Once upon a time, insurers sat in the power seat when it came to their interactions with policyholders. The insurers understood the magic behind how insurance was sold, how premiums were calculated, and how claims were adjudicated. Those days are gone. In the Age Of The Customer, consumers are changing the rules and who wield the power. Thanks to all things digital, consumers have shifted from being passive sideliners and are willing — and able — to play more active and demanding roles across the insurance business. That means that digital must now be a core underpinning of an insurer’s customer experience philosophy, not an endpoint.
Just what are the factors propelling North American insurer agendas this year? For starters, it’s about:
Booming growth in revenues and profits. 2013 was a very good year for most North American insurers --the best since the financial crisis. Many are sitting on hefty policyholder surpluses and capital.
The fallout from HealthCare.gov. Balancing political winds with project management reality heaped more pressure on already stressed health plans, thanks to shifting deadlines, relaxed employer mandates, and zombie health plans. And as a result, trust across the broad healthcare ecosystem was undermined.
The risk of emerging insurers to meet the needs of digitally empowered consumers. Consumers are getting being trained to expect even more from their digital interactions. New insurers are coming to market offering new digital experiences that simplify, personalize, empower, and reassure customers.
Extreme weather. US and Canadian insurers have shifted to a posture of adaptation, and are looking to arm policyholders with new tools to better protect them from natural hazard risks.
At the beginning of the year in our yearly mobile predictions report, my colleague Julie Ask and I made the following call: "mobile will affect more than just your digital operations — it will transform your entire business. 2014 will be the year that companies increase investments to transform their businesses with mobile as a focal point." McDonald’s France is a great example of such a trend.
In France, you can now order a Big Mac anytime, anywhere on your smartphone, tablet, or desktop and pick it up later at any of 1,200 McDonald’s restaurants. But mobile ordering and in-store pick up are just the first steps of a broader and more ambitious strategy: differentiating McDonald’s brand experience and powering a future relationship marketing platform by enabling direct behavioral customer insights. Although it started with a mobile ordering and payment app nationwide, McDonald’s France aims to transform all points of customer engagement by building a platform to extend new services to loyal customers and evolving the entire organization.
Despite a less mature mobile ecosystem and lower mobile usage than in the US, McDonald’s France was the first subsidiary of McDonald’s to launch a mobile ordering offering at scale. Such an ordering service is only at pilot stage in the US. France is McDonald’s second-biggest market after the United States, with €4.35 billion in turnover in 2012. Most other countries had piloted mobile payments so far. With more than 16 million members, McDonald’s Japan mobile couponing and in-store contactless payment services is the only other mobile service for McDonald’s (and the vast majority of brands) that has scaled massively, but it does not yet offer the same value.
Back in July 2012, I authored a post about Pitney Bowes and the company’s focus on reinventing itself. At that time, the company had a great portfolio of software assets and a good overall market message — but its market approach was fragmented, its solutions were not integrated, and it was a difficult company to figure out from the perspective of a customer or prospect. About 15 months ago, Pitney Bowes appointed Marc Lautenbach as its new CEO to address these issues.
Fast forward to today. Last week I had the opportunity to spend some time with Marc while he was in Sydney. In his brief time with the company, he has sorted out a number of the challenges I was referring to — including giving the firm a laser-sharp focus on a few key areas, bringing traditional assets into the digital world, refining its sales model, and leveraging those areas in which it has competitive advantage.
Marc sees PB’s main opportunities in the following areas:
eCommerce. PB has the ability to classify assets for all types of commerce providers and ship them anywhere around the globe.
Location-based solutions. Not only does PB have great mapping information, but it can also integrate data from any domain and apply its own algorithms to make that data valuable.
Printers, sorters, meters, and inserters. This isn’t a fast-growing business, but it’s a big one — and one that’s still important to many companies. It’s also a segment in which PB has some unique capabilities.
2013 was a year in which media attention and hype targeted 3D printing: “artisanal” do-it-yourself (DIY) upstarts on Kickstarter making headlines across the blogosphere every week; high-profile speculation, such as President Obama’s quip that 3D printing will create a new manufacturing economy in the US; and Victoria's Secret models strutting down the runway in elaborate 3D printed corsets and signature wing accessories.
The excitement has reached the C-suite, where execs are wondering how this elusive and unfamiliar new technology will affect their business. As the resident techie, the CIO should expect the questions to come her way: What are the business implications? How fast is the technology developing? What are the implications for business technology at your organization?
Here are three angles on how 3D printing is driving business impact and digital disruption:
1. 3D printing can create tremendous business value — today. 3D printing enables key business imperatives in the age of the customer: faster time to market, new products and new markets, and the expansion of personalized products or services.
Organizations in Asia Pacific (AP) have become cognizant of the fact that they have entered the age of the customer — an era in which they must systematically understand and serve increasingly powerful customers. In the past two years, most AP firms have primarily focused on using mobile apps to connect their organizations with internal employees. However, in the age of the customer, this trend will reverse. Results from Forrester’s Forrsights Budgets and Priorities Survey, Q4 2013 show that 44% of AP technology decision-makers will prioritize building a mobile strategy for customers or partners, while only 39% will prioritize it for employees. Firms in Australia, Indonesia, India, and China will lead the region.
In order to compete and win in the age of the customer, organizations cannot be simply “customer-centric” anymore — they must become “customer-obsessed.” To do so, firms must embrace the mobile mindshift and build mobile systems of engagement. This can be done by leveraging social, cloud, and predictive analytics to deliver context-rich mobile applications and smart products that help users decide and act immediately in their moments of need. Such systems will focus on people and their immediate needs in context rather than processes, as is the case with traditional systems of record.
Building mobile systems of engagements is even more critical for firms in AP, because:
Looking back at 2013, it’s easy to see all of the great innovation occurring within the digital store. Most retailers focused on omnichannel fulfillment, whether it was click-and-collect or ship-from-store. Some retailers like B&Q in the U.K. began to experiment with dynamic pricing in-store. If 2013 was about launching new services, 2014 will be about shedding light on the actual performance of these initiatives.
One example of new digital store technology is eBay’s digital storefronts. Last year in June, eBay made a splash by deploying a digital storefront for Kate Spade, allowing customers to browse and buy products from a giant digital screen strategically placed over a vacant physical storefront. This digital storefront replaces the static posters that mall operators use to cover up vacant stores. This past holiday season, eBay expanded the pilot and deployed a series of digital storefronts in a popular San Francisco mall. These new digital storefronts are a few blocks from the Forrester offices, and I capitalized on the close proximity to conduct some research on how the technology was being used and received. eBay launched three digital storefronts: a small format Rebecca Minkoff storefront, a small format TOMS storefront, and a large Sony storefront in front of an escalator exit.
In mid December, I spent two hours observing customer interactions with the digital storefronts (some might even call it lurking). After an informal assessment of almost 500 shoppers who passed by these digital storefronts, I came to the following conclusions:
Here at the World Economic Forum annual meeting in Davos, I moderated a CEO discussion on “The New Digital Context” (video below). Thank you to my panelists Marissa Mayer (Yahoo), Marc Benioff (salesforce.com), John Chambers (Cisco), Randall Stephenson (AT&T), and Gavin Patterson (BT).
We are in the age of the customer, where technology is dramatically accelerating the shift in power from institutions to individuals, forcing organizations to be with their customers as they move through time and space.
My big takeaways from the panel:
The age of the customer underpins what’s coming next in tech: context-driven systems, the Internet of everything, and customer-centric software.
Much of the Internet of everything will focus on personal care and health.
These leaders want more transparency from the Obama administration regarding privacy — critical to regaining customer trust.
Total privacy is history. The national security concerns are too great. In the future, the best that people can hope for is that 90% of their data will be private.
With 2013 coming to an end, it’s time to bring out the crystal ball and make some predictions about 2014. Those who follow Forrester’s research will know that we’re living in the age of the customer, a period in which customer obsession will be the key to winning in all markets. Computing is a critical technology element in the age of the customer: The use of tablets by sales professionals creates richer experiences for prospects and customers, even as the use of wearable technologies by health professionals helps phlebotomists find the vein in a patient’s arm more quickly. Computing is a front-line, customer facing experience that helps companies win and serve customers more effectively.
With that context in mind, I present six meta-trends that will be critical for computing in 2014:
These devices are starting to find their way into the hands of consumers, but much of the retail channel has yet to catch up. Smart locks, smart wearables, and smart fitness devices are all generally being sold through the traditional online and offline channels for electronics and devices; sports stores, clothing retailers, and home hardware stores have been slow on the uptake. In the US, we have already seen some electronics retailers (such as Best Buy) significantly expand their “smart wearables” section from a small pod to an entire aisle or even a dedicated corner or section of the store. At the same time, many sports stores have not even started carrying the latest fitness tracking devices — something that should be in their sweet spot.
Most of them are US startups initially backed by venture capital (VC). Some of them are now worth more than $1 billion; others are planning for an IPO; and a couple of them have been acquired for a lot of money while generating little (if any) revenue. Most originated in social media, in the collaborative economy, and pretty much all of them depend on mobile as a significant and growing part of their business. They represent the typical attendees at the LeWeb conference in Paris, looking to become the next Facebook or Amazon in the next 10 years. Some other smaller and less well-known startups competing in LeWeb's startup competition this year may join this list: http://paris.leweb.co/programme/startup-competition
In fact, what they really have in common is that they are all digital disruptors leveraging digital platforms to create new experiences on top of connected devices. They are taking advantage of open development tools and free infrastructure resources to overhaul products, invert category economics, and redefine customer relationships. They are more agile than traditional companies. As my colleague James L. McQuivey stated recently, digital disruption requires an organizational fix if you don’t want your company to be disrupted.