Whether insurers today compete in a business-to-business or business-to-consumer market, they must continuously improve the customer experience to win and retain business. But how can they measure success of these efforts?
DOWNLOAD THE FULL ARTICLE [PDF]
Health insurers have traditionally focused on financial and operational metrics when measuring enterprise performance, especially at the most senior levels of the organizations. Yet as customer experience efforts become more of an enterprise priority, customer perception metrics are critical. There are four metrics to consider when measuring customer perception: customer satisfaction, likelihood to stay/purchase again, ease of doing business, and willingness to recommend measured as a Net Promoter Score (NPS)®.1 There are also new metrics, such as emotion or even customized perception measures.
Some health insurers are starting to use NPS as an overall measure of customer experience success. It is easy to measure and understand, comparable across industries, and correlated with growth. Accenture analysis of these four customer metrics shows a positive correlation between NPS for health insurers and the other three metrics.
1 Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
Net Promoter Score (NPS) is a commonly used customer metric. It is based on the premise that consumers’ willingness to recommend an organization indicates future consumer behaviors that drive future revenue growth and value for the organization. To calculate NPS, organizations subtract the percentage of detractors (consumers who are least likely to make positive referrals) from the percentage of promoters (consumers who are most likely to make positive referrals).
Competitive consumer industries have used NPS to measure the customer experience and loyalty for years. While market dynamics are driving new interest in NPS for health insurers, their current NPS ratings are among the lowest of all industries.
Five-year NPS trend data shows health plans in the bottom quartile, ranking either 17 or 18 out of 20 industries.2 Only utilities and internet and television service providers—both notorious for bad customer experiences—rank this consistently low. Consumers are less apt to advocate for their health plans than for airlines, fast food companies, banks and credit card companies among other surprises. This presents insurers who take a leadership position a tremendous opportunity to differentiate and grow.
In fact, Accenture analysis of eight commercial and nonprofit health plans from 2012 through 2015 reveals that positive changes in NPS often correspond to positive changes in member enrollment. This suggests that those who prioritize the experience and improve NPS scores will be positioned for future revenue growth.
Understanding the next generation of health consumers—millennials and digital-savvy consumers—is key for insurers to improve NPS ratings and harness new growth potential. Not only will there be more of these customers, but Accenture analysis reveals that both groups have more detractors than promoters. Case in point: Millennials give insurers an average NPS score of -18, compared to +11 from baby boomers. 3 The average NPS from digital-savvy consumers is -24 for insurers, compared to -1 from traditional consumers.4These low ratings are at risk of dropping even further if health insurers cannot evolve to meet these customers’ needs and expectations. Higher churn rates among both customer segments suggest that neither group is afraid to leave their health insurer if their experience expectations are unmet. 5
These groups also exhibit behaviors that will make the detractors among them more powerful by amplifying their discontent. As frequent users of social media, millennials and digital-savvy consumers share their voices and trust others’ voices. If these groups’ needs go unmet, the vital—and viral—role of social media in their lives is a threat to future NPS ratings.
5Accenture 2015 Health Consumer Survey
Whether it is NPS for health insurers or another customer measure, it is important for insurers to set their North Star and go beyond measurement by establishing a customer experience management capability by:
LEADING THE EFFORT FROM THE TOP
The transformation starts with senior leaders setting clear goals along with complementary communications and action plans so that the organization reorients around the new measure, and is positioned to act on it.
ACTING ON CONTEXT, NOT A NUMBER
Insurers need an experience management capability with advanced analytics to capture, analyze and act on customer feedback to deliver on and predict the expectations of both detractors and promoters.
ENABLING AND LISTENING TO THE FRONT LINES
Customer experience leaders use systems for gathering and distributing customer feedback across the organization, so that employees can immediately act on feedback.
DESIGNING EXPERIENCES THAT DELIGHT
Improving, protecting and leapfrogging NPS ratings into the future means designing and delivering experiences in different ways. The Love Index takes a design-led and scientific approach to measuring customer experience across both digital and physical touchpoints.