6 Challenges to Digital Customer Experience Transformation

The age of digital communications and social media have increased the expectations around customer service and the ability to get results quickly. Unfortunately, in the move to becoming a digital organization, some firms have difficulty replicating the 1:1 service customers once enjoyed.

By Jim Marous, Co-Publisher of The Financial Brand and Publisher of the Digital Banking Report

Any company that provides a service to consumers is often judged more harshly when things go wrong as opposed to when everything is running smoothly. For example, I have been a client of State Farm Insurance for more than 20 years. During that period, I have had only minor claims, and for the most part, the firm has lived up to their motto, “Like a Good Neighbor, State Farm is There.”

Unfortunately, all of this changed a bit more than a week ago, when I had an auto accident that required some basic repairs (no body work). My experience since the accident provides an excellent lesson to any organization trying to build digital customer care capabilities.

The challenges encountered over the past 10 days include:

1. Living up to a customer-centric legacy
2. Broken promises and missed commitments
3. Outdated silo structure
4. Hidden paper-based systems
5. Underdeveloped social channel strategy
6. Ill-timed retargeting

1. Living up to a 1:1 Customer-Centric Legacy

State Farm has a legacy of being a leader in customer service. They are consistently near the top of many consumer rankings and have a strong agent network, where humans historically have had a hands-on ability to serve. Like many financial services companies, the internal and external move to digital channels may have changed many of these dynamics.

According to the 2015 Temkin Experience Ratings, an annual customer experience ranking of companies based on a survey of 10,000 U.S. consumers, USAA and State Farm deliver the best customer experience in the insurance industry. USAA has been the top-rated insurer for five years in a row, earning a 75% rating (52nd out of 293 companies across 20 industries). State Farm has been in second place for four years running, earning a 71% rating and placing 100th overall.

In these ratings, a score of 70% or above is considered “good”, and a score of 80% or above is considered “excellent”. With the insurance industry averaging an unimpressive 66% rating in the 2015 Temkin Experience Ratings, and being one of the 14 industries whose ratings declined in the past year, maybe State Farm’s rating is an example of being ‘the best of the worst’ compared to other industries.

Or maybe the Temkin evaluation isn’t done with people who have had a recent claims experience. Up until my accident, I would have given State Farm a very good rating as well. Looking deeper into other people’s experiences, I found that many others have had issues with claims.

On the Consumer Affairs website, there were more than 1,000 relatively recent complaints registered against State Farm, the majority having to do with the poor service during the claims process. Many were similar to my situation, where the claims process was slow and it was almost impossible to get in touch with anyone with answers.

Lesson: Before the ‘digital revolution’, most customers were used to 1:1 interaction and being able to connect with a single person for a response to their question(s). As industries moves to digital, it becomes imperative that the customer experience doesn’t suffer. Moving to digital should actually improve the customer service experience, with more contextual data, improved customer insight and enhanced analytic capabilities.

For State Farm, all of the power has left the local agent. That can’t see client records and all of the insight is in the hands of other departments, with the objective of standardized (and hopefully better) service. When the system works, all is good. When a situation like mine occurs, the normal contact point for the customer is left powerless.

According to Dimensional Research, among internet users who said they had had a positive customer service experience, more said it was because they received a quick resolution to their problem, rather than a desirable outcome. In addition, the customers who had a poor experience most often cited talking to several people to achieve a resolution as the cause of their unhappiness. But about two-thirds of respondents said that they either had to speak to someone who was unpleasant, or that their problem took too long to fix. A local agent would not let this type of situation to occur.

2. Broken Promises and Missed Commitments

The ‘death blow’ to a customer service experience is when promises are made and then missed. In my experience, I called into a centralized claims hotline immediately after my incident and agreed to provide responses to a long series of detailed questions. While some of the questions seemed redundant and others covered information that should have already been on file, this was not a problem since the service agent set expectations up front about the Q&A process.

After the information was completed, the agent let me know that, since it was a holiday weekend, the adjuster may take 2-3 days to do an estimate. This set an expectation that would soon be the foundation for frustration.

Not only did State Farm not start the estimate process within the three days promised, they still had not seen my car 11 days (7 business days) later. Adding insult to injury, during a subsequent phone call to the central customer service line and my agent, both said, “the first person was wrong to commit to 2-3 days and our policy is 2-5 days” … on day 6!

There was a missed opportunity on Day 12 (8 business days after the incident). The adjustor finally saw my car and proceeded to provide me a very generous offer for repairs. Unfortunately, I heard this first from the repair shop and was not contacted first by State Farm.

Lesson: Schedules and tickler files are a great example of where a digital customer care database can be invaluable. Not only can such a database monitor commitments made, but it can also provide a reminder to internal parties who may need to help live up to commitments made by others. In addition, a customer service database can help with proactive communications to customers when schedules get derailed (or when processes move forward). During my entire process, there was not a single proactive email, call or alert regarding the status of my claim.

Again, with proactive alerts and notifications, inbound phone calls are eliminated, the customer feels in control and informed and there are resultant cost savings.

3. Outdated Silo Structure

Organizational silos are part of virtually every legacy financial services organization. A truly digital bank (or insurance agency or investment firm) eliminates the organizational friction of silos, providing a flatter organization where all customer insight is shared.

At State Farm, it quickly became clear that my personal agent had no informational advantage over what I could find out on my own. They had to call the same number, get the same response and fight the same battles as I had to. In my situation, it became very apparent that the central customer care organization, claims/adjuster organization and agent network were at least three separate entities without shared databases.

Lesson: One of the foundational components of a truly digital organization a shared 360 degree view of the customer. Each potential customer touchpoint should be able to easily monitor the customer relationship as well as any communication stream from a central database. The result of a siloed organization is frustration when the insight about the customer resides further from the ‘owner’ of the relationship. With State Farm, this seemed to be a case where operational efficiency trumped customer experience.

The customer is still used to calling their banker, agent and/or investment advisor for information about their relationship. Taking insight away from these points of contact can be disastrous if not supplemented with a robust system of proactive alerts and notifications through email, robocalls, SMS, etc.

For the other three challenges, including terrible social media tracking ... read the rest of the article here.