—not for helping customers navigate a complex menu of technology and programming options to find the lowest-price offer that met their needs. The common methods for keeping customers were also well known but expensive—tactics like upgrade offers and discounted rate plans, or “save desks” to intercept defectors. As Klaus Schwab, chairman of the World Economic Forum, famously put it: “In the new world, it is not the big fish which eats the small fish, it’s the fast fish which eats the slow fish.” Size or complexity cannot be an excuse for sluggishness: the top global insurers typically have a market cap of around USD 60 to 80 billion, while Alphabet’s (Google) is well over USD 500 billion. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. When visiting the insurer’s Web site, she might be able to select her agent based on shared interests or background (which is proven to build trust—and hence sales successs). Customers also had only one method—voice calling—to contact the company. Limited ability to meet the preferences of Generation Y (and the new needs of Generation X). Use minimal essential
What is a customer journey? “How can this be?” one executive wondered. They also knew that for a long time the fragmented nature of their customer experience had been a problem: many of their customers bought their product and managed Since today’s consumers expect frequent updates and new features in nearly every product and service, the insurer’s innovation work is never done. Each day, the company would track where the case was and provide a simple update to the customer via email or text. Most transformations fail. Ultimately, according to McKinsey, the customer experience is the most important issue for insurance companies, the challenge (impressive at organizational level) through which competitive advantage and diversity, can be gained. If marketing has one goal, its to reach consumers at the moments that most influence their decisions. When a car needed repair after an incident, a local mechanic typically managed the process, with little involvement from the car insurer. The outreach could include a link to tool that maps her needs (and demographics) in a quick, “human” and fun way—and delivers an instant offer with a buying rationale that feels personal to her (even if it is “just” a smart algorythm). This is only achievable by integrating a 360-degree view of customer CRM strategy with real-time predictive analytics. McKinsey & Company. Companies try to ensure that customers will be happy with the interaction when they connect with their product, customer service, sales staff, or marketing materials. If her policy is not issued instantly, she can track her application status online, and see the estimated day when her policy will be (e)mailed to her. What was being replaced or repaired? If marketing has one goal, it’s to reach consumers at the moments that most influence their decisions. This approach helps avoid costly mistakes down the road and aims to bring new solutions to the market in less than 16 weeks rather than 9 to 12 months. The essence of this new perspective is to view the customer experience as a source of competitive advantage and Having a good interface is a powerful way to improve the experience and … In many cases, these groups are also the keepers of the touchpoints that shape and measure how the company’s activities meet the customer’s—say, an in-store conversation with a sales rep, a visit to the company’s website, or a query to the company’s call center. Learn about
Insurers have historically been slow to change since their business is built on stability and risk aversion. to create a delightful experience—not only for end customers, but also for agents and brokers. Digital customer journey is increasingly coming to the forefront in the insurance industry as the primary channel to drive new policy sales, policy renewals, and upsells.But the industry still has a long way to go when it comes to crafting outstanding customer experiences … taking action—and making investments—accordingly. The company’s touchpoint-oriented, metric-driven way of thinking about customer experience had a large blind spot. In the insurance industry, discrete customer journeys can be triggered, for example, by the need to buy a policy, change an address, or submit and resolve a claim. People create and sustain change. Take new-customer onboarding, for example, a journey that spanned about three months and involved an average of nine phone calls, a home visit from a technician, and numerous web and mail interactions.
To increase customer touchpoints and ensure each interaction is positive, insurers should use multiple different communication channels. Moreover, the companies that perform best on journeys have a more distinct competitive advantage than those that excel at touchpoints; in one of the industries we surveyed, the gap on customer satisfaction between the top- and bottom-quartile companies on journey performance was 50 percent wider than the gap between the top- and bottom-quartile companies on touchpoint performance. Customer journeys include many things that happen before, during, and after the experience of a product or service. collaboration with select social media and trusted analytics partners
Customer care controls a significant number of touchpoints across primary channels, making it the natural owner of many service-focused customer journeys. We'll email you when new articles are published on this topic. People create and sustain change. It’s clear what you do and what’s on offer Ways to improve: 1. The customer might have been trying to ensure uninterrupted service after moving, for example, or was confused about renewal options at the end of a contract, or was trying to fix a nagging technical problem. collaboration with select social media and trusted analytics partners
Reinvent your business. Net promoter scores for the customer journey climbed by 15 percentage points, and by 50 points for difficult cases, such as when repairs were first attempted but eventually the car had to be declared a total write-off. Importantly, iteration continues after the launch of the new proposition or service. ... McKinsey recently published an article on the topic of design thinking and how it is transforming life insurance. According to McKinsey’s consultants, the future industry model will be shaped extensively by partnerships where incumbents retain ownership of the end customer while insurtechs act as digital enablers that drive the adoption of digital technologies along the value chain to help advance the digital transformation journey. Churn, due to pricing, technology, and programming options, was an increasingly familiar problem in this hypercompetitive market. It is also a proven tool that has already delivered results in many other industries. Understand how customers navigate across the touchpoints as they move through the journey. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe.