Married to Engagement? Get a Divorce

What’s the hottest term these days in insurance? Come on, you know this… no no, not disruption… that’s a thing of the past. We’re now collaborating. Last chance – starts with an E… OK here it is… e-n-g-a-g-e-m-e-n-t. Customer engagement. SPOILER ALERT. I’m not going to share with you customer engagement secrets, even though I have a few. Instead, I’d like to talk about the meaning of customer engagement, and whether or not it’s the right strategy for insurance companies.

It all started in March 2006, when the Advertising Research Foundation announced the first definition of customer engagement as “turning on a prospect to a brand idea enhanced by the surrounding context.” Confused? So am I. Perhaps that’s why this definition was criticized for being too broad, having others offer their own definition. Here’s another definition by Forrester – “creating deep connections with customers that drive purchase decisions, interaction, and participation, over time.” That’s better. To make a long story short, the idea of customer engagement is to drive customers to be loyal to the brand, which may translate to higher customer retention rates, additional purchases of products-slash-services, and a bigger customer base thanks to referrals from existing, loyal customers.

Now that we established the value of customer engagement, it would be great to look at some customer engagement success stories in insurance. Unfortunately, I couldn’t find any. What I did find is a white paper created by Pitney Bowes. Apparently, they also have an “insurance customer engagement” solution, and maybe you’ll even get a discount on your postage meter if you bundle the two.

Can you have a committed relationship without engagement?

Yes. Click play. I added the transcript below just in case.

Kramer: Hey Frank, you got two beds in here.
Frank: That’s right. That’s me on the left.
Kramer: So you sleep in separate beds?
Frank: 30 years ago we came to an agreement – it was the only way I could get some rest.
Kramer: Really…
Frank: Estelle’s got the jimmy arms.
Kramer: You can get that in your arms?
Frank: Like you wouldn’t believe.

The Gist. Frank and Estelle were in a relationship for a long time. Could they have been more engaged in their relationship? Absolutely. But, did the fact that they weren’t as engaged as others have an effect on their relationship? Were they less in love, or committed to each other compared to couples that were more engaged? Absolutely not. You see, there are three types of relationships in this world: (1) those where you sit at the same side of the booth (high engagement level), (2) those where you sleep in separate beds (low engagement level), and (3) those in between.

If you think about it, we have similar relationships with brands; there are brands we like to have by our side at all times (Apple). There are brands that we prefer to keep our distance from (insurance) . And there are those in between. There’s more to this. We often make a mistake by thinking that engagement can be created by one side, but just like in real-life relationships, it takes two to tango. So while your partner or a brand for that matter tries really hard to get you engaged, it will only work when you’re also willing to put the same amount of effort.

Sometimes the solution is to work around the problem.

In a recent interview with Inc.com, CEO & founder of Clearcover Kyle Nakatsuji explained the problem: “I worked with the VC team at American Family Insurance and over time came to a realization that, in hindsight, is pretty obvious: Insurance is boring. Most people would prefer to think about it less, not more. Despite that, almost every insurance company I talked to was spending an incredible amount of time and money trying to get people to think about their insurance company more often. Advertising, endorsements, phone apps… they wanted to be a bigger part of everyone’s life. If the customer’s natural state is disengagement, it’s expensive to try to get them to engage .”

While so many are busy talking about the importance of customer engagement in insurance, Kyle and his team decided to work around the problem, instead of trying to solve it – “when we looked at the model, we got excited about the idea of what we call “incidental insurance”: Using tech to seamlessly integrate insurance within a handful of moments when it’s naturally necessary people to think about insurance. Aside from those moments, we’ll leave them alone.” By the looks of it, Kyle and the Clearcover team aren’t going to solve the customer engagement problem for insurance, but, who says it needs to be solved? After all, insurance companies have been selling insurance way before customer engagement was a thing .

You think Amazon has engagement?

Let’s give this some thought. Does Amazon, one of the most successful companies in the world, excel in customer engagement? Is that why they are so successful? When was the last time you found yourself engaging with Amazon without a specific need, just because you felt a deep connection with their brand? A quick visit to their Facebook and Twitter accounts will show you that engagement isn’t their strong suit, and that’s just fine because Amazon is primarily about convenience and options, tons of options. Amazon is the diner of the internet .

Let’s talk about diners. When I was a kid in Israel, my mom would take me to the market to help her carry the heavy bags. She had a routine and I would follow along patiently until I would lose my patience. In the market, there are aisles with stands of fruit, vegetables, dairy and meat products. There was one stand that my mom would always stop by – the tomato stand. This stand only sold tomatoes – nothing else. I remember getting annoyed when we would pass by other vegetable stands that offered all the vegetables you can think of, as my mom would get everything she needed, except for tomatoes. She always had to get tomatoes from the tomato-only stand. This is when I learned the lesson of quality over convenience. And apparently, my mom isn’t the only one that prefers quality over convenience. Play.

As I got older, I also had my “tomato-only” stand. I would travel great distances in search for the best hummus, and when I found it, there was no going back. And then came my first diner experience – I couldn’t understand how one restaurant can prepare so many dishes. I used to eat at restaurants that had only one thing on the menu, and now I see so many options, all in one place. I then took my first bite and learned the lesson of convenience over quality.

While insurance companies were busy perfecting one thing, Amazon, Google, Facebook and Apple were busy doing everything else .

Remember school? Back then, we were told to focus on one thing and one thing only, because that’s how you become an expert. The only problem with that is nowadays (I call it the “lazydays”) most people will give convenience a chance, especially when you have free trials, and great exchange & return policies. That’s why Macy’s sells clothes, but also Furniture. That’s why diners are so popular. That’s why IKEA just bought TaskRabbit. That’s why Amazon, Google, Facebook and Apple are what they are today. There is no art in what these companies do, they just do it all, or try to, all for the sake of convenience.

Wait, there’s more. Picture this: you walk into a store, one of the employees greets you and asks if you need assistance. You look around, you think of a few things and that’s when you start thinking of your escape plan. Some of us leave while thanking the person who greeted us. Some of us leave while staying focused on our phones. And some of us leave promising to return. The common thing here is the feeling of guilt. Guilt for going into a store and leaving empty-handed, because in the old days, if you went into a store you usually purchased something. When shopping online, there’s no guilt, there’s just a red X button. This is what successful companies understand: online customers are cold-hearted clickers that can get rid of you guilt-free with a click of a button . Their solution? Offering as many products and services as they can, because they might lose customers at one place, to later win them over at another.