The leading Nordic insurance firm, If, was worried about the quality of the online experience for its customers. Too many dropped out of the buying process before getting a quote. It took this problem as the starting point for an innovative experiment.
First, a team was set up to test the hypothesis that by increasing customer centricity in its operations, If could improve customer satisfaction and increase sales. Central to the six-man team’s approach to tackling this hypothesis was the decision to directly involve customers. This, it was believed, would yield greater customer satisfaction leading to a higher hit ratio, resulting in an immediate increase in sales. The experiment focused solely on the purchasing experience. As If’s head of marketing and communication Katarina Mohlin explains: “We had just 6-8 weeks to design, implement and analyse a prototype model that would put our hypothesis to the test. For this reason, we needed to focus on an understandable and manageable area of our online business. We chose the customer purchasing experience in our private insurance business.” Experiment scope defined The experiment team of Katarina Mohlin, Jonas Billberg, Tiina Autio-Begley, Ville Haapalinna, Lars Karlsson and Jörgen Hidén recognised that the speed of the digital world meant the typical three-year design, develop, test, pilot, launch cycle for new service launches would not be quick enough to affect a transformation of the company’s online presence. The truncated timeframe was ideal for this experiment. It meant that shortcuts would have to be used, outside the more traditional project management model. For example, they quickly decided to avoid writing and seeking approval for a formal business plan – that would have taken far too long. The experiment scope was defined as follows:
With the scope agreed, a pragmatic division of tasks saw two work streams being established. The first of these was a usability analysis, for which a series of usability tests conducted the previous year provided an excellent baseline. The second work stream focused on setting up and testing the prototype online purchasing experience. Work stream 1: Usability analysis. Following advice from the company’s marketing team, rather than re-inventing the wheel, the team dug out the previous year’s usability study findings. These flagged a number of issues with the existing website. Customers felt the whole process was too long, with too many questions to answer before they could actually make a purchase. In addition, If put all its products on the home page, seeing it as a shop front for its own purposes, rather than making it easy for the customer. Customer feedback was, “I only want to buy one insurance, so let me do that first and then I might consider buying more”. “In a nutshell,” says Jorgen Hiden, “our customers were telling us that the purchasing process was too complicated. They wanted to see prices quickly with nothing else getting in the way. We also carried out some analysis of when customers dropped out of the purchasing process and this too suggested that the earlier we showed the price and the fewer questions customers had to answer, the less likely they would be to drop out of the process early.” Work stream 2: Design and prototype. This work stream used the findings from the usability analysis to work on the design and test a prototype of a new purchasing experience. They contracted with an external web agency for the website build. “We had two key factors to consider,” notes Katarina Mohlin. “First, we wanted to make the process fast and simple, so our customers could quickly get an estimate for their insurance. Second, we needed to ask ourselves what questions were an absolute requirement in order to give a good price estimate, such as their social security number and vehicle registration number. Our objective was to reduce 12-15 underwriting questions down to between two and six.” The team recognised that reducing the number of questions would have a risk implication for the business. Mohlin continues: “We asked how much knowledge about the customer and their risk profile we really needed, bearing in mind that the more we know about a customer, the better able we are to manage the risk. So, in a sense, we had to make a trade off between this and attracting and retaining more customers with a simpler online experience. In reality, when we ranked the questions we needed to ask, the absolute priority ones didn’t really change; it was more a case of weeding out the unnecessary questions.” The seniority of the experiment team members – all were heads of their respective business units, such as the head of distribution for Sweden and the head of business development for the Baltic countries and Russia – clearly meant that decisions pertaining to risk could be made by the project team. There was no ‘selling in’ of the concept because these were the very people from whom permission would be sought if it was a less senior team. In addition, the prototype design stage involved a number of people with direct customer experience, such as the internet sales manager for Sweden. This provided a vital customer perspective, before testing on actual customers began. Usability tests Nine customers were invited to take part in the usability test. They were representative of different age groups, gender and place of residence (town or country). Says Mohlin: “We wanted them to have some internet experience, but didn’t need them to be experts. After all, we were trying to test a simpler purchasing experience.” The participants performed 12 tasks using the prototype and were asked to think out load because they were filmed during the process. “We wanted to gauge their reaction to different elements of the purchasing journey,” recalls Mohlin. For that same reason, the mouse movements of each participant were observed to assess how confidently they carried out different tasks. And the result? There was unanimous approval for the new, simpler purchasing process. Indeed some of the participants found it hard to believe that buying insurance could be so easy. Importantly, they were able to provide feedback on ways to improve the prototype and this resulted in some fine tuning after the test period. Next steps The experiment team believes it has strong evidence for taking the prototype and moving into a real life pilot. It accepts that as a prototype tested only on a handful of customers in one country, the findings are not conclusive, but all the findings support the initial hypothesis: increasing customer centricity will improve customer satisfaction and increase sales. The team has recommended the introduction of a new purchasing process, based on a simpler, more user-friendly web interface. So what does the experiment tell us about the process of making change happen quickly? The team lists a number of factors in its ability to develop a hypothesis, design, implement and test a prototype and recommend next steps in just eight weeks: Tight timescale: The restricted timeframe was, in fact, a factor in the experiment’s success. “It focused us and meant we had to cut away all those project management methodologies that add to the time of making change happen,” says Katarina Mohlin. “We had to identify shortcuts, like using existing usability studies, rather than setting up a brand new focus group.” Senior level team members: “We had decision makers in our team. This is very important and allowed us to circumnavigate certain processes, such as drawing up a business plan, which would have taken too long. Essentially, we had all the necessary permissions and resources within our group – it got us from A to B very quickly.” Experiment vs pilot: As with other If experiments, the value of developing a prototype is huge. “This was an experiment, not a pilot,” notes Jorgen Hiden. “This wording is crucial, because it is about allowing an idea to be quickly and cost effectively brought to fruition as an experimental prototype. A full-blown pilot, on the other hand, requires a detailed business case with cost rationalisation and typically follows a prescribed project management methodology. Prototyping is both cost effective and fast.” Inspiration/innovation: The team chose to try out new ways of measuring customer responses to the prototype. They videoed the customers and analysed their mouse movements so there was no doubt about their reaction. And finally, the Customer Centric experiment team believes that this should be just the start of a portfolio of customer centric development projects. “Based on our experiment, we recommend making the involvement of customers mandatory in all our development work to increase sales and customer satisfaction,” concludes Mohlin.