Your Natural Best Friend will certainly know that you are sad. But will your customer service chat bot know?

AI and machine learning things are moving right along. A few months ago, in a Celent report, I predicted the emergence of a “Natural Best Friend,” a term combining “natural language” and “best friends forever.” However, there is nothing organic about the Natural Best Friend; it is completely a product of technology. The Natural Best Friend will at some point pass the Turing Test (interacting with a person in a way that is indistinguishable from how another person would interact). Natural Best Friends will become sources of not only trusted information and advice, but also of companionship, friendship, and perhaps even some form of wisdom and intimacy. The use of the Natural Best Friend has obvious applications in throughout the entire insurance life cycle: from underwriting to service to claims. Even the possible characteristics of companionship, friendship, wisdom, and intimacy may be of use to insurers. Consider insurers’ brands, built over decades, which stand for trust, reliability, and succor. Once it becomes socially normal to have a personal relationship with the Natural Best Friend, insurers’ (and many other service industries’) sales and service processes will change dramatically. IBM has just announced it is developing customer service software that can interpret the customer’s emotional state by the content and pattern of the customer’s chat messages. Somewhere in the future, the software may be able to analyze a customer’s voice to determine the emotional playing field. Here’s a link to the WSJ story (warning: this might be behind a paywall). The family tree that will produce a baby boom of Natural Best Friends now has a new branch.

Why the customer experience matters

At Celent, we have the opportunity to sit through several dozen demos a year of core systems. And in most demos, I find myself having sympathy for the ultimate end-user. The first thing that pops into my head is not how powerful the system is (and they often are), but how grateful I am not to be an underwriting assistant (or claims adjuster or CSR) that would have to learn how to navigate this application in front of me. The industry spends much time poking fun at the green screens from the previous century (ok, of this year in some insurers, you know who you are!). But the navigation and thought for the user experience has progressed little from those days. In the worst cases, it seems that the green screen has simply been re-coded in .NET along with easy access to specific screens through magic keys like F7. A Harvard Business Review blog highlighted some interesting facts about Android and iOS. Whilst Android outsells Apple phones, Apple iOS users conduct more e-business than their Android colleagues. So what is that about? The blog goes onto explain that it is the manner in which Apple devices support customer engagement that result in these same users doing more e-commerce. The fact that the face of core systems is misaligned with what might work best for the user is in my mind related to how we as an industry frame, discuss and talk about customers. Susan Scott  makes some great points on how we talk about customer centricity instead of customer connectivity. She points out certain tells of organisations that get this wrong. Do you recognise any of these? They include relying on  software to build relationships, using language that turns the customer off, and use of the term “customer facing” (If we don’t all care deeply about the customer of our business, then what are we doing?) Most insurer websites can be found wanting, as can the internal systems that staff use when they interact with these customers. For a smart industry, the link between customer engagement and user experience appears to be a blind spot. Inspired by companies that do get it right, I believe we should set a higher bar on the expectations. This is more than aesthetics. And let’s not forget the real skill in getting really engaging customers through technology.  Let’s not leave it up to the smart geeks who’s real skills are the wiring of the system.

Growth, growth and growth, and throw out the customer service whilst you are at it!

Perhaps it’s the dark gray winter skies that are making me curmudgeonly but I’m having one of those weeks, and at the centre of my frustration are the motor insurers in the United Kingdom.

Changing car has resulted in having to change car insurer or pay three times my current premium. I’d happily stay with the current insurer, give or take a few percentage points, but having to pay three times over the odds helps me overcome my inertia to change. I also lost the no claims bonus as I’d canceled policy four weeks before the end of term date – why isn’t the no claims discount follow policy holder not policy? I lost count of the minutes listening to awful muzak is some call centre queue. One call centre company had to pass me on to another section, who was then unavailable and I was told to call back. Remind me who the customer is here?

And of all the insurers I was dealing with, not one offered a customer portal where I could change my details or cancel my policy. That would have put the power back into my hands as the consumer and would have reduced the pressure on their call centres.

All this speaks to a larger trend in the UK. Our new CIO report for UK insurers makes the point that 2011 is all about growth. Terrific for the shareholders but increasingly a poor deal for the consumer.

Is there great customer service out there? I am sure there is. I’ve even heard about it. But for middle-income, middle England buying personal lines insurance, it’s hard to find. The great economic theories espouse that poorly performing business will be punished by customers moving their money for better deals. But in this case, what choice does the consumer have? As insurers chase down growth, and continue to invest in the front office (see our report), existing policy holders are left with inflexible service and often brutal customer experience.

Where might this all end? What are the factors that could change the state of play? These are great questions for which I have no answer. I’ve sat on conference panels with greater minds than mine, and they shake their heads over the state of personal lines. CEO’s bemoan the power of the aggregator and lack of customer loyalty. As a customer, this is my lament for customer service. I hope someone can prove me wrong.

Is it possible to have a positive customer service experience?

In my last blog, I shared with you the challenges of having an unusual risk (a house with possible subsidence). Once more, the personal experience of being an insurance consumer warrants mentioning on this blog as it is a great anecdote representing a broader industry challenge. Almost 4-weeks have elapsed, and I am still waiting for my house insurer to come back to me on whether the premium has changed, based on the surveyor report. I now have an email address of a customer service technician who I bother weekly. But the process leaves me immensely frustrated and annoyed at the insurer. Questions in my mind –

· The renewal cost to the insurer is a function of the amount of time (read resources) a policy requires in it’s handling, so just how much is this renewal costing them?

· What technology is in place, and how much automation is being leveraged? Do they have a workflow system?

· How paperless is the process? Have they scanned in the surveyor documents to reduce the friction costs of passing this through the organization?

· Have they considered using mobile updates to the customer to keep them informed of progress? My on-line supermarket uses a similar process with fantastic results.

But all is not lost – there is a glimmer of hope for UK PLC customer service. I had an email from Kwik-Fit just after my last blog post, who commiserated with me and informed me of their unuique approach to customer service in personal lines (motor only at this point). This company has account managers assigned to customers and this account manager is responsible for the sale, and post-sale service. As a Kwik-fit customer, I would have this person’s name, and direct number. Any changes that I need to make, or any queries at renewal, I can call this person directly. What a refreshing change. A key element to customer service is keeping the customer informed and such direct access into the organization does just that. I challenge my house insurer to take a note out of the customer-service booklet of Kwik-fit. The old adage is that insurance is sold and not bought, inferring that it’s a forced purchase. Whilst that is true, insurers could learn a lot from best practice in the retail industry who know the value of looking after the customer. So for this month, the Onion award goes to my house insurer (who shall remain nameless), and the Orchid Award goes to Kwik-fit. NOTE: This author has no shares or any other links to Kwik-fit!