Tech Line

McKinsey Report: Top-notch Customer Service Ensures Success for Insurers

McKinsey & Co. recently launched a survey of more than 8,500 insurance customers of the 40 largest North American insurance carriers. The results were reported in “Elevating customer experience: A win–win for insurers and customers.” Among the main insights gleaned: Delivering a winning customer experience (CX) is a strong predictor and driver of successful financial and organizational outcomes in the insurance world.

According to the report, “customer experience is a key differentiator and source of competitive advantage in more ways than one. Insurers often find that investing in CX also drives operational efficiencies and that these ‘stacked wins’ combine to improve the bottom line. By harnessing the potential of CX and overcoming its pitfalls, insurers can deliver superior experience and capture the significant value at stake.”

So, what are some of the ways insurers need to think about to become best-in-class at CX?

  • If you don’t personalize the customer experience, you are already losing the battle. Insurance customers expect personalized CX, executed in an omnichannel fashion, through seamless end-to-end journeys. If it’s not personalized and aligned with the customer’s buying intent signals, it falls flat.
  • The best CX companies “demonstrated stronger revenue growth, stronger EBIT growth [earnings before interest and taxes], lower expense ratios, and higher employee satisfaction scores.”
  • Considering how long it takes to win an opportunity, there is no time to waste in upgrading and investing in your CX strategy.
  • And if you haven’t already guessed, one of the primary reasons people don’t buy from an insurance company is poor customer experience.

The McKinsey report suggests some key actions to take to ensure top-notch customer experience:

  • Create seamless customer journeys. Most customers only interact with their carrier a few times a year, so you must get the experience right during the few opportunities you have.
  • Empower the customer. Allow the customer to interact with their account via a digital platform. We are all living in an empowered consumer world, so companies must provide digital capabilities similar to those offered by ecommerce consumer brands.
  • Be human. Insurers can’t sacrifice the human touch to go all-digital, however. People still trust people more than they do computers. Agents are the greatest resource for information and resolving issues—a huge brand building opportunity. “Dial 3 for customer service” doesn’t cut it. Consumers want quick access to a real agent.
  • One size doesn’t fit all. Solve for a diverse set of customer preferences. Customers contact insurance companies for a variety of reasons, so be prepared to create a great experience by providing a personalized response.
  • Educate the consumer. Agents are a trusted source of product information. Insurance is complex no matter what the type, so be prepared to help individuals understand what they’re getting and how it affects them.
  • Seek feedback from employees and agents. Get insight from your internal teams and agents to create that great customer experience you need. They understand the customers best and can be invaluable in helping move your CX strategy ahead.

Adding the Human Touch: Direct Mail

According to a PFL blog written by Sam Greengard (“Business Must Understand Context to Create the Right CX At the Right Time”), “as organizations scale up business initiatives, data points replace physical touch points. Duplicating—or, at least, approximating—human interaction becomes more difficult…and the stakes are magnified.”

In fact, there’s often an overreliance on digital communication when conventional mail or the telephone would produce better results. “Too often, businesses fail to put customers first. They fail to view things from the customer’s point of view and ensure that the message truly speaks to them,” said Shayla McKnight, Marketing Automation Manager for PFL.

Modern direct mail combines the emotional power of offline marketing with the measurement and predictability of digital​ marketing.​ ​B​rands can deliver one-to-one personalization at scale​,​ gain attention and engagement​, ​and keep it. In other words, it is now possible to deliver authentic, powerful moments by creating impactful direct mail that is data driven.  

By incorporating modern direct mail into the mix, insurers can discover a more evolved strategy that blends and orchestrates digital and physical communications seamlessly. The reality is that customers don’t distinguish between online and offline interactions. They are simply looking for a flawless experience that simplifies that business or interaction they want to conduct. The bottom line: When a business fully understands context it can serve up the right experience at the right time.

Direct and physical mail are great enablers of personalized experiences and integrate seamlessly into customer journeys thanks to native integrations with Salesforce, Iterable, and other tools. Nothing cuts through the digital overload customers experience today than a timely piece of direct mail.  

According to a 2022 study overseen by Compu-Mail and Forbes, digital content competes with about 10,000 ads and more than 1,000 promotional emails weekly. Conversely, the average consumer receives 13 to 15 pieces of direct mail each week. Would you rather be 1/10,000 or 1/15?

Furthermore, Neuroscience tells us that direct mail is unique in the hands of the recipient. Data shows it takes 21 percent less cognitive effort to process the information on a printed piece than on a screen. And consumers’ motivation to respond to physical mail is 20 percent higher than it is with digital.

For the full story about how and why it is important for insurers to create great customer experiences, take the time to read the full report from McKinsey. Then, to find out more about adding direct mail to your CX strategy to elevate the experience, contact PFL for more information and to book a demo.