THE NEW, NEW WORLD

We need to embrace the unfamiliar and capitalize on abundant opportunities

By Troy Korsgaden

During the Age of Discovery, after Europeans made landfall in what would later be called the Americas, new trade routes brought new power, riches and wealth to the countries of Europe. Suddenly, despite the fact that the new order of things was unfamiliar, opportunities emerged that no one had ever dreamed were possible.

In today’s rapidly changing environment, many in the insurance arena feel like we are in a new age of discovery. We are learning how to integrate technology, new ways to meet our clients’ needs, and how to navigate the waters of legislative changes and myriad other factors outside our realm of control.

It might feel unfamiliar, but behind every perceived challenge lies a huge opportunity.

Consumer expectations have never been higher, and that’s true across every industry. Customers are emboldened by their ability to purchase products in retail from different delivery systems, all simultaneously. They control the choice to purchase through call centers, digitally or in stores; whether or not to request immediate delivery; and other key decisions. The customers we serve in the insurance and financial services industry have the same types of expectations with us as they do in many other industries.

Focus on creating a seamless experience for your customers, regardless of the platform you are using. Ask your best customers what they like about the way they interact with you—and more important, how you could improve.

Today’s new order requires that we discover new and improved ways to compete for retention of current customers while growing the customer base.

According to the J.D. Power 2019 U.S. Insurance Shopping Study^SM, only 2% to 3% of new customers enter the personal lines auto insurance market each year. With so few potential new customers, insurers must do a better job of taking market share from competitors. The report states, “Success in driving new-customer acquisition comes down to having a strong brand and meeting customer expectations of convenience and competitive price—for which direct and independent agents are best positioned.”

The winners in the “New World” will have a robust priority list to focus on. To make sure you’re one of these winners, pay special attention to the following opportunities to differentiate yourself.

Provide unrivaled service

We are living in an age when the customer is in control. The insurance industry has lagged behind in recalibrating this very important way of doing business.

In the past, insurance providers have told customers what to buy, when to buy, and how to buy. Our industry has always been focused on sales and then service. Customers are no longer satisfied with this dynamic. We must turn that around and focus on service and then sales.

Making this happen requires that we break the traditional cycle of responding to requests for quotes on one type of insurance. When we are fortunate enough to have a prospect call us for a quote on auto insurance, for example, we need to begin at that moment to learn about that individual’s unique needs—beyond auto insurance. This is the critical point when you begin to build a relationship and provide an unrivaled customer experience.

No longer can we just provide a quote and hang up. We must assure all callers that we will provide the quotes they want, while stressing that we want to be responsible enough to offer protection for everything they treasure. To make this pivot flawlessly requires that you develop scripts and have everyone in your agency learn them well.

The priority is no longer on making a sale. Instead, it’s all about customer experience. PwC research found that 86% of buyers are willing to pay more for a great customer experience. And a Walker study, titled Customers 2020: A Progress Report, shows that by the end of this year, customer experience will overtake price and product as the key brand differentiator.

This is the new order for all services and products that meet customers’ needs individually, as families, and/or as businesses. So, we need to stop focusing on price and product, even though they have been our lifeblood for decades, and start focusing on customer experience.

Create a seamless customer ecosystem

Without a doubt, one of the biggest issues facing our industry is creating a seamless customer ecosystem. We are living in an Omni channel world—a world in which customers want access to all things within the convenience and comfort of a single channel.

According to Accenture’s 2019 Global Financial Services Consumer Study—Insurance, a seamless multi-channel experience is a priority for the majority of customers. The report reveals that 66% of consumers don’t mind which channel they use; their main concern is to get what they want quickly and easily. The report advises, “Carriers should look at bundled offerings that combine products and services from insurers and other vendors to give customers a one-stop shop.”

Independent agents and brokers have a unique opportunity to collaborate with one another in ways they’ve never considered before. The peers you used to consider competitors should now be your collaborators. Find other independent agents who have complementary but different areas of expertise. Pool your resources to offer a more robust range of products and services. A collaboration of experts is needed to ensure growth and survival in the future.

The key is to offer everything to your client base. This will improve retention of your current business, give you marketing traction for potential business, and help ensure growth for your product suite. Most important, it will create a convenient, seamless customer experience. Be the gateway to all things insurance and financial services.

Customers are demanding now that their needs be put first. Ultimately, if we do not put their needs first, we will have no customers to serve.

Customers today expect companies to adapt to new trends quickly. In the past, our industry has applied incremental change in the technology/digital arena. The ecosystem has been clunky, at best. Customers notice the divide when they leave a digital experience to go to their local advisor, or when they leave their local advisor to go to carrier phone representatives. Such noticeable disruption in the service they receive results in confusion and uneasy feelings. Incremental change is no longer enough.

Focus on creating a seamless experience for your customers, regardless of the platform you are using. Ask your best customers what they like about the way they interact with you—and more important, how you could improve. Solicit feedback and use it as fuel to ignite change in the way you do business.

Customers are demanding now that their needs be put first. Ultimately, if we do not put their needs first, we will have no customers to serve.

The 2019 J.D. Power study mentioned earlier reveals that customers’ reliance on agents has declined by 33% over the past 20 years. Even customers who end up buying from local agents are much more likely today to do research online before they meet with an agent in person.

Increasing numbers of customers prefer to purchase auto insurance through online platforms. If we do not put the time, money and effort in now to plug the hole, we will soon begin to see our customers purchasing more of their insurance and financial services needs that way. The trend toward direct-to-consumer sales models threatens to eliminate the need for local advisors. We cannot let that happen. The value that local advisors provide to consumers can never be matched or replaced. We cannot lose the opportunity to provide consumers with the multiline experience.

If these statements disturb you, they should. We all should be a little “disturbed” in the direction of impending changes approaching us. Those of us who are willing to get out in front of it and position ourselves to align with the customer-centric environment will thrive.

What can you offer to your prospects and clients that no one else has thought of yet? How can you reinvent yourself to meet this new dynamic? Maybe you could become known as the agent who shows up at the site of an auto accident with blankets, water and reassurance that you will personally see your customers’ claims through to the end.

Those of us who are not willing to get in front of the new dynamic will either get completely gobbled up or shrink down to a level of insignificance. This is not intended as a threat or even as shock value; this is the cold, hard truth that our industry is facing today.

Upgrade your technology

New technologies are popping up every day. We need to place a high priority and focus on upgrading those technologies we use, making them seamless, and using platforms that can be plugged in to new technology opportunities. There is an arms race going on in the insurance industry. We must get more flexible technology platforms in place, and the industry is well aware of it. The leading area of importance is technology that provides cost-effective ways to underwrite, distribute and package products for delivery to local customers, regardless of their geographic areas and socio-economic lines.

The bottom line is this: Our digital initiatives need to continue to expand. The focus needs to be centered on seamless execution of distribution locally, on 1-800 call centers, and on any and all new technology coming down the pike.

The need to obtain a complete 360-degree view of the customer has never been greater. We can never achieve success with just bits and pieces of customer intel gathered here and there. We must gain a complete 360-degree view that is transparent to everyone involved. The customer can see it. The carrier can see it. The local firm/or agency can see it. Information should be available for use at any level of the organization. This will enhance the service and product offerings for everyone involved.

Seek out top talent

Whether there are more jobs than people or vice versa, most important for our industry is that we attract the right people. Now is the perfect time to offer quality jobs to quality candidates. Whether the individual is a tenured employee or a college graduate, the industry has much to offer today.

Our industry isn’t stodgy anymore. We can pique the interest of younger candidates. Our use of technology has just scratched the surface, through our use of drones for claims; the use of analytics for underwriting and marketing; digital sales platforms; and more. As our technology reach widens, so will the talent pool of individuals looking to join the industry.

The opportunity has never been greater to position ourselves in this expanding market.

When was the last time you took a hard look at your recruiting profile? For example, if you have always required a college degree, why? Is it necessary? Maybe not. As we are moving from a sales focus to a customer experience focus, chances are, you might need to look for a new type of candidate who can help your practice thrive.

Hire people who are different from you. If you aren’t as tech-savvy as you’d like to be, hire someone who is. And how well does your agency mirror your community? Hire people from different backgrounds to reach markets you have not penetrated yet.

Adding new talent and keeping the face of your business fresh is important. Just as important is retooling existing employees and team members. Your existing payroll accounts for a minimum of 30% of your overall revenue. Are you making the most of this 30%? Chances are, you have room for improvement. We all do.

The New World we are doing business in gives us the perfect canvas on which we can update and modernize our procedures and systems to align with the new industry landscape.

Make change happen

Now, if your ideas for how to respond to the current environment of rapid change have been met with skepticism, or if you lack the infrastructure to implement those ideas, take your ideas to the next level of authority. As reported in the J.D. Power U.S. Independent Agent Performance and Satisfaction Study^SM, satisfaction among independent agents and brokers impacts the profitability of an insurance company. This means that you are ultimately in the driver’s seat. Gather your facts and figures and get everyone on board with your efforts to meet customers’ expectations.

Changes in buying patterns are proving that the customer is in control. Factors we used to rely on like brand loyalty and multigenerational clients are now being replaced with factors such as convenience and abundant choices. Expecting the phone to ring or for a client to walk in based on the logo on your sign is no longer a viable marketing strategy.

To compete in an ever-changing environment, the way you do business must also be ever changing. Do not allow unfamiliar trends to overwhelm or discourage you. Instead, allow them to evoke excitement and recharge your batteries. We will no longer worry about becoming stagnant; rather, we will reap the benefits of the exciting and challenging opportunities that are emerging from every direction in this new, new world.

The author

Troy Korsgaden is the principal of Korsgaden International, which specializes in global marketing, distribution, agency building and technology strategies for many of the world’s largest insurance carriers and financial services companies. As an insurance and financial services consultant, speaker and author, Korsgaden says his mission is to help the insurance industry and its representatives wake up to the radical transformation taking place. For more information, visit korsgaden.com.