digital sales why the future of digital sales will not4923c27b-2ecd-49c7... · digital interactions...

Digital Sales

Why the future of digital sales will not be the same we’re currently experiencingSwiss Re client event, Warsaw, 19 September 2018 Dr. Evangelos Avramakis, Swiss Re Institute

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Why could you choose soquickly?

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Performance

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Design

Performance

Mobility

Design

Performance

Mobility

Design

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* fake profile and benefits

Why is it sohard & difficult to choose?

8

Percentage of consumers who say these businesses’ products are easy to understand

45

0

40

35

30

25

20

15

10

5

Source: Hakim A et al. (1998) - Effects of walking on mortality among nonsmoking retired men. New England Journal of Medicine, 338(2), 94-99.

NPS score differences by ease of researching,

buying and servicing Auto/Home insurance

Onlineretailers

Local retailstores

National retailstores

Streaming TV / video /

music service

Mobile phone

providers

Credit card rewards / frequent

flyer programs

Banks Cable TV providers

InsuranceAuto or Home/Renter

InsuranceLife or

Annuity

0

40

30

20

10

-10

- 20

- 30

- 40

NPS Auto

NPS Home/Renter

NPSLife

Insurance as an industry might just be too complex for consumers!The Problem: Complexity

~400~120~110~70~50~15~4~3~2 ~400~120~110~70~50~15~4~3~2

The engagement gap in the Financial Services industryEstimated average number of customer contacts over 20 years1

9

Average interactions per year

>7'500

2'300-2'5002'100-2'300

1'400-1'600

800-1'000

LifeInsurance

Technology companies

Social media

Non-lifeInsurance

MotorInsurance

HealthInsurance

Retail Telco Banking

1 Adapted from: Berger-de Leon M. et all. (2016) McKinsey - Transforming life insurance with design thinking

30-50270-300

70-9060-70

The Problem: The engagement

Mobile interactions delight P&C customers in some countries, but they lag behind offline contacts in most of the world

10Source: Bain & Company (2017) Customer Behavior and Loyalty in Insurance: Global Edition 2017https://www.bain.com/insights/customer-behavior-loyalty-in-insurance-global-2017/

Note: Channel experience score is defined as share of delighted customers minus share of annoyed customers

The Problem: Mobile as an issue in Europe

For life insur. customers as well, mobile delights the most only in a few countries

11

Note: Channel experience score is defined as share of delighted customers minus share of annoyed customers

Source: Bain & Company (2017) Customer Behavior and Loyalty in Insurance: Global Edition 2017https://www.bain.com/insights/customer-behavior-loyalty-in-insurance-global-2017/

The Problem: Mobile as an issue in Europe

Omnichannel customers: higher NPS, higher penetration… …. and digital interactions matter!

Digital interactions are driving NPS and product penetration

12

Source: Bain & Company (2014) Customer Loyalty in Retail Banking – Global Edition 2014

2.4 2.6 3.03.2 3.2

Productpenetration*

# digital interactions

0%

10%

20%

30%

22

1011

27

31

Single-Channe

l

Digitalonly highmediu

mlow

Omnichannel

NPS Score traditional US banks2014, NPS score in percent

Branch Phone ATM Online Mobile

ᴓ Number of interactionsAverage number of interactions in last quarter, traditional bank respondents, in US, 2014

0

20

40

60

9

24

68

26

13

Branchonly


mlow

Omnichannel


digital

* average number of products owned NPS = Net Promotor Score

The Problem: (Digital) Omni Channel Management

Omnichannel customers: higher NPS, higher penetration… …. and digital interactions matter!

Digital interactions are driving NPS and product penetration

13

Source: Bain & Company (2014) Customer Loyalty in Retail Banking – Global Edition 2014

2.4 2.6 3.03.2 3.2

Productpenetration*


0%

10%

20%

30%

22

1011

27

31

Single-Channe

l


mlow

Omnichannel

NPS Score traditional US banks2014, NPS score in percent

Branch Phone ATM Online Mobile

ᴓ Number of interactionsAverage number of interactions in last quarter, traditional bank respondents, in US, 2014

0

20

40

60

9

24

68

26

13

Branchonly


mlow

Omnichannel


digital

* average number of products owned NPS = Net Promotor Score

The Problem: (Digital) Omni Channel Management

Level of (digital) engagement and complexity matters.

How to fix it?

Agenda

14

Digital Sales JourneyWhy insights on they customer journey matters?

1Digital Experience (CX)Why the customer experience is more than essential?

2Alternative ChannelsWhy to get prepared for alternative digital channels is important?

3

Customer experiences along the customer journey matters

15

Source: Rawson A. et al. (2013) Managing the Complete Customer Journey - Harvard Business Review

Customer Journeys: high correlation with revenue growth…

low high

RevenueGrowth

Customer Journey Satisfactionlow

high

… and with significant business outcomes

Willingnessto recommend

CustomerSatisfaction

Likelihoodto stay/renew

36%

28%

19%

Revenue growth – insurance industries2011 vs. 2010

The Evidence

Contact Center

Understanding customer journeys is key for key insight generation.How to get insights into non owned touchpoints?

16

Sources: adapted from: Swiss Re (2014) Sigma – Digitaler Vertrieb von Versicherungen, Helsana Marktforschung (Projekt Formutainment, 2013)

Owned Touch-Points Paid Touch-PointsEarned Touch-Points

Online (incl. mobile)

Agent / Broker

Friend

Contact Center(i.e. phone, chat)

Paper / E-Mail

Awareness Consideration Purchase

Online(i.e Reviews)

Paid Touchpoint(i.e. Google, Facebook, …)

Customer 1

Customer 2

Messaging Apps Becoming “Second Home Screen”

Consumer touchpoints are impacting existing and established relationships –behavioural insight generation becoming a key challenge

Facebook Inc.

Tencent Inc.

Others

17

980

800

568

361

330

200

178

95

FB Messenger

Facebook.

WeChat

Welbo

Twitter

Whatsapp

Instagram

Qzone

Pinterest

Snapchat

Vkontakte

2’072

1’300

1’200

Monthly Active Users, million

Source: Statista (26.01.2018) Social Media: Facebook Inc. Dominates the Social Media Landscapehttp://www.kpcb.com/internet-trends

18

Source: Pollitt C (24.04.2018) What Every Content Marketer Should Know About Artificial Intelligence, Socialmediatoday.com https://www.socialmediatoday.com/news/what-every-content-marketer-should-know-about-artificial-intelligence/521942

Visit onWebsite

Fingerprint

Tweet onProduct

Social Mapper

View add onInstagram

Social Mapper

User onLinkedIn

Social Mapper

Comments on Facebook

Fingerprint + SM

Facebook could collect 25% of an average user’s browsing history by linking website cookies with the Facebook account! Social Mapper to increase insights!

19

Facebook use webFacebook accountwidgets are embedded in various sites around the web, and will send the address of the page you are viewing along with your Facebook cookie, enabling Facebook to build a list of sites you have visited. Facebook’s widget reaches 25% of pages loaded by our users that Facebook could collect 25% of an average user’s browsing history.

Source: Cliqz.com (accessed 10.08.2018) How Facebook knows exactly what turns you onhttps://cliqz.com/magazine/techblog-woher-facebook-genau-weiss-was-dir-gefaellt-2

DigitalAnalytics

Customer Journey

20

Social Mapper is a Open Source Intelligence Tool that uses facial reco-gnition to correlate social media profiles across different sites on a large scale.

Sources: LinkedIn, Facebook, Twitter, GooglePlus, Instagram, Vkontakte, Weibo, Douban

Output: Organisations name, searchingvia LinkedIn, folder full of namedimages, CSV file with names andurl’s to images online

Source: GitHub (accessed: 13.08.2018) A Social Media Enumeration & Correlation Toolby Jacob Wilkin(Greenwolf)https://github.com/SpiderLabs/social_mapper

21Source: Bezamat B (3.07.2018) Adidas Originals speaks to influencers via personalized billboards, the current DAILYhttps://thecurrentdaily.com/2018/07/03/adidas-influencers-personalized/

24

Behavioral Biometrics measure of uniquely identifying and measurable digital patterns in human activities

Source: https://www.behaviosec.com/webinars/ (Accessed: 15.08.2018)

25

Source: Stacy Cowley (13.08.2018) Banks and Retailers Are Tracking How You Type, Swipe and Tap, New York Timeshttps://www.nytimes.com/2018/08/13/business/behavioral-biometrics-banks-security.html

Applications behavioral biometric & tracking

Banks and retailers are already tracking how you type, swipe and tap –

for fraud prevention purposes….

26

Source: adapted from iNotes4you.com, Lifewire (accessed: 16.06.2017) https://inotes4you.com/2015/01/31/iphone-6-barometer/https://www.lifewire.com/sensors-that-make-iphone-so-cool-2000370

Mobile phone as data insights provider – IoT in the pocket

Proximity Scanner

Ambient Light

Attitude

Fingerprint

TouchScreen

3D Facial Scanner

Gravity

Magnetometer

Moisture GPS

Motion/Acceleration

Gyroscope

3D-Facial recognition

10'000

15'000

190 /min

A variety of IoT and AI start-ups are developing solutions for the generation contextual and behavioural insights (i.e. contextualising customer journeys)

27

context360.com sentience.com theneura.com

A variety of IoT and AI start-ups are developing solutions for the generation contextual and behavioural insights (i.e. contextualising customer journeys)

28

context360.com sentience.com theneura.com

29GPS

Motion/Acceleration

Gyroscope

30

Cuvvacuvva.com

Carrotwww.carrotinsurance.com

Drivywww.drivy.co.uk

InsureAppinsureapp.com

32

Digital engagement is being dynamically generated

through customer insightson the spot and in real time!

Agenda

33




3

34

Source: DXA.co.uk (06.04.2018) Audi City: The biggest car dealership in the world – with the smallest footprint Audi City London https://d-x-a.co.uk/blog/audi-city-the-biggest-car-dealership-in-the-world-with-the-smallest-footprinhttps://www.audi.co.uk/locate-a-centre/search-centres/partner-uk/sytner-group/audi-city-london.html

Audi City – the success story in customer experience

35

Source: DXA.co.uk (06.04.2018) Audi City: The biggest car dealership in the world – with the smallest footprint Audi City London https://d-x-a.co.uk/blog/audi-city-the-biggest-car-dealership-in-the-world-with-the-smallest-footprinhttps://www.audi.co.uk/locate-a-centre/search-centres/partner-uk/sytner-group/audi-city-london.html

Audi City – the success story in customer experience

70% sales increase60% new customers

phytigal customer experience

36

South Coast Plaza mall, Costa Mesa, USAAudi City, London, UK

Bluewater Shopping Centre, Kent, UKTesla MBH Architects, LA, USA

Differentiation through experience is suggested to provide increased perceived value and leads to higher willingness to pay

37

Commodities ServicesGoods

Price

Source: adapted from: Pine BJ & Gilmore JH (1998). Welcome to the experience economy. Harvard business review, 76, 97-105.https://hbr.org/1998/07/welcome-to-the-experience-economy

Experiences

38

Integrating offline and online experience

39

“Eight weeks in Starbucks Shanghai Roastery (Reserve) is raking in insane sales”In one day Shanghai Roastery makes more than double what a traditional U.S. store makes in an average week.Image Sources: CNN Travel (05.12.2017) - Shanghai's Reserve Roastery: What's it like in world's biggest Starbucks? Shanghai's Reserve Roastery: Inside the world's biggest StarbucksSource: Whitten S (25.01.2018) Eight weeks in, Starbucks Shanghai Roastery is raking in insane sales, CNBC

https://edition.cnn.com/travel/article/worlds-biggest-starbucks-shanghai/index.html?gallery=9

Source: (26.09.2017) Lloyds Bank Manchester: Helping Britain Prosper, mworldwide.co.uk https://mworldwide.co.uk/retail-design/lloyds-bank-manchester-helping-britain-prosper/

Lloyds approach to in store experience”Lloyds Bank has thought of everything that a bank can offer to give customers a great experience every day”.

40

41

Skipton, UKScotiabank, Canada

Arion Bank, ScandinaviaNationwide, UK

42

Skipton, UKScotiabank, Canada

Arion Bank, ScandinaviaNationwide, UK

Just copyingan experience is

not differentiating

43

Fluid and smart interfaces

Source: Ramotion (2016) Car Control - App Interface: in User Interface Design on Jan 28, 2016https://dribbble.com/shots/2487806-Car-Control-App-Interface

44

User experience combined with external data integration and analytics improving the overall customer experience during the sales process

Source:http://blog.formkeep.com/wp-content/uploads/2016/03/Natural-Language-Form.gif

Source:https://blog.mailerlite.com/wp-content/uploads/2016/11/Be-conversational2.gif

Fill-in forms are made very typer-user friendly… … and here possible supported by best in class usability

45

Source: Realotyeditor.org (2017) A Web-Based Tool for Controlling the Physical World (accessed: 12 June 2017)http://realityeditor.org/

Interactions beingdynamicallygeneratedthrough AI

AR KIT

46

48

Need to

borrow

a car?

51

Soources: https://www.minalea.com/http://www.digitalinsuranceagenda.com/183/minalea-the-first-robo-advisor-for-insurance-sales/

Smart Sales Assistant scans in depth the products’ content and services from the market and generates the perfect sales pitch. The Sales Assistant integrates a powerful search engine, which allows to respond instantly to a question from a customer about his current offer or the one you offer him.

52

Global InsurerSwitzerland (09.04.2018)

[ins.]

Global InsurerUK (09.04.2018)

[insurance]

Global InsurerItaly (09.04.2018)

[ins.]

Global InsurerGermany (09.04.2018)

Guides – First Time UserConfused.com (09.04.2018)

Price TransparencyRevolut (09.04.2018)

Price BreakdownAviva (09.04.2018)

Price ChangesCo Opinsurance 09.04.2018)

53

NPS

70Renewal rate

97%

Source: Lemonade Blog (20.06.2018) We suck, sometimesttps://stories.lemonade.com/lemonade-transparency-review-blog-eced69282ac8

the original the copy

54

55

”I feel like I’m a complete stranger to him”Through camera function, children can learn to read a person’s mood, remember faces and take photos of themselves Source: Samsung (23.12.2014) Look At Me App to Help Children with Autismhttp://www.samsung.com/latin_en/news/local/look-at-me-app/

emotional connection

56

”I feel like I’m a complete stranger to him”Through camera function, children can learn to read a person’s mood, remember faces and take photos of themselves Source: Samsung (23.12.2014) Look At Me App to Help Children with Autismhttp://www.samsung.com/latin_en/news/local/look-at-me-app/

emotional connection

Managing digital customer experiences

becoming a key competitive weapon!

Agenda

57




3

58

Do you intend

to keep your

customer

interactions?

Do you assume

to loose full

control but

stay relevant?

59

Increasing the “End Consumer Knowledge” requires great insights into custo-mer’s goals, allowing to seamlessly interact with a variety of touch points

Omnichannel Business

Supplier

Value Chain

Knowledge of End Consumer

Complete

Partial

Business Design: the extent to which they want to control the value chain, or drive or be part of an ecosystem that delivers on the end customer’s total needs

End Consumer Know-ledge: the extent to which they know about their end customer’s goals

Source: adapted from: Woerner SL (2015) Thriving in an Increasingly Digital Ecosystem, MIT Sloan Management Review, summer 2015http://ilp.mit.edu/media/news_articles/smr/2015/56417.pdf

Business DesignEcosystem

Ideology – Omni Channel

@

Reality – rather a heterogenous and complex distribution structure

@

Aggregator 3rd Party Tight Agent Call Agent Chat Online (e)Mail

SalesChannels

Consumer

Value addto the customer

60

Omnichannel approach requires a sophisticated touchpoint management that is simultaneously generating new insights by providing more value to the customer

Omnichannel Business

Supplier Modular Producer

Ecosystem Driver

61

Moving towards ecosystems, reduces the control of the overall value chain -however, value is being “customized” to the ecosystem’s customer needs

Value Chain

Knowledge of End Consumer

Complete

Partial

Source: adapted from: Weill P, Woerner SL (2015) Thriving in an Increasingly Digital Ecosystem, MIT Sloan Management Review, summer 2015http://ilp.mit.edu/media/news_articles/smr/2015/56417.pdf

II

I

Business DesignEcosystem

Business Design: the extent to which they want to control the value chain, or drive or be part of an ecosystem that delivers on the end customer’s total needs

End Consumer Know-ledge: the extent to which they know about their end customer’s goals

62

Smart car – insightful premiumsInsurance already insideTesla is planning to offer custom insurance plansBusiness Insider (02.09.2016) - Tesla is planning to offer custom insurance planshttp://uk.businessinsider.com/tesla-is-planning-to-offer-custom-insurance-plans-2016-9

Off-the-shelf Insurance

63

Smart toothbrush – smart premiumsInsurance already inside – save 10-25%This ‘Smart’ Toothbrush Could Save You Money On Dental InsuranceHuffingtonpost (02.09.2015) This ‘Smart’ Toothbrush Could Save You Money On Dental Insurance. But At What Risk?http://www.huffingtonpost.com/entry/smart-gadgets-insurance_us_55e5c6ffe4b0c818f6192558http://beam.dental

64

Airbnb's Host GuaranteeFree property damage protection of up to $1 million USD for every

listing

Experience Protection InsuranceFree liability insurance of up to

$1 million USD for most experiences

65

Accounts

Current accountIBAN Euro account*

Interbank FX rates*

Premium account*

Products

Money Transfers

Vaults

Budgeting

Personal Loans

Cryptocurrency

Currency converter

Mobile Phone Insurance*

Travel Insurance*

Global Medical Insurance*

* Premium membership

0£/month

• Free UK current account

• Free Euro IBAN account

• Interbank FX rates

• Free bank transfers in 25 currencies

• £200/€200 Free ATM withdrawals per month

Source: Company Website (27.06.2018)

How do consumers rate the customer experience? Experience is what challengers are selling – and they deliver on their promise!

Customer Service Experience

Challenger BanksCustomer Service Experience

CX Traditional Banks

22%

1poor

33%

2 3 4 5 awsome

11%

26%

8%

0%

5 awsome

21poor

3 4

4%

11%

37%

48%

66Source: Burnmark (2017) Challenger Banking: Is consolidation the only way forward?

67

Accessing new platforms through APIs:i.e. Introducing the Lemonade API

Commerce Real Estate Marketplaces

Financial Service

Smart Home Security

Insurance As asService (IaaS)

Everything Else

Adapted from: Lemonade.com (28.05.2018) https://www.lemonade.com/api

68

Pure Parametric Risk Solutions«digital product»Source: App in the air (accessed 30 November 2017)https://www.appintheair.mobi/

DirectPaper

DirectOnline

ContactCentre

TiedAgents

Brokers

69

Variety of channel integration set-ups: Full digital offerings require a so called APIs (Application Programming Interfaces)

Interface

Consumer

Supplier(i.e. Insurance)

Distributor Access

digital non-digital

Classical Incumbent Setup

Product Product Product Product Product

DirectOnline

DirectOnline

API API

Alternative Digital Setups

ProductProduct

digital digital

own factoryforeign supplier

70

New competition arriving – this time from outside!

Aggregators Start-Ups“Challengers”

Intermediaries

Banks / Insurers

TechPlayers

Established market players New entrants

customers

71

Source: Oliver Ralph (07.08.2018) Identity crisis: the insurers moving away from insurance, Financial Timeshttps://www.ft.com/content/2916c128-918d-11e8-b639-7680cedcc421

“The market is huge, and not just in China,” ... “It is a very scalable business. If we don’t act, we’ll just become a utility.”

Jessica Tan, Ping An’s deputy chief executive

Summary

72

1

Digital engagement is being dynamically generated through customer insights on the spot and in real time!


2

Managing digital custo-mer experiences beco-ming a key competitive weapon!

Digital Experience (CX)Why the customer experience is more than essential?

3

Digital touchpoints might change over time – get prepared for the next digital disruption in insurance

Alternative ChannelsWhy to get prepared for alternative digital channels is important?

Digital sales: Reduce complexity – simplify products and processes – for all channels!

73

Customer Effort – Reducing customer effort pays off

2x

Complexity = Channel Switch - Complexity costs*

Source: Simplicityindex (2017) Omni Channel Customer Care, simplicityindex.comDixon M et al. (2010) Stop trying to delight your customers. Harvard Business Review, 88(7/8), 116-122

The Customer Effort Score (CES) outperforms the Net Pro-motor Score (NPS) and Customer Satisfaction (CSAT) in predicting behavior

Predictive powerfor repurchasing

Predictive power forincreased spending

NPS

CSAT

CES

Summary

In complex industries customer tend to use twice as much the telephone to receive more information about a product or service

If complex then switch

74

Digital sales: Get much digitally closer to the customer and provide value by seamlessly protect privacy

datacollection

better userexperience

better products &

services

gaining / sustainingrelation-

ships

valueinsights

behaviouralinsights

relationship

insights

Virtuous data driven relationship

loops

Generating data driven virtuous loops

trust & transparency balance

collection of customer

data

perceivedconsumer

values

Trade-Offdata vs. value

Balancing data collection vs. perceived values & trust

consumerserviceprovider

Summary

trust &

organicgrowth

75

Digital sales: The overall extension of the value chain of many market players will force you to get digitally closer to the consumer

ConsumerJourney

Aggregators

LeadGenerators

Online Brokers

Brokers

Existing Insurers

New Insurers

AwarenessGenerators

Consideration Evaluation PurchaseAwareness

core focus

Dis

trib

uti

on

Pla

yers

non core business(value expansion area)

…

new battle(more of the new cake)

new game(more of the piece)

customer loyalty(more of the customer lifetime value [CLV])

cost cutting

Summary

Thank you

76

Dr. Evangelos AvramakisHead Digital Ecosystems R&DSwiss Re Management LtdMythenquai 50/608022 ZURICH, SWITZERLANDDirect +41 43 285 49 73 E-mail: [email protected]

ch.linkedin.com/in/avramakis

xing.com/profile/evangelos_avramakis

flipboard.com/@eavramakis

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