Customers Are Taking Control Of Financial Services
By Troy Korsgaden
Gone are the days of carriers leading the entire purchasing cycle of insurance products and financial services. In today’s environment, it’s the customer who is in control.
To remain competitive, advisors must become the local gateway to every potential option. This is a positive change for our industry. Instead of running our businesses in a way that focuses on our needs, we are shifting our focus to customers. And that’s the way it should be.
Traditionally, customers buying insurance products and financial services have had little or no voice in the purchasing cycle. Up until now, this approach has enabled carriers to retain business, despite the plethora of offerings in the marketplace. Some well-established and well-run agencies have offered differentiators, but nothing radical enough to flip the industry upside down.
These agencies have enjoyed increased business as they’ve added a few other lines of insurance, but their dream of representing all products and services in their clients’ households has not materialized. The pricing might be great in one area, but not in another.
Price seems to have been the only real driver, other than local or high-touch service. It was never enough to win the day — to have customers purchase every one of their products for property and casualty, life insurance, financial services, etc., under one roof.
The industry’s goal was to become a one-stop shop using local distributors. Many of the best agents blamed their distribution for this unfulfilled dream, but they never took an inward look at what they were providing customers holistically. Today’s marketplace is changing rapidly. We are experiencing a tsunami of change.
Agents are committed to giving great customer service and offering quality products at reasonable prices. Consumers are brand-loyal on certain products, but they never seem to be brand-loyal without some type of consideration of pricing, delivery of additional products and other factors. To win customers’ loyalty in this new environment, we must evolve by offering more options and easier access to them.
Amazon Will Never Be The Local Gateway To All Insurance
Enter the new age of the customer. Customers are demanding more today than ever before. This expectation first affected retail and other consumer services.
It’s easy for everyone to point to Amazon as the gold standard in responding to such demand. Amazon certainly excels in customer service and in providing the many products it carries. Now the online behemoth is attempting to enter the financial services sector, offering consumers loans, insurance and checking accounts.
But these efforts are aimed mainly at increasing participation in the Amazon ecosystem, not replacing the agency system. Amazon will never be the gold standard when it comes to being a local provider who offers customized personal service as well as every possible insurance and financial product that households and businesses need.
How To Provide Optimum Service Amid The Tsunami Of Change
- Have a 360-degree view of the consumer. The winners and long-term players will have a true 360-degree view of the customer. This will involve some type of local representation or position for the advisor who delivers these products and services. Why? Because big data will improve, while artificial intelligence will make data more usable and enable that data to be delivered to the marketplace more quickly.
The advisor who serves their local community and interacts with their customers regularly will always know more than the computer will. The computer can’t tell you when someone is possibly going through a divorce, when there has been an illness or when a huge life change is imminent, such as a marriage or the arrival of a baby.
Local representation always will be superior to a computer or a 1-800 number. People will always buy from those they know and trust. People will always want someone to hold their hand through the maze of madness. This is the superior value you bring to the table.
Today’s consumer needs an advisor who can handle everything. That means being a discussion partner — a knowledgeable, caring provider who has access to information that can be gathered, as well as the ability to look holistically at the consumer’s needs from a 360-degree view and provide products based on product suitability, reasonable pricing and the best coverage contracts available.
- Constantly add new features to your customer service platform. Carriers are in an arms race to get their technology in place to communicate from product to product and to provide delivery systems that make clients feel secure and enjoy smooth, easy business transactions.
Google describes this as “a single pane of glass,” a complete 360-degree view of clients. We must always abide by the privacy laws in each specific state and marketplace, protect our clients’ data and deliver a seamless consultative product suite.
Technology is evolving so fast that we can’t possibly keep up by buying new platforms and computer systems all the time. Instead, bolting new technology features onto our existing systems at a rapid pace will win the day. I have not seen one particular technology that ties it all together at this point.
The arms race for technology will eventually lead to one integrated system that carriers, clients and agents all can use to ensure they are singing off the same page in the songbook at all times.
For now, we can add features as they become available, such as lead management, analytics or a claims tool, for example. The goal is to equip your existing system with all the features that will benefit your clients and the team members in your agency. Ask yourself, “What are the capabilities we don’t have?” and then add them to your system.
- Improve all distribution systems, including local distribution. There are many small businesses representing agents and products in the financial services marketplace. Customer loyalty means being loyal to your customer, not being loyal to yourself. You can provide unrivaled service by upgrading and retooling your distribution system at the service level.
- Partner with other specialists to expand your offerings. Whether your agents are employees, brokers or managers of firms that have special agreements with others, nirvana is offering all products and advice engaging specialist advisors in joint work. I don’t mean that we should refer clients over to other experts and then disengage. Instead, we should refer our clients to another specialist and be a part of the conversation.
For example, let’s say an agent doesn’t offer a second-to-die policy, but has a relationship with someone who does, so they provide that product and service to the client through that other expert. They might not get a commission on that referral, but because they were in the conversation from start to finish, the client will see the agent as the gateway to all insurance products and financial services.
Today, clients have a more transparent view into what they are buying. Agents who expand their offerings by partnering with other specialists win because they have more opportunity to sell additional products and services. Although we might not be competitive today, our distribution has the ability to place business when it is in the client’s best interest, and the carrier can provide the coverage and reasonable pricing.
Because the customer is in control now, it’s important to put your customers at the center of every decision you make as an agent, whether it’s about the products you offer, your pricing or your overall advice. Get out in front of this reality, and don’t fight it.
Robo-advisors, digital platforms and lower-cost delivery options will have a place in the industry and will gain market share, but the real money is in providing it all through one gateway. That gateway is the true omnichannel experience. We can become that gateway by optimizing our offerings and tailoring them to our customers’ needs.
Troy Korsgaden is president of Korsgaden International in Visalia, Calif., and the author of six books on the insurance industry. Troy may be contacted at troy.korsgaden@innfeedback.com.
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