What is the difference between customer service and customer experience?
This is a question personal lines insurance executives are asking us. Suspicious that customer experience is just a buzzword for good, old-fashioned customer service, these decision makers want an explanation – and to see results.
Let’s start with results. Auto and home insurers that are leaders in customer experience realize a higher return on investment (ROI) than their competitors, according to a study by Watermark Consulting released in 2016
Specifically, automobile insurance customer experience leaders, as a group, saw an ROI 129 points higher than the Dow Jones Property & Casualty Market Index. For home insurance customer leaders, the total return was 58 percent higher than the index, according to the consulting form’s study (see page 5), The 2016 Customer Experience RIO Study: Insurance Industry Edition.
Auto and home insurance customer experience leaders also saw lower expenses by reducing acquisition costs, experiencing fewer complaints and minimizing the need for intensive customer service, according to the study.
Viva La Difference
Here is the difference between customer service and customer experience: Old-fashioned customer service focuses on helping home and auto insurance insureds at the transactional level.
The customer experience approach, however, strives to build loyalty that can withstand customers’ temptation to switch insurers despite competitive pricing. Further, insurers engaging in the customer experience approach are also seeing loyal customers become brand advocates.
SPLICE views customer experience as cohesively and broadly offering positive interactions at every connection point (micro-moment) throughout the customers’ journey through omnichannel communication. Let’s unpack this.
Successful marketers in all industries are cohesively integrating overall customer experience by bridging the gap of business units -- including service, marketing and sales -- to improve customer experience, according to Salesforce’s 2016 State of Marketing report, released in March. (Note: Salesforce is a SPLICE partner.)
Too many automobile and home insurers send communications independently from different insurance company departments even though they are taking advantage of digital methods to market and serve customers. However, these tactics often lack the cohesion of the customer journey approach.
The Customer Journey
Implementing customer journeys is one critical piece of the customer experience approach, according to the Salesforce report, which is based on a survey of marketing professionals. Customer journey adoption, respondents indicate, positively impacts:
- overall customer engagement
- customer willingness to recommend products and services (brand advocacy)
- revenue growth
- customer satisfaction scores, and
- customer churn rates.
Deploying the customer journey approach and capitalizing on its micro-moments is a great departure from traditional customer communication, which limited contact to renewals and/or the claims process.
For home and auto insurers, mapping a customer journey is the process of identifying all interactions with customers – from comparison shopping to renewal. By identifying the critical micro-moments of opportunity to connect with policyholders, insurers can also discover areas to improve.
Insurance consumers in general want “more frequent, meaningful and personalized communications,” according to research by Ernst & Young. For younger customers especially, insurers that communicate on a regular basis make them feel cared about – and emotions play a critical role in customer experience. Among other attributes, these insurers considered leaders in customer experience in the Watermark study get that “great experiences” are intentional and emotional.
Customers also desire to choose how they will receive personalized communication, whether through text, email or human voiced, automated messages. For SPLICE clients, omnichannel communication often boasts a contact rate of more than 95 percent, far surpassing traditional approaches including call centers and snail mail.
The majority of customers are fine with receiving digital messages, according to analysis of SPLICE clients. Customers would rather receive a quick digital message than playing phone tag with a live agent. Savvy insurers find out how customers want to hear from their insurers at the beginning the journey and offer the option to hear from a live person.
Conclusion
Customer experience is not a buzzword but reflects better policyholder communication in the digital age.
While boosting overall ROI requires a cohesive and integrated approach to customer experience, insurers can still realize cost savings and efficiency. By deploying omnichannel customer communication at appropriate micro-moments, personal lines carriers can begin improving their competitive position.