As we head into planning season, brands will need to make choices on where to invest. The digital customer experience should be near or even at the top of the list. Here are 10 reasons why:
1. Increasing digital adoption means lowering the cost to serve customers.
Moving a customer service conversation from phone to chat can reduce the cost by half or even more. Digital self-service represents an even bigger cost savings for the organization.
2. Customers prefer digital channels for service and support.
Our research shows higher levels of satisfaction when customers can serve themselves online. The J.D. Power 2022 U.S. Retirement Plan Digital Experience StudySM finds that overall customer satisfaction with the retirement plan digital experience rises 191 points when participants can complete tasks by themselves on their plan’s website or mobile app.
3. A good digital experience lifts customer satisfaction.
Delivering a great experience is how leading brands differentiate, and digital channels can play an integral part of that experience.
The J.D. Power 2022 U.S. Claims Digital Experience StudySM finds that overall satisfaction with the claims process is higher among customers who use digital first-notice-of-loss (FNOL) tools compared with satisfaction among customers who report a claim via an insurer’s call center.
4. Digital tools require more investment to live up to customer expectations.
Our research shows that digital solutions are missing the mark on personalization. The J.D. Power 2022 Digital Banking Studies found that, among retail bank customers who visit their bank’s branch, 73% say they have a personal relationship with that bank. Among those who primarily use the bank’s digital channels, that percentage falls to 53%.
5. Digital channels create the opportunity to better engage with customers.
Engagement is especially important in the property and casualty insurance industry where the claims experience is a key driver of retention and advocacy.
Longer claims create more of a need to manage customer expectations and to keep those customers informed. Insurers need to make it easy to exchange information with an insurer, receive frequent updates on progress and ask questions along the way.
J.D. Power research finds that customer experience with the estimation process is the most notable driver of digital satisfaction for the claims experience, adding a significant 66 points to overall satisfaction scores when it is done well.
6. A good digital experience drives retention and growth in the business.
With average job tenure for Millennials and members of Gen Z now hovering below three years, retaining investors through employment changes has become a top priority for retirement plans. Our research shows that when plan providers get the digital experience right, they see a very significant lift in the likelihood to grow and retain participant assets long after they have left their current employer.
The J.D. Power 2022 U.S. Retirement Plan Digital Experience Study finds that strong digital performance is highly correlated with retirement investor asset acquisition and retention. Among top digital performers, 50% of investors say they “definitely will” keep their assets with their current provider in the event of a job change, vs. 17% of investors with low-performing firms.
7. Digital can change the perception of time.
Across the industries covered by J.D. Power research, timeliness is almost always a key driver of customer satisfaction and digital can play a key role. In the insurance industry for example, notification through digital channels can actually shorten the perceived time to process a claim.
The J.D. Power 2022 U.S. Claims Digital Experience StudySM finds that customers are nearly two times more likely to say the process was quicker than expected when they are provided with regular status updates through insurer websites or mobile apps.
8. A great digital experience will yield brand advocacy.
In the wealth management industry, the digital experience is especially important for younger investors who have significantly higher overall satisfaction and stronger brand advocacy when they engage frequently with their firm’s wealth management app.
The J.D. Power 2022 U.S. Wealth Management Digital Experience StudySM finds that firms with top-performing mobile apps earn the highest levels of overall customer satisfaction and also have strong brand advocacy, as measured by average Net Promoter Scores® (NPS) of 83. That compares with an NPS of 73 among top-performing websites.
9. Digital can serve as a platform for value added tools.
Take the case of shopping for insurance for example. The J.D. Power 2022 U.S. Insurance Digital Experience StudySM finds that the use of digital shopping tools—which help guide insurance shoppers to discounts, policy details and special coverage or unique benefits—is associated with a boost of 137-211 points in satisfaction, depending on which shopping tool is used.
10. Digital channels are scalable, especially in times of crisis or a surge in demand.
The utility industry if faced with storm outages on a regular basis. Our research shows that when mobile apps and websites work well, they become vital communications tools for utilities, helping them alert customers to storms and potential outages, providing useful information on sustainability initiatives and energy saving tools and dramatically improving customer satisfaction.
The J.D. Power 2023 U.S. Utility Digital Experience StudySM finds that digital channels have become the first line of communication, with digital traffic surging when consumers have a question. More than half (56%) of utility customers use the mobile app provided by their utility, up from 38% in 2022.
A great digital experience is important for success across many industries and should be a high priority on every brand’s roadmap.
About the Author: Michael Vermillion leads CX improvement consulting for J.D. Power and works with CX-focused organizations to develop, align and execute CX strategy.
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