Innovation in the insurance industry today can be summed up in one word: digital.
Digital’s impact on the insurance business–a traditional laggard when it comes to innovation–is staggering and expanding faster than ever.
Here’s an undeniable finding to digital’s power from a research study by our friends at Liberty and Safeco:
44% of the total survey participants labeled as “high digital adopters” had revenue growth greater than 10% versus 29% of “low digital adopters”. And the finding was consistent across all sizes of agencies.
Here are a few more telling findings from the research:
- 76% of high adopters use search engine optimization (SEO) compared to 15% of low adopters.
- 81% of high adopters plan to increase their digital marketing compared to 48% of low adopters.
- 47% of high adopters say they have expanded the geographic areas in which they acquire customers compared to 12% of low adopters.
High adopters are being rewarded at a greater level than low adopters. Why aren’t you adopting?
Change is happening but not fast enough.
Here’s the problem: In the pre-digital world your agency growth could make up for a lot of sins with good people that possess good habits, and instinctively show up and work hard.
In the digital world, the customer now has both hands on the steering wheel of the relationship and is deciding in big numbers they want a new path that gives them more control of the transaction, whether it’s a life insurance policy purchase or a subscribe and save order of furnace filters from Amazon.
And if they do decide to use an agent, they want 24/7 service… just like they get from other industries who long ago saw the handwriting on the wall.
The customer is in control. Think of them as the ultimate DIYer.
So where does that leave low adopters?
It is time to get past tired excuses.
We hear a lot of reasons from insurance agency owners why they haven’t committed to digital. Most revolve around two reasons:
- Time
- Money
- Belief
Well, digital has allowed customers to have the attention span of a gnat, so if your out-of-date processes and technology (and people?) are something less than instantly responsive you are kicked out of the game.
The customer will simply find a new agency–or a website driven by bots and automation–that will get it done.
And, believe it or not, your customers are online using digital tools, even those seniors on Medicare!
Checkmate.
Innovation starts with the customer
Here’s the stark reality for low adopters to digital innovation in insurance: their customer base–many of them low adopters themselves–is dying and no one is replacing them.
The new digital customer–which many low adopter agencies simply can’t attract–want instant gratification and service. They want it when they want it:
Content and communications that speak to their specific needs at that moment
Relationships where the provider knows and appreciates them
Sales, service and support they can manage without the provider’s intrusion
In a recent article, Superoffice.com highlighted the purchase attributes of “highly engaged customers”:
- Six times more likely to try a new product or service from their preferred brand
- Four times more likely to have referred your brand to their friends, family and connections
- Two times more likely to make a purchase with their preferred brand, even when a competitor has a better product or price
While insurance is not a high frequency purchase, besides Medicare Advantage of course, these attributes have become part of who these people are. Technology has enabled behaviors that simply weren’t possible five or 10 years ago.
Insurance agencies that ignore this do it at their own risk.
Six core capabilities are required to meet this new digital customer where they are. Each of these attributes will require a lot of heavy lifting across every organizational tower of your organization. And they will require significant investment in helping your team understand and deliver a new, higher level experience for customers.
- Superior customer experience.
- Accessibility through multiple channels, consistent processes and messaging.
- Personalization. Recognizing unique customer characteristics and needs at all touchpoints.
- Service at a click. Providing customers access to every component of their relationship with your agency (yes, this includes the carriers) through multiple methods, e.g. chat, text, etc.
- Personal touch. Giving customers multiple options to work with your agency (yes, many customers still want the option to talk with someone).
- Purchase flexibility. Multiple ways to purchase, e.g. with or without an agent.
The logical next question is where do you start?
The first place is to create a digital strategy as part of your overall business plan. A strategy will provide a roadmap and context for the tactics you ultimately choose.
Where we see agencies get tripped up in creating digital capabilities is leapfrogging the strategy and going straight to tactics. Often, someone has been in the owner’s ear about improving their website or developing a more sophisticated email capability. So, rather than slow things down with a strategy, they do what’s easy.
It never works.
Let us know if we can be of assistance. Good luck!
