Established companies that want to have more than just a transactional relationship with their customers understand the importance of building trust and ensuring that the digital channels and investments they’ve made really allow them to do so. Digital is great for straightforward customer transactions, such as ordering, buying, sharing and interacting. But there are other categories of “customer needs” that involve far more complex decision-making and potentially different actions, and such channels may not always be the most appropriate or cater for customers in the way that they need them to. These situations are more “confidence-based” and require a different type of digital interaction in order to deliver the right experiences that customers want and need.
The Insurance, Banking and Healthcare industries are well aware of the need to build confidence with customers, as opposed to repeating transactions. After all, making it easier for customers to buy has little impact when the confidence to buy is critical. Leaders in these industries often point out that their products are “sold rather than bought.” This is because retail and consumer digital models are red herrings, often dilutive and costly.
The major competitor in confidence-based industries is not another company—it’s customer inaction. Although technologically mature, digital solutions are incomplete in these industries. For instance, look at insurance mobile apps, healthcare plan websites or retirement portals, and you will see a transactional-based metaphor rather than a confidence-based one.
That’s understandable. Actions are complex with considerable lag time between purchase and value. “Investing money today for retirement decades in the future” is one example, as is "adopting healthy practices and discipline now to pay off in the future." Protecting oneself against risk today when one may never realize a claim is a tough sell due to its intangibility. Occasionally doing nothing can make sense to a consumer in the face of that complexity.
Trust + Confidence = Action
A confidence-based business needs to use technology in a different way. The digital channel is not about better or faster transactions. It’s about building confidence and trust in a way that leads to action. Consider three techniques for using technology to build confidence and trust:
Simplification: The consumer is considering a complex product with an uncertain payoff and a perceived large upfront investment. Simplifying the value proposition increases understanding and confidence.
Automation: Automation creates confidence when it removes arbitrary steps in a process. When results are predictable, consumers know that what they have now they can expect in the future.
Peer-based personalization: Knowing where I stand relative to peers and knowing what others have done in similar situations builds confidence that I am not alone. Peer-based personalization does not have to violate privacy policies, particularly when you are transparent about creating the peer comparison data.
Confidence in a digital world
Too many digital experiences have not stepped up to the confidence challenge despite the observation that digital technologies are fundamentally human and well suited to this task. Instead, digital experiences are too often “consumerized,” assuming that a purchase is a purchase—creating more churn than customer value.
An insight to bear in mind: Every industry is a digital industry, but digital in its own way.
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