Customer centric shift: will you sink or will you swim?

Put simply, if you cannot make sense of the data you are creating, how can you hope to utilise it for the benefit of your business?

On top of the data-tsunami is a fundamental shift in consumer power driven by innovation in technology. There are already some 5 billion Internet connections driving changes in the way consumers search for and act on information.

Consumers have stopped listening and want to be listened to. This is a significant challenge in the insurance world, where traditionally development has been 'inward out' focused on differentiation and competitive advantage.

Technology will force innovation. Agile organisations, which react to consumer empowerment and recognise that recommendations from friends, ease of interaction and personalisation will drive consumer behaviour, will succeed. Participation, insights, and simplicity will win business.

This shift to customer-centricity will cause many organisations difficulties, as the historic focus has typically been on operational excellence. This remains important but a focus on customer intimacy and simplicity of interaction will become the key enablers of differentiation and success. Neil McMurchy, of Gartner, talks of a shift from customer relationship management to customer-managed relationships.

Within the Asian insurance markets there are localised challenges as well. The global financial crisis has shrunk profits and many insurers need to lower expense ratios and operating costs. Bancassurance, and direct marketing, are emerging as new channels in many markets and consumers have been going to back to basics in their product selections, keeping margins low.

Celent** has recently surveyed the Asian insurance market and has shared that the five main areas for IT investment in 2010 are in technology infrastructure, technology agility, customer service, new business and distribution, and data integration and management analytics. All are customer-focused.

So how do you take advantage of these changes?

Firstly, ensure that you are able to capture, structure and analyse all of the data that you have. Make it relevant and make that relevance timely. Those really successful businesses of the future will be the ones able to make sense of the information they have.

Secondly, be able to communicate with all of your customers in their preferred channels. Multi-channel interaction is no longer a should-have, it is a must-have organisational capability. Recognise that every communication has either a negative or positive value. Customers now expect you to know as much about them as you need to know in order to anticipate and satisfy their explicit and implicit needs.

As an organisation, once you have recognised that a customer's experience is only as good as your organisation's weakest interaction you can really begin to address the challenge of how to adapt.

With thanks to contributing author Nick Smith, VP, Thunderhead.  Nick was a guest speaker at Target Harlosh's Insurance Executive Dinner, Aria Restaurant Sydney, October 2010. 

^*Gartner research statistics and Neil McMurchy statement from published research in 2010

^** Trends in Asian Insurance 2009 : A Business and Technology Outlook Based on a Survey of Asian Insurance CIOs June 2009