Why digital customer journeys are key to boosting customer engagement in insurance
Insurance is a business that has always thrived on the power of relationships. However, the modern insurance industry faces new challenges as it navigates through digital disruption and an increasingly competitive landscape. This blog post talks about how insurers can leverage one of their most powerful assets—customer data—to create more personalized and effective customer experiences with digital customer journeys.
What are digital customer journeys, and why should insurers care?
A digital journey is a personalized, interactive customer experience that includes all the touchpoints between the company and its customers on digital channels.
A distinction between a digital journey and digital tools is an important one. A big chunk of digital customer engagement in insurance is done by filling out PDF forms or outdated eForms. Those are, by definition, digital tools, but today, consumers have different expectations.
Some insurers have successfully shifted to end-to-end digital onboarding, only to revert to PDFs at the later stages of the customer journey. It’s important to keep in mind that continuous digital journey encompasses the entirety of customer interactions. If the experience reverts back to PDFs at any point, the customer expectations are not being met
Digital customer journeys are becoming increasingly important for boosting customer engagement, which in turn is becoming a primary driver for profitability for insurers. Engaged customers are more likely to stay loyal and buy more products. In addition, they are less likely to churn or move to a competitor.
Consequently, customer engagement is a major driver for profitability in the insurance industry for two reasons:
- Insurance brands with higher customer engagement have higher levels of retention. Insurance brands with higher customer engagement have lower levels of turnover. Higher customer engagement has a strong positive correlation to retention, which in turn positively impacts the bottom line by saving insurers money and pulling more customers into their product portfolio.
- Higher customer engagement means less price sensitivity: As customers grow more content with the service they receive from their insurer, they are less likely to shop around for better deals. Satisfied clients have a higher level of engagement and are much less price-sensitive than those who actively seek out alternatives. For brands that fail to engage their existing customer base, this means letting your notice be the only thing consumers pay attention to when deciding whether or not it is time to switch insurers!
Insurer profits are derived from both price differentiation as well as the volume of business to which customer engagement contributes. Customer engagement is directly related to profitability because it creates a reciprocal relationship between customers and the insurer.
Insurers with higher levels of engaged customers have been associated with 30% more in profit per dollar invested than those without. This is because it boosts long-term profitability by streamlining processes to reduce costs and boost acquisition rates.
What is a digital journey, and how does it influence customer engagement?
Digital customer journeys are becoming increasingly important as drivers of profitability in insurance for several reasons:
Hyper-personalized customer experience
Digital customer journeys empower insurers to create a hyper-personalized customer experience.
Providing a personalized experience is an essential step for building customer loyalty. Digital customer journeys help insurers personalize the insurance process by providing customers with relevant information and offers tailored to their needs, which will ultimately lead them to make more informed decisions about protecting themselves from risk. Personalized experiences also make it easier for insurers to market specific products, increasing the visibility of tailored plans that include additional coverage options.
Digital customer journeys are also capable of improving customer experience by coupling multi-channel approaches such as real-time chat on websites or in call centers with tailored content for each client based on their past interactions.
Better product-market fit
Digital customer journeys are also enabling insurers to take better advantage of their customer data and in-depth understanding of their customers' needs. Insurers can use this information to make informed decisions about what products, services, or premiums they should offer customers.
Digital channels enable efficiency and streamline workflows between the back- and front-office. Collecting data in a digital-native format empowers a tighter integration with CRM and other systems, meaning that customer information is always available to staff wherever they are, freeing up time for them to spend on higher-value tasks more suited to their skills.
The back office also benefits from the adoption of digital customer journeys by reducing manual work and improving operational efficiency. Streamlined processes reduce errors while simultaneously decreasing administrative costs.
Reach customers wherever they are
Digital channels offer consumers an opportunity to interact on channels of their choice and not be restricted to a physical location, a crucial advantage during the ongoing pandemic.
The digital channel also allows for personalized interactions, giving insurers a chance to understand individual needs and build personal relationships. This is particularly important in the US region as consumers are increasingly more difficult to reach via traditional channels because of skyrocketing customer acquisition costs.
Digital customer journeys will allow insurance companies to connect with customers through an omnichannel model: on social media sites like Facebook, on the website, on apps, email, call center and have the data for every interaction available at their fingertips.
How to use digital customer journeys to improve customer engagement
The insurance industry has been one of the first adopters of digital solutions that have enabled insurers to increase customer engagement and drive profitability with new business models like on-demand car repairs from Allstate; concierge services from Liberty. However, traditionally, digital customer journeys are costly to build and maintain.
Agile digital transformation will be one key theme in 2021 for financial institutions with the onus of providing frictionless experiences and using data in customer-centric ways to boost profitability.
Lengthy, months, or even years-long transformation projects are no longer a viable option for insurance companies. Instead, insurers must embrace agile transformation to meet the needs of modern consumers in the digital age.
As the pace of digital transformation is picking up speed, insurers are shifting away from a more traditional long-term approach towards transformation and agile projects in order to keep up with changing customer expectations and business needs.
Welcome to the era of no-code
The urgency to keep up with the digital age and customer expectations is no longer a choice for financial institutions. It's an inevitability. Unlike in previous years, when transformation projects were often lengthy, months-long, or even year-long endeavors that are reliant on massive organizational change within companies' structures, today, the success hinges on agile transformations powered by no-code platforms.
No-code platforms such as EasySend, offer insurers the ability to transform and innovate at an unprecedented pace while still meeting their core goals. EasySend is a no-code platform that enables financial institutions, including insurance companies, to create digital customer journeys for a seamless customer experience.