Who owns the customer?

| 11 Apr 2019

I was in a speakers' panel at a conference between insurers and suppliers in Dubai in March this year, where the discussion turned towards customer ownership. One of the insurers in the panel argued that since the insurance is with them, they own the customer, where the counterargument was, that since the insurance was sold together with the product, the product-seller would own the customer...

That made me think because, apart from being a fruitless discussion, the notion of ‘customer ownership’ is becoming increasingly irrelevant – allow me to explain

 

The insurance distribution landscape is growing more and more complex every day, with new digital distribution channels, insurance platforms and ecosystems (where insurance plays an even smaller part) and the customers are free to choose from what is still homogenous insurance products from wide range of insurers through a wide range of channels

 

76 % of business leaders believe ecosystems will be main agent of change, and that current business models will be unrecognizable in 2024 (Accenture survey)

 

In this complex landscape, I don’t think it makes sense anymore to discuss the concept of customer ownership as it clear that many different companies are interacting with the customer, even if it is for a relatively simple insurance transaction

Frederik Bisbjerg is an international business developer with expertise in digital transformation, lastly working as Executive Vice President for Qatar Insurance Group (QIC). He is a sought-after expert for local and international business development, mostly working with companies seeking to leverage on digital opportunities- or to perform a complete digital redefinition of the business.

The customer journey as key

It all boils down to the customer journey that each customer will follow – this will differ significantly depending on through which channel the customer is buying the insurance – as an example, take the case of a customer buying a car insurance from an aggregator platform. Naturally, the journey starts at and through the aggregator platform, who then controls the complete buying experience until the policy has been issued

 

If the customer has questions during the purchase flow, these questions will most likely be directed to the aggregator’s service center

 

After the payment, the insurer sends the insurance policy alongside relevant documents and perhaps some marketing material as well. Now, if the customer has any questions to the policy or other information sent, these will be addressed to the insurer. Once contacted, the insurer may be able to cross-sell other product to the customer, increasing the share of wallet from that customer – add this to the customer journey

 

Suppose the customer has an accident. Initial contact will go to the insurer to open the claim and advice on next steps, most probably a referral to a car repair shop where the customer will take the car. This could be at the same company where the customer initially bought the car. The car dealer then already has a relationship with the customer and naturally builds on this before, during and after the repair of the car, being interested in the customer buying the next car from their company again

 

After the repair, the customer receives the car and has to close the claim with the insurer

 

When the time for renewal of the insurance comes, the aggregator reaches out with an offer for the renewal, not necessarily from the same insurer chosen by the customer in the first place

 

Who owns the customer here?

 

Introducing Share of Customer Ownership

It is necessary to introduce another way of talking about customer ownership; share of customer ownership, which is a relative measurement of how large a share of a given customer journey is controlled by each actor in the complete customer journey

 

Successful companies will understand their role and part to play in the complete customer journey and make sure to play it to perfection, including delivering correct, timely and exhaustive information to the next actor in the journey – only by understanding - and accepting - customer ‘ownership’ is a shared role between many actors

 

To control this, the actors in the customer journey must agree to common ‘rules of engagement’ with the customer, including gentlemen’s agreements of how to approach customers. Furthermore, they must find ways of exchanging information between each other to ensure the customer will feel the flow as one flow, as opposite to being redirected to many different companies – this may require developing APIs between the entities and introducing new internal processes to keep all data relevant and up to date

 

Influencing the customer during a shared journey

First, if you want a share of the customer contact pie, you have to ask permission at the first interaction with the customer, paying respect to the overall business relationship and gentlemen’s agreements; if the customer has bought through an external partner, insurers should not engage in a direct renewal dialogue, for example (in my opinion)

 

Based on this permission, it’s possible to begin a relevant dialogue with the customer and through this build a brand preference, which should be one of the major goals for insurers – this will reduce the dependency on the distribution channel and hence increase the ‘share of ownership’

 

I believe the battle for the customers’ attention in the future will be fought on the brand awareness battlegrounds – if you as insurer are capable of, through your share of the customer journey, creating a brand preference for your insurance products, you are more likely to be chosen next time the aggregator reaches out to ‘your’(!) customer with an offer from a competing insurer

 

Don’t do this!

A certain way to reduce your brand preference is to make your share of the customer journey difficult and remember ‘difficult’ can be as little as asking the customer to log in on your website without being able to transfer the credentials from the previous journey partner seamlessly. Apart from annoying the customers, you are at the same time pushing them away from your brand, as the extra actions required clearly tells the customer that you are not part of the brand from which the insurance was purchased  

 

What’s next?

I’m sure you’ll agree to the above example with the customer buying a car insurance and having a claim – this is, and has been, reality for quite some time now and I think it is time for insurers and other shareholders of the customer journey to accept that the notion of ‘customer ownership’ is a term of the past

 

In our interconnected world the customers are no longer anyone’s – customers today choose themselves who to interact with, how often and through what channels. It’s our jobs to be ready to serve them as seamlessly as possible. And this requires a much stronger degree of partnerships through the customer journey than what we’re seeing today

 

A first step after agreeing to this is to reach out to key partners and together start to build the shared customer journey. We’ve already done this successfully through an ‘almost-complete’ customer journey in the Middle East, so I’m very well aware of the difficulties it entails, including the internal and external silos that have to be broken down for this to work satisfactory for the customer

 

44 % of executives are concerned about sharing company data, assest and secrets (Accenture survey)

 

There is a real hurdle here, as most companies are very aware of the risks of exchanging and therefore reluctant to do so with partners. This is an issue that must be addressed and solved in a manner that’s acceptable as I don’t see a way around the shared customer journey – and hence the requirement for sharing data with the journey partners