Don’t Throw All Your Eggs into the Digital Basket: Why Insurance Companies Should Employ a Hybrid CX Approach
Digital. Digital. Digital. It’s been all the talk, not just in the insurance area, but in every industry.
If you want to stay competitive and maintain customer loyalty you need to go digital. Customers don’t want call centres and brick and mortar locations any more, they want digital experiences, right?
New research from Forrester’s Customer Experience Index (CX Index™) reveals that committing to a full-on digital approach may actually lead to failure.
What the CX Index revealed
Forrester’s CX Index measures how well a brand’s CX efforts strengthen the loyalty of its customers. In 2017, the Index benchmarked the CX quality of 314 US brands, studying CX across 13 channel types (five physical and seven digital ones).
So what did the Index reveal?
Between 2016 and 2017, the quality of digital customer experiences declined 1%, this despite the fact that companies have rolled out more digital channels.
In comparison, the Index confirmed that hybrid customer experiences -- experiences that are a combination of digital and physical elements—registered a 1% gain.
1% may not seem like a lot but consider this: a 1% improvement in CX for an auto & home insurance provider can yield a total revenue increase of north of $200 million dollars.
Source: Forrester Webcast: “Customers Prefer a Hybrid Experience”.
Why Hybrid CX performs better
When developing your insurance organization’s CX approach, it’s important to remember that customers don’t want digital experiences they want better experiences. According to Forrester’s CX Index the approach that provides the best experiences is a hybrid one.
So why does a hybrid approach to CX work better than a digital one or a traditional physical one? It all comes down to emotion.
How an experience makes a customer feel has the biggest influence on their loyalty to a brand than anything else.
When it comes to making customers feel good about their experience, hybrid CX crushes digital and physical CX, dominating across the six positive emotions that most often drive customer loyalty: feeling appreciated, confident, delighted, happy, respected and valued.
Source: Forrester’s Data Customer Experience Index Online Survey, US Consumers 2017
This also explains why, in Forrester’s CX Index, hybrid CX led or tied for the lead for customer experience quality no matter what the gender, income level or age group, including customers age 65 and older.
People still crave analogue experiences in addition to digital. Research by IDC indicates that 79% of people want human interactions to form a part of customer service.
Avoid being reactionary
With this new found insight, those insurers who are reactionary in nature will immediately start randomly adding physical elements into their digital customer journeys.
This would be a mistake.
By deploying more digital channels all you may accomplish is deploying more digital stuff. Don’t just deploy digital channels to deploy digital channels.
A more measured approach to architecting a hybrid CX is recommended.
A strategic approach to Hybrid CX
To succeed at hybrid CX, you must act strategically. To do so, follow these steps:
- Identify the right channel at the lowest cost for each customer interaction. Sometimes it will be a physical channel, sometimes it will be a digital channel. To determine which channel is the right one, conduct a cost-benefits analysis. Remember, your end goal is to drive revenue via customer loyalty.
- If you need to partner with an outside firm, make sure they are experts at designing hybrid experiences. Do your due diligence to make sure you are leveraging consultancies with a proven track record of developing and implementing hybrid CX.
- Invest in technologies that take hybrid experiences to the next level. Keep the next generation of hybrid CX in mind when considering which technologies to invest in and you’ll future-proof your CX efforts.
- Organize by customer journey not by channel. Customers don’t want channel experiences, they want better experiences. By starting your strategic planning with the customer's journey, you will know whether the channel of choice for each interaction should be a physical one or a digital one.