Understanding Digital Expectations – PwC Report
Article Synopsis :
In the digital age, it’s about understanding customer needs and then aligning the business – all of it – to serve those needs.
“Understanding Digital Expectations” from PwC explores the expectations for digital in large Swiss companies in particular. Based on a survey of over 100 top and middle management executives and over 500 customers, the report compares and contrasts four key industries: banking, insurance, retail and consumer goods.
According to the survey, among the four industries, Insurance is least-aligned to digital. The reasons are mainly organizational, specifically:
- Polarised organisational structures: A preoccupation with daily operations and managing only existing revenue streams restricts the ability to embrace new technologies and ideas.
- User centricity – a missed opportunity: Current efforts fail to meet customer demands and needs. There is an 18% gap between management and customer perceptions of user centricity.
Customer expectations with respect to services and user experience are evolving at such a fast pace that differentiating oneself from the competition is a challenge for almost every player in the market. To help insurers break ahead of the pack, the study suggests two action items:
- Break rigid structures to improve customer centricity: Place customer needs at the center of operational, product, and customer engagement strategies. “Customer engagement” isn’t a department but woven into the organizational mindset, resulting in superior products and services.
- Explore true value-adding, data-driven services: Value-adding services linked to digital adoption should flow freely through the organization like “blood in the veins.” When the entire organisation is attuned to the customer journey, that’s when the real value-add happens.
Per the survey Banking is perceived as being most aligned with customer digital expectations, with retail and consumer goods following second and third. The discussion on retail is particularly insightful as retailers – like insurers – are trapped in a structure where every penny needs to be pinched for cost optimization. A common theme across all four industry discussions is that digital is easier said than done.
The four key managerial implications from the study are as follows:
- Alignment: A shared awareness of the accelerating rate of digital change across all levels of managements is lacking.
- User centricity: The evolving digital needs of customers are frequently not being fulfilled by new product and service offerings.
- External perspectives: Innovating with existing capabilities and perspectives is one of the main limitations of companies today.
- Self-disruption: Companies should be willing to adopt a “fail fast, succeed sooner” attitude.
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Digital Insurer's CommentsDigital customer expectations are often as hard to ascertain as they are to deliver upon.
Adding value for customers through the development of new digitally enabled offerings is complex and challenging, especially with the limited existing capabilities of organisations and the lack of a broad understanding of the full potential of digital.
While many industries and companies approach the problem in different ways, we agree with this report in that success depends first and foremost on alignment between management perceptions and customer expectations. Followed closely by a culture and structure that allows companies to be agile and flexible enough to capitalise on emerging opportunities. Seeing digital opportunities, after all, is only valuable to the extent you’re able to seize them whilst they still exist.
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