Build Better Relationships
Speaking to Jo Causon, CEO at The Institute of Customer Service, ahead of their annual conference and awards, we dove into the facts and figures surrounding the UK Customer Satisfaction Index, published in January 2019. While the insurance industry is improving, there is still a long way to go in terms of improving our customers’ experiences and – along with it – our own business performance.
Q. What is the definition of good customer service?
A. Customer service and the customer experience is critical to the performance of the UK. Nearly 80% of our GDP in the UK is services related and nearly 70% of our workforce are in customer-related roles. Furthermore, the cost of poor customer service to the UK is phenomenal – it is in the region of £128bn a year. That is the time that we are wasting as individuals trying to resolve our own problems during working hours, as organisations rectifying problems they have themselves created and time spent on solving service issues caused by suppliers.
The insurance sector has slightly improved compared to last year in the UK Customer Satisfaction Index (UKCSI). The sector now has a rating of 79.8, and ranks 6th out of13. It is good to see some movement, but there are still many areas that the insurance industry needs to focus on, and those areas where improvement particularly needs to be driven is around the commitment and energy that insurers are putting into developing their people and the whole end-to-end experience.
Q. How does the UKCSI rank each sector?
A. Twice a year we publish the UKCSI and it has over 40,000 responses. We have a range of panels and we ask consumers whether they have had an experience with an organisation within the last six months and what that experience was like against 35 different metrics. This is based on someone’s actual experience and it is the largest survey of its kind in the UK, making it statistically valid and robust because it covers all geographies and age groups among other factors in the UK.
In the latest UKCSI, we have started not only to plot experience but to understand whether consumers believe the organisation has a solid customer ethos. We also examine whether there is an emotional connection and the notion of trust. Given the sector in hand, trust is really important. Finally, we ask about ethics. The combination of all these dimensions are important in terms of how organisations fare in the UKCSI.
Q. How would you suggest insurers and claims professionals better engage with their customers?
A. There are 25 insurance companies within the UKCSI and what they need to be doing is making sure that their experience is effective. Looking at their scores, speed of resolving a complaint, the handling of the complaint and then the outcome of the complaint have attracted some of the largest range of scores. To improve management of a complaint or any issues or difficulties, insurers can make sure there are not too many “hand-offs” throughout the experience.
People often assume the challenges hindering customer engagement are around cost, but it isn’t just about cost. About 13% of customers are upset about cost. The actual experience is where the biggest challenges are: suitability of the service equals 31%, quality of the service equals 29% and staff competence is just under 22%. Insurers and claims professionals need to be focusing their time on their staff, the promises they make customers and making sure they are doing that consistently across the whole experience.
People often assume the challenges hindering customer engagement are around cost, but it isn’t just about cost.
The industry talks continually about price, and I understand in the areas of home and motor insurance that it is a very competitive industry, but it isn’t just about price. A significant number of us would pay much more for a better customer experience. There is a link between those organisations that have a higher level of customer satisfaction and higher trust scores. Those with high customer satisfaction get a better outcome in terms of their financial performance.
Those organisations with high customer satisfaction get a better outcome in terms of their financial performance.
Q. Why is trust such an important aspect of customer service and retention?
A. Trust is a key differentiator. If I have a good customer experience and build a good relationship with an organisation, my trust for them increases. At some point all organisations drop the ball – it’s only normal, we’re human – but if I have had a good experience with that business it buys a degree of loyalty from me, and if the ball does drop and they apologise and rectify the issue, then I have a better affinity to that brand.
Trust is also important when dealing with data, because if I don’t trust an organisation, I won’t give them my data. As we look into the future, the world will become a much more seamless and connected world, and if an insurance company doesn’t have my data then they can’t personalise that service for me, and if you can’t personalise that service, then you are going to become less relevant.
Q. As technology is evolving, quite rapidly at that, will this have an effect on the customer journey and what can we expect to see as technology continues to evolve?
A. The advancement of AI has got to be a positive thing. From the research that we have done, it is very clear that the future will be about having a blended experience. Where something is generally transactional and you don’t need to speak to someone, then having an efficient technological base is much more effective. However, there are other matters that are much more complex where you will need to speak to a human being, and it is this blend that we will begin to see more of as we move forward.
Firms should use technology to enable, but make sure it is viewed through the lens of the customer. It is about being customer-centric, rather than product centred. Most of the technology we are seeing currently is in the back office and not proactively being used to drive things forward. The sector where technology is driving things forward is in banking. The banking sector is much more advanced in using apps and proactively using AI and predictive analytics alert and better serve customers. The insurance industry needs to be proactive rather than reactive.
Use technology to enable but make sure the technology is drawn through the lens of the customer.
Q. As technology does develop, why is it important that we still have a human element in the process of customer service?
A. We are on the cusp of some quite interesting and exciting things, but because that will be the future, we need to be clear about what exactly we want artificial intelligence to do, because the point of it is that it learns. Our research shows that people are quite happy to use artificial intelligence for transactional aspects, when it is deployed to make moral decisions, i.e. using algorithms to determine whether a person can drive given their past behaviour. Then we become less comfortable. We really need to think about that as we go forward.
Q. How does employee engagement affect the customer’s experience?
A. Hugely! For every 1% increase in employee engagement, you get nearly a 0.5% increase in customer satisfaction. There is a direct correlation. If you think about this in a simplistic way, then it becomes very obvious; if an employee is engaged and enjoys their work, they feel like they are adding value and making a difference.
For every 1% increase in employee engagement, you get nearly a 0.5% increase in customer satisfaction.
So, what does it look like to have an engaged workforce going forward? Engaged workforces really care about the direction of travel and the purpose of the organisation and they have clarity around objectives and shared goals.
Q. What does 2019 hold for the Institute of Customer Service?
A. Our role is to help the UK plc get better at delivering better customer experiences, and that is because there is a hard-nosed, economic value to doing that, i.e. it drives up better performances for those organisations. We want to help navigate organisations in an increasingly complex landscape, where customers are savvier. Our job is to help our members understand their customers and to be what we would term, ‘the critical friend’. We are not there to produce league tables for the sake of it, we are genuinely interested in helping these organisations get better, and that is by investing in their staff and through utilising the many benefits of the institute – that is our training, our insights, and our research. It is about driving that further, getting our message across and growing as an organisation – we are driven by our purpose and want to make a difference.
Our job is to help our members understand their customers and to be what we would term, ‘the critical friend’.
Jo Causon is the CEO of The Institute of Customer Service.
Jo brings a wealth of experience from the commercial sector, enabling her to put customer service at the heart of the Boardroom agenda. She has extensive experience in the financial services sector having recently been appointed as a non-executive director to Aegon UK’s independent governance committee and having previously spent more than eleven years working for organisations such as Aviva plc. She has also held director roles in brand and business consulting, policy development and research for City and Guilds and the Chartered Management Institute.
Jo focuses on demonstrating a clear link between employee engagement, customer service strategies and organisational performance. Working across the public, private and voluntary sectors she provides strategic advice to Boardrooms to raise the standards of service provided by UK organisations and to provide evidence of the connection between customer satisfaction and operational efficiency and profitability.
She has worked with politicians across all sides of the House focusing on the impact that service has on the UK economy and productivity. As a result she is a regular commentator on national media and has been called to give evidence at the Public Administration Select Committee inquiry into complaints handling.
Away from work, Jo is a keen walker and traveller. She has travelled extensively around Europe and wider continents, using her experiences to draw parallels on service strategy which she believes UK organisations should adopt and adapt to enhance customer satisfaction in an increasingly global marketplace.
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