How digitalization is transforming customer understanding

Today's open-minded people do everything mobile, digitally and preferably via self-services. Why wait forever in line at a bank branch when we can make our payments via an e-banking app? We take out insurance policies via insurtechs, insurance start-ups that rely on digital technologies. With virtual insurance managers such as Feelix, Ted or Knip, we coordinate price and offer comparisons, right up to the conclusion of the contract via app. Or is that not the case?

"Sales and consulting will change particularly dramatically in the near future," reads the "Insurance Industry Compass 2017" by the F.A.Z. Institute and Sopra Steria AG. There is talk of cross-channel dialogue and customer contact management or an individual customer approach. In addition, significantly more video consulting and insurance apps are to be expected. The insurance executives surveyed expect more efficiency through the use of chatbots. However, the Namics study "Customer Experience in Private Pension Plans" looks at the specific factors that positively influence the customer experience in order to take out a private pension insurance policy. The status quo of current customer satisfaction is sobering. The survey of around 800 people shows: although they are satisfied overall, they are not enthusiastic about their financial service providers. The advice would not be oriented to the customer, criticize the study participants. 42 percent said that their insurance did not fit their needs. In addition, customers expect continuous customer journeys - that is, a seamless experience across all touch points up to the (purchase) decision.

Changing customer behaviour
In order to search for individual solutions in terms of old-age provision, the majority nowadays rely on various sources: Almost 70 percent actively seek information across all channels and compare different offers. Traditional advertising plays just as important a role as various online channels. This type of active research is increasing more and more; for young target groups such as Generation Y or Z, it is a matter of course. It is therefore important to create a suitable online offer where the customer can obtain comprehensive information and find the right solutions for his needs. But anyone who believes that the advisor has had his day in the wake of digital self-services is mistaken!

Customers still want to be advised - and not by machines. For almost 76 percent of the study participants, it is important to speak with an advisor; for around 51 percent, a personal conversation is even the decisive factor on the way to concluding a contract. Accordingly, advice is the linchpin of the entire customer journey. The crux: it does not currently meet the expectations of customers. What they want is an advisor who represents their interests and seeks the best solution for their needs. However, advisors are currently not perceived as trustworthy and credible - especially when it comes to explaining pension solutions and analyzing the current pension situation. More than half of the respondents perceive their advisor more as a salesman. It is therefore not surprising that a contract is seldom concluded in the course of the discussion: a whopping 72 percent demand a cooling-off period.

More trust and transparency in consulting
The study "Customer Experience in Private Pension Provision" recommends: "The various touchpoints during the customer journey must be optimised and, above all, better interlinked. Only in this way can customer needs be better served." These points of contact - marketing experts speak of touchpoints - are, for example, triggers that awaken the need for a private pension plan in the first place. These can be friends or acquaintances, online advertising or the tax advisor. But also the simulated pension situation with an online calculator or comparison portals are among these points that customers encounter on the way to concluding a contract. Up to this point, two factors in particular are elementary: Does the solution meet the customer's needs and is there an optimal price-performance ratio? But trust in the customer advisor also plays a decisive role. In order to build this trust, the consultation must be transparent: on the one hand, customers want to be able to

"Digitized processes should not replace consulting."

They need to be able to understand what happens to their information and how its use influences the selection of a suitable solution. On the other hand, they expect the consultant to disclose the costs of products and services to them and to design processes that are comprehensible up to the conclusion of the consultation.

Improve customer service with digital tools
In addition to the physical consultation, digitalisation offers additional opportunities to bring a pension solution closer to the customer. Digital aids such as calculators or other interactive tools can help to structure the consultation. They help to create a cooperative situation in which the advisor acts more as a moderator and is perceived less as a salesperson. Video or chat can provide better access to the expert to clarify questions that arise throughout the process - for example, if there are still questions about the contract after an appointment. However, the road to location- and time-independent consulting via video chat and co-browsing is still long: 45 percent of participants currently reject such consulting.

For example, offers can be exchanged with the customer advisor via customer portals. Interactive visualizations also offer added value for the customer. They illustrate how changing needs or situations affect a product solution, for example when it comes to explaining what an early pension means for retirement capital. In addition, digitalized processes can ensure greater customer satisfaction, for example when it comes to reporting claims. Pictures or videos after accidents should be uploaded via a claims app and reduce the time and effort required for appraisals. Artificial intelligence, however, is not yet an issue according to the "Insurance Industry Compass".

Important when using digital tools: The data specified or already known about the customer must be reused to enable consistency. For this, the use of a customer relationship management system (CRM) for customer care is recommended.

Combining classic and digital consulting
The study results show that digitalised processes should not replace advice. For complex products such as private pension provision, the personal discussion remains a central aspect. However, digitization and the needs of customers mean that a large number of touchpoints are relevant for the customer journey. As an insurer, it is important to reconcile these touchpoints while always keeping the customer's perspective in mind. Classic touchpoints such as advice will therefore remain, but their role will become the (digital) journey of a customer.
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