Have you ever felt frustrated how long it takes to sort out an insurance claim? Have you ever been unhappy with the form filling and paperwork? Have you ever ‘stretched’ a claim? (Don’t worry you don’t have to answer that one – but the evidence suggests you might have!). Well, a new insurance business is taking a Dramatically and Demonstrably Different approach to try and end all that by providing a speedy, responsive and seamless customer experience driven by bots!
Lemonade appears to be doing just that by disrupting what they believe is a ‘traditional’ (even ‘old fashioned’) industry… and the co-founders Daniel Schreiber and Shai Wininger are using high tech and ‘modern’ way of doing it. They have come from the outside the industry and acknowledge that they have no real knowledge or understanding of the industry and have turned this to their advantage. Daniel says “We ‘milked our ignorance for all its worth’ to create a brand new model and building it from scratch” and there are some great lessons in their for any one wanting to create a ‘Dramatically and Demonstrably Different‘ customer experience. Here they are…
Lesson 1: Choose ‘Em Or Lose ‘Em!
They are definitely NOT trying to be all things to all people. 81% of Lemonade’s customers are aged between 25 and 44. They have focused specifically on young, tech savvy professionals and offer them renters insurance, homeowners insurance and condo’s insurance for their rental properties. They are licensed to offer other services, but have decided to focus on those areas to start. They recognise that some customers are not ready for this ‘modern’ approach (yet!) and don’t push for them. Daniel says that he feels that the number of these people are diminishing, and will adapt one day. In the meantime, they are focusing on the ‘trendy’ young people who will be happy to arrange their insurance while stood in a queue in Starbucks… and have created a customer experience that will allow them to do just that in the time it takes to get your grande, iced, sugar -free, vanilla latte with soya milk!
Lesson 2: Break The Rules…. Create New Ones!
A great source of establishing a Dramatic Difference is breaking (and rewriting) the industry rules. It’s about doing things that their competitors aren’t doing – even better, can’t do! Lemonade have focused their efforts on this ‘big style’! They believe that the insurance world has lots of limiting rules that don’t help customers or insurers and have gone about breaking them and establishing some new ones. For example, imagine getting your insurance quote from a bot via an app on your phone, knowing the fixed price for insuring your flat, doing your claim via the same app and getting it resolved in and paid ‘on the spot’! That’s exactly what Lemonade Inc. do!
“Dealing with your insurance should be no different from chatting with your friends” explains Daniel and that’s what they’re trying to do throughout the customer journey – that’s why they use ‘bots’ who are instantaneous, always there (you’re never ‘put on hold’!) and make it easy to do business with. They’ve introduced Policy 2.0 which means the wording has been shortened so as to be readable in 10 minutes and customers are able to increase and decrease their coverage as and when they please – again, it’s about ‘making them easier to do business with’.
Lesson 3: Demonstrate Your Dramatic Difference In Everything You Do!
Maya is their chatbot who helps customers navigate the signing up process via their easy-to use smartphone app. She’s got quite a cheeky ‘personality’ and can get you ‘signed up’ in 90 seconds – no lots of ‘form filling’, but a prompted process that’s very easy to navigate – all from around $5 a month.
Policyholders can alter, upgrade their insurance to get more or less coverage ‘at the touch of a button’ – there’s literally no paperwork! You also file claims from your phone at any time via the ‘Make A Claim’ button and a via another bot (this one’s called Jim!) and send videos to describe an incident. 33% of claims are paid into your debit card account ON THE SPOT!!! The remaining 66% are paid within one working day – that is Dramatically Different and pretty impressive!
Lesson 4: Build Trust!
A key ingredient of the Lemonade approach is that they believe that there’s not much trust in the insurance world and historically this has created an ‘us and them’ between insurers and their clients – it’s very much ‘you win, I lose’ (or vice versa) and there’s very little trust. So, they’ve worked hard on this by being very transparent about their fees and they worked on fixed fees. That’s a good start, but the ‘Dramatically and Demonstrably Different‘ bit is that if you don’t claim during the year, and there’s money left over, that money goes to a charity that you have nominated! They believe this completely reduces the ‘us and them’ and helps build trust – something they feel is lacking in the industry. They also feel that people are less likely to make false claims as they would be defrauding their nominated charity’, and if they don’t claim, they know the charity will benefit.
Lesson 5: ‘Get Personal’ To Maximise Customer Relationships!
The personalised approach is a benefit to customers, but it’s also a benefit to Lemonade. By using data analysis they also work hard to tailor their products to individuals specifically. Using the personal data of their customers they are creating real insights into their individual customer’s lifestyle, habits, needs and they can deliver totally personalised unique offers specific to each customer – it helps them build ‘ties that bind’, which if they get it right, should lead to increased customer loyalty and ultimately…spend!
Lemonade Inc. is a small ‘up start’ start up business and sold $10 million in policies last year in 19 U.S. states. They’re fast, they are focused, they are responsive, they personalise the experience and they are clearly disruptive, but there’s still a long, long way to go. It will be interesting to see if and how they ‘scale’ and how the rest of the insurance world reacts… whether they ignore their approach (think lots of retailers, taxi companies and hotel chains ) or whether they embrace (and develop it) to improve the overall way the industry deals with its customers.
So, after 5 Lessons, here are 5 Questions for you…
- Which Customers (Existing Or Potential) Should You Be Focusing On?
- What ‘Rules’ Could You / Should You Break?
- What Customer Problems And Frustrations Could You Eliminate?
- What’s Your ‘Dramatic Difference‘?
- How Do You ‘Demonstrate‘ It?
If you want to hear an interview with Daniel Schrieber on then you can listen here – it’s well worth it I promise….