What customers really want – and how to give it to them

A former boss of Coca-Cola once admitted that half his company’s advertising budget went to waste.

The only problem, he said, was that no one knew which half.

I occasionally feel the same way about what we spend in insurance to learn about customer preferences and expectations. It’s a vital investment, but sometimes it’s a devil of a job to reach definite conclusions. And just when you think you’ve got the answers, you find the points of reference have shifted or evolved into a whole new set of challenges.

What is clear is that if we really want to learn how to serve customers better, we need to have a truly open mind and avoid sweeping generalisations.

For example, are we right to assume that insurance is and always will be a distress purchase? That people only buy because of legal obligation or the weight of circumstance affecting their business or personal responsibilities? Are our products really always bought grudgingly, with little or no perceived value?

I’m not so sure. Take health insurance. We all see the value of having a product that promises to enhance the care on offer to our family. All health insurers have stories about those who actually make financial sacrifices to maintain or enhance their cover. Brokers will tell you it is one of those rare areas where people are enthusiastic about seeking out the best they can afford.

The same goes for travel. People quantify the risks, they think about what it has taken to buy the holiday and they understand the value the trip has in terms of rest, relaxation and fun. From here, it is not difficult to appreciate the value of protection if things go wrong.

Surely, corporate buyers also understand what insurance can do for their business. If you widen the definition of what we do to “risk advisers”, we are definitely seen as valued allies rather than unwelcome premium collectors.

Let’s also be clear that, contrary to some opinion, not every consumer wants the same sort of policy, sold and administered in the same way. Some may indeed want the cheapest cover, sold over the internet. But others want the best policy at the best price – and they also want advice both when they buy and during the term.

Many customers still prefer to buy face-to-face, as the success of high-street brokers such as Swinton and A Plan demonstrates. But they may well source information online or by phone too and it’s up to us to satisfy the demand and still remain agile enough to do something different if required. Let’s always resist the herd instinct that offers the wrong answer, but quickly and easily. Call centres in New Delhi spring to mind.

There are other issues. How do we reconcile the fact that people want to drive cost out of insurance but still want five-star claims service? How do we convince them that we scrutinise claims so vigorously to protect honest policyholders?

At least research offers myriad ways to listen to our customers. The problem is that we sometimes don’t want to hear what they have to say. We must ditch the politics, “systems issues” and assumptions if we are going to make progress.

Every business learns its own lessons and reaches different conclusions about keeping customers happy (sustaining a competitive market). But here are a few thoughts that I’ve drawn from my recent travels:

• Jargon bad, plain English good
• Avoid small print
• Communication, communication, communication (especially during a claim)
• Ditch scripts and protocols and talk sensibly to customers
• Let brokers and clients speak to people who know
• Make decision-making quick, nimble and accurate
• Keep strategy simple
• You’re never too senior to serve on the front line.

If we want to keep customers content, we must truly listen to what they want and then develop solutions that they have yet to realise they need. Not easy perhaps, but definitely worth the effort.