Customer Centricity: Your Success Compass for Digital Business Models

Customer focus at the front-end is the key element for a successful digital project. This is because success comes only through acceptance on the part of the users. Some examples of customer centricity in the following three industries: Insurance, Healthcare and Real Estate.

For around 20 years, we have been accompanying our customers in the digital transformation process. During this time, we have learned that successful digitalization begins with users and their expectations, and not with internal processes or technological basics. Anyone who digitizes and wishes to succeed must rethink and culturally, structurally and technologically position themselves in such a way that the rapid development of new products and services fully meet the needs of their users. The best idea can be technologically perfect in its implementation but if it is difficult to use, or is launched too late, users will not accept it. Additionally, an optimal user experience at the front-end or (graphical) user interface is the central success factor for digital products and services.

However, it is a challenge to keep the focus on users in a complex project over a longer period of time as well as in many sub-projects. Many companies also begin with transforming their internal business processes and attempt to modernize their companies culture. This also directs the focus away from the needs of end customers. So how can it be maintained? Let us look at three classic industries whose product development traditionally takes place with little customer involvement: Insurance, pharmaceuticals and real estate.

Customer centricity & insurance

So far, the creation of new insurance products has been characterised by long cross-departmental development cycles. An entire year – from brainstorming to the start of sales – is not uncommon. To cover customer’s need for security, insurers take two paths: either they offer highly personalised insurances which is time-consuming to configure, or they offer all-round comfort packages (leading to some customers overinsuring themselves). Either way, the focus is on risk selection: “Bad” risks for the portfolio should be avoided.

As these insurance products need to be explained, they are hardly suitable for direct sales. Compare the online completion of an insurance contract with the shopping experience at Amazon or the Opel new car configurator. So, for the insurance industry as well, the key now lies in reducing complexity and offering customers understandable, needs-based insurance products. To ensure success, the guiding principle must follow the customers’ wishes.

Working with various insurers, we have identified three key points which customers want:

1. The written information on the products should be user-friendly
   Comprehensible product descriptions and information are crucial to maintain customer interest. As only those who understand what they ought to buy can recognise the personal added value. It’s easy to gain the trust of the customer with simple language and easily accessible information. This is the first step for customers in the purchasing process. An example: customers can already tell by name which protection services Liability Heroes specializes in. This clear language is also reflected in the provider’s product descriptions.

2. The products should be simple and tailored to the needs of the customers
   Complex products such as a life insurance policy are best explained by the broker. But what about simple standard protection services such as liability or motor insurance? Here, too, the amount of research customers put in is often enormous. Extensive contract documents, numerous application questions and a long contract duration are the main reasons for this. Customers want to quickly understand which risks are covered with an insurance product and which ones are not. Such products have to be redesigned for online direct sales. A good example to consider could be the “Zero Everything” tariff option of the US insurer Lemonade. With this option, customers exclude all deductibles and future price increases at the click of a mouse.

3. The purchasing process should be user-friendly
   In the digital age, customers make no distinction between the online and offline worlds. They expect all information and offers to be available via multiple channels. In order for customers and brokers to work well together, user-friendly web offers are needed with a convenient purchasing process. But all too often the opposite is the case: Too many entries for the price calculation, insufficient presentation of the product advantages, unnecessary intermediate steps or a lack of assistance are responsible for most early cancellations in the closing process. Many of these problems can be solved technically, for example by reducing the number of manual entries through database queries in the background.

Customer centricity & pharma

In the pharmaceutical industry so far, the pressure to transform has been comparatively low. But there is an increasing shift in thinking. New suppliers, whose products, services and internal organisation are based on customer centricity, are entering the market. Something so important in the digital age. Established pharmaceutical companies are now looking for ways to meet the needs of their customers better and faster. This is complicated because there are four target groups to consider: patients, doctors, pharmacies and health insurance companies. It is feasible, however, to focus fully on the customer here as well. To simplify this, we distinguish between two sales lines based on products: over-the-counter medicines (OTC) and prescription-only medicines (Rx).

1. OTC
   In the case of medical products bought over the counter, the primary aim is to directly support the decision-making and purchasing processes of end customers via digital channels. Medicines are products requiring explanation. Helpful here are websites and customer portals with easily understandable information and digital services such as the automatic display of possible interactions between two selected substances. Still available, too, is the classic communication mix on the various offline and online channels.

2. Rx
   It makes less sense to advertise prescription-only preparations directly to the end customer as the focus here is mainly on the prescribing physicians. With the Customer Centricity Compass, however, you can find accompanying products and services which offer patients a good overall experience regarding brand and product. These could be health apps such as blood sugar tracker for diabetics. Anything that strengthens personal health through prophylaxis and prevention is an option worth considering.

Customer centricity & real estate

The real estate industry is currently making very targeted attempts to digitally transform. Here, too, one is guided by what the customers wishes. The “Internet of Things” and new “Smart Home” technologies have opened up new opportunities to offer residents and commercial users new services. In the medium and long term, new business models for the industry should, and will, emerge from this. Applicable here, too, is that just like during the gold-rush mood at the beginning of digitalization, a positive user experience is equally central to success as the actual fulfillment of customer needs. What do customers want? Here are three examples from our project work:

• Less paper, more speed: From the administration of contract documents to the annual invoicing of extra utility costs, there is still a lot of room for improvement here. Documents should no longer gather dust in the files, but be up in the cloud, and accessible anytime and anywhere.

• Fewer keys, more flexibility: Digital access authorizations instead of copied keys make life much easier. No-one will want to return to the conventional key ring who can let the parcel deliverer into their home at the push of a button or open the door for their friends while stuck in a traffic jam.

• Facebook instead of notice: Anyone who has overlooked the enormously important message from the property management on the bulletin board at the entrance will want communication to be as simple here as it is in social networks.

Not only residents, but also administrators are important target groups for digital solutions in the industry.

The way to successful customer focus in projects

From our long experience with digital transformation projects, we have derived a procedure which implements a customer-focused mindset and combines it with agile development methods and a flexible technology. If these three cornerstones are taken into account, projects become feasible which were previously only a vision.