Insurers should have confidence in their supply chain partners to help their business deliver a better customer experience. However, James Roberts, business development director, insurance at Europcar UK, argues many take a short term view believing the cost of change is too high to ditch under performing service providers.
According to the Institute of Customer Service, on average organisations that maintain a customer satisfaction score above their sector average, achieve 9.1% revenue growth year-on-year. The challenge is achieving consistently high customer satisfaction, while keeping costs down, so that revenue growth turns into profit.
Undoubtedly, everything from core processes to resources used to deliver services is regularly examined by insurers to identify opportunities for improvement – both improvement in cost management and improvement in the customer experience. And that’s as good a reason as any to examine the services delivered by existing suppliers.
Insurers should have confidence in their partners to play a fundamental role in helping their business work better within their organisation and, therefore, deliver a better customer experience. Each part of the supply chain should be able to bring new processes and technologies – and that means insurers should be able to enhance the customer experience without having to make significant internal investment or process changes. And supply chain partners with a good understanding of the insurer’s brand values can enhance the customer experience simply by doing their job.
The cost of change is often cited as a key reason for staying with existing service providers. Will switching to a new provider require investment in new technology and systems? Will staff need to be trained on new ways of working? And, most importantly, could a switch to a new supplier risk the customer experience? Will the end-customer feel that the service they receive has changed which might influence how they feel about the brand in the long term?
The reality is that these very barriers could actually be the way to deliver new benefits to a business. New processes can actually refresh the customer experience which, in turn, can enhance brand retention. And, of course, any business seeking to win new business will look for ways to make the transition as smooth as possible.
So, in making the decision to review one service provider – or a whole supply chain – what should be the determining factors? Some of the key factors that could be examined in reviewing an existing supply chain underpinning the insurance claims experience could include:
- Making the customer experience smoother through technology – just as consumers are now used to digital paperwork for many parts of their daily life, is that the case for replacement vehicle paperwork? The handover process needs to be seamless – for the customer and the insurer.
- Transparent management information – does the service provider deliver the insight into the service provided to the insurer’s customers in a timely and meaningful way which, in turn, helps the insurer and the supplier constantly fine-tune the service offered?
- Challenging the status quo – does the service provider continually look to reinvent the processes it supports for the benefit of the customer? For example, when a claimant is at the side of the road after an accident, is there an option to take them home in comfort rather than expecting them to climb into the recovery vehicle cab?
- Cutting down delays – can the supplier help the insurer cut down delays for their policyholder, as well as reducing the administrative burden of managing a variety of service providers for vehicle repairs?
- No upselling – the price paid by the insurer should not be subsidised by upselling to the policyholder
Of course, putting a supply chain to the test isn’t always about change. It could simply re-energise a relationship to deliver a better service for an insurer’s customers. But it’s important to remember that the cost of change is often less than the cost of staying with an underperforming supplier who retains their role simply because it feels too difficult to change.