Harvard Business Review defines the New Experience Economy as the fourth evolution of economic value, which includes commodities, products, services, and now, experiences. It is at this point where the product is most differentiated and pricing most premium.
In a commoditizing marketplace such as personal lines, a personal experience is an opportunity for carriers to differentiate themselves from one another and create value that the insured will reward with retention and share of wallet.
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Personalization must be genuine – inauthentic marketing attempts are met with scrutiny and amplified on social media with risk to brand reputation and customer loyalty. True personalization requires three main elements:
- Know Me – data that is enabled AI and ML continuously updates to provide analytics relevant to the customer
- Learn About Me – preferences and interactions work within the context of a customer’s life to provide real-time, frictionless service
- Tell Me – tailored, authentic messages are based on this data to deliver the right message at the right time to the right audience
Done right, this approach increases loyalty, growth opportunities, and overall profitability for the carrier:
- A recent study in life insurance indicated that knowing the customer and tailoring the next best offer/action led to a reduction in customer acquisition costs by up to 50%, generation of 5-10% of new premiums, and reduced customer churn by up to 30%
- It is estimated that insurers can automate 50-60% of back-office operations and displace 46% of processing roles
- Insurers using predictive analytics grew premiums by 53% compared to a market average of 18%
Continually learning about the customer and applying it to the relationship creates authentic, individual experiences that result in personalization.
At Perficient, we leverage our end-to-end capabilities to create personalization roadmaps and solutions for many leading carriers. To find out how we can help you navigate the New Experience Economy through enterprise-wide digital transformation that puts an emphasis on personalization, feel free to reach out to me at email@example.com.