Blog: Know your customer... and your opposition

There are very few companies in the world that will survive, let alone thrive, over the next five years without understanding and responding to the changing customer dynamic and the longer term impact on sales of technical innovation.

Customer habits and attitudes are changing fast, driven often by failure of trust (think payment protection insurance mis-selling or the Volkswagen emission scandal). And UK brokers and insurers are in the eye of this storm: buffeted by global markets, vulnerable to the fickleness of their customers and exposed to the ravages of new capital. Trust is an issue here too where, with the rise of the aggregators and a supermarket approach to selling, insurance has frequently been dumbed down to an inadequate, self-service product.

It is a time for acquiring knowledge… most particularly in the shape of ‘know your customer’ and ‘know your opposition’. Our customers and many of our competitors have changed dramatically in recent years and we need to get to the root of what is driving this behavioural shift.

Since the UK decided to leave the European Union we have been locked into much the same debate that was heard before the referendum. The argument between soft and hard Brexit has perpetuated the uncertainty, as have the questions over the impact on the economy and jobs and immigration. Messages are mixed. World stock markets have soared in the short term and meanwhile the pound has fallen some 15% against most major currencies, which is good for exporters and bad for importers, we are told.

Our customers are affected by all of this. They may be owners of a small manufacturing business which is finding it slightly easier to find overseas markets but they are also complaining bitterly about the increased cost of their overseas holidays. In other words, disruption brings complex and unexpected outcomes.

In order to get to grips with this, KYC demands much closer attention. We need to ‘eyeball’ our clients more frequently and get involved in the conversations they are having. Many of my customers are small businesses and I want to know how they are talking to their own clients and managing change. I also want an inside track on what they think about such issues as the impact of the self-service economy and the rises in insurance premium tax.

Technology gives us many more alternative offerings for our customers. Do they want a ‘Ryanair-type’ solution where they are penalised for every variation from the standard package? Or do they want the extra reassurance (and cost) of a model offering a competent human element when things go wrong?

‘Be relevant’ is the key maxim. To add value and encourage loyalty, we need to ask more challenging questions. We also need to be sure we’re engaging with the right people. All client businesses are in a dynamic state of re-invention and it’s easy to find yourself talking to the old guard rather than the true decision-makers.

Which brings me directly to the question of how we innovate and develop our business processes in the context of the customer. If you look at your business as a relay race, the emphasis must be on handing over the baton to the most talented people. Attracting and keeping the top talent demands engagement and transparency about future opportunities. Transparency too about your succession policy.

When you look out of the window and think where your business is going to be in five years’ time, the answer almost certainly lies in KYC and KYO. Understanding your customers’ needs and their desire to gain access to insurance services will provide the direction and the competitive advantage.