Mastering the intangibles of a customer's experience is crucial to delivering more value and achieving greater loyalty. Prameet Jamnadas, a partner with Bain's Financial Services practice, discusses how the 40 Elements of Value® in B2B markets can help identify which elements and customer episodes matter most to insurers.
Read the Bain Brief: Uncovering the Elements of Value in Commercial Insurance
Read the transcript below.
PRAMEET JAMNADAS: We spent a lot of time at Bain & Company dissecting this concept of value and determining what it is about a product, or service, or solution that drives value in the eyes of the consumer.
Now, this concept is particularly complex in B2B settings, given that a product clearly needs to drive value for the end client, but there are many stakeholders involved in the purchase and the ongoing use of a given product that need to be considered quite deeply as well. So we found that there are 40 Elements of Value in B2B settings that can help companies lift their products and their value propositions up above commodity status.
Now, we can think of these elements right on a pyramid, at the very base of which is a set of table stakes elements. Is this product an acceptable price? Does this product meet my basic specs? But as you move up through that pyramid, we move through a set of higher-order and equally or even more important elements, things like, functionally how does this product in this company perform? Is this company easy to do business with? And even individual elements that describe how well does this company help me meet my individual needs in my job, in my career, and frankly, even in my life?
We apply these Elements of Value to commercial insurance, a pretty complex world, given that it's an intermediated business. And these elements will look quite different, depending on whether you're standing in the shoes of the end customer or the broker.
Now, if you were to ask end customers which elements really matter in choosing a commercial insurer, a pretty predictable list of elements emerge, things like, does this ensurer help me reduce my risk? But when you actually look at which elements really drive customer advocacy and customer loyalty, quite a different set of elements emerge. The quality of an insurer's solutions and helping address a company's risk management needs; the insurer's expertise in my business around that insurer's responsiveness.
And we find that insurers that do really well on those elements, particularly during three episodes—providing an initial risk assessment, providing ongoing risk management advice, and then managing and moderating a claims process—those insurers that do well on those three episodes enjoy 20 points higher [Net Promoter Scores] than all others.
Now, commercial insurers clearly face a lot of choices on the path to profitable growth, and typically address critical questions core to commercial insurance operations, like portfolio optimization around underwriting effectiveness, around pricing. But we found the Elements of Value to be a really instructive guide in helping commercial insurers fine-tune their value propositions and help commercial insurers determine how best to win and to keep new business and really stand out from the pack.