Customer experience is the new battleground; social analytics is the new intelligence corps

Providing a compelling customer experience will be the critical basis of competition for insurers in 2012 and beyond. As volatility impacts every aspect of life, society is simultaneously becoming more virtual as life is lived online. Technology continues to transform the physical world of tangible assets and face-to-face meetings into a virtualized world of intangible sentiments and community-based events. Social networks and consumer-centric media services have transformed into new communication and sales channels comprised of self-forming markets created from the millions of individuals that join Facebook and other communities to share interests, advice, and activities with people both down the street and around the world. Like teenagers on social networks, insurance companies care about what others think and say of them, so being able to gauge market and customer sentiment through the use of social analytics is fast becoming an investment priority.

The corporate face now feels “at home” on Facebook

Twelve months ago, we asked a large audience of business and IT managers how many of their businesses had a Facebook or Twitter account, and everybody just laughed. We asked the same question a couple of weeks ago at a non-life insurance industry event organized by Post Magazine and, this time, just under half of the delegates raised their hands, and there was not a snigger among them. What a difference a year makes.

According to a study by theUniversityofMassachusetts Dartmouthon the 2011 Fortune 500 and Social Media Adoption, 62% of the 2011 F500 have active corporate Twitter accounts and 58% have Facebook accounts. While specialty retail companies lead the Twitter rankings with the most accounts, companies in the life and non-life insurance industry are most likely to be on Facebook. Interestingly, 31% of the 2011 F500 have neither a Twitter account nor a Facebook page – an indication that a significant proportion of companies are still formulating their social media strategies or have decided not to actively engage with customers through this medium. This does not mean, however, that these companies are not actively monitoring the social Web, as there is, clearly, real business intelligence to be gained from doing so.

It now seems somewhat odd to think that a business or institution with a large consumer market or audience would not have a Facebook page or a Twitter presence; most organizations, it seems, now recognize the need to have a flag that states: “we are here.” Things might change in the future, but, currently, Facebook and Twitter are where most companies’ customers or audiences are. These social media sites are their community network and this is their virtual neighborhood. Insurers cannot afford not to participate in some way, even if it is only to monitor conversations to catch unpopular sentiment.

Organizations can gain significant insight and market intelligence by “listening” to the social web

Listening to customers’ discussions of their experiences, issues, concerns and suggestions on the social Web is all well and good, but an organization must then be able to demonstrate, through its actions, that it understands what has been said. For example, if a customer “tweets” about the poor service from an insurer, then the company should respond with a direct message to the customer with an offer to investigate the issue. Immediately afterwards, the insurer must investigate the matter to determine if it is a problem, craft and implement a solution, and reach out to the customer to inform them that the matter has been resolved. Insurers wanting to be “best-of-class” will ask the customer to let them know if the problem actually has been resolved or invite them to reach out to them with any future problems.

In the past, insurers did not consider customers to be used as part of their quality control process. But one reality of conducting business in the digital marketplace is that customers have more power to shape or destroy a company’s reputation. Moreover, insurers can learn how to improve service, products or other aspects of the business by monitoring customers’ dialog in the social mediasphere.

Maintaining a strong reputation will not be easy in this brave new social media-driven world

Reputation analysis solutions automatically extract meaning from articles and conversations found on the Web, and identify emerging trends and their implications for the reputations of people, companies, and products. Such solutions are designed with the corporate marketing function in mind, and help corporate communication professionals to manage communications across traditional and new media, including newspapers, television, blogs, forums, message boards, social networks, and online communities.

Increasingly, reputation analysis is also being used to support litigation where unfounded, defamatory comments may negatively influence a company’s reputation. For the reasons set out above, Ovum believes that the ability to “listen and understand” is fast becoming an essential capability for insurance companies.