By John I. Todor, Ph.D., Author of Addicted Customers (www.AddictedCustomers.com)
What
do you call obsolete information or knowledge that people use to make
decisions? Futurist Alvin Toffler calls it Ignorage. With rapid change and
shifts in context, customers may believe they are making informed decisions,
but in fact may be making decisions based on out-of-date information or faulty
premises. In many cases, they may never discover the problem, or on the other
hand, they might find out the mistake the hard way.
Sound
too vague to act on! Think again. Rapid and accelerating change leads to
ignorage of some form or another that is affecting everyone. Take insurance for
example. A national survey by Trusted Choice found that at least 32 million
household own insurance policies that are not right for them. For the most
part, this isn’t because they bought the wrong policy in the first place; it is
because their circumstances change or the world changed around them.
Is
someone at fault here? Not really. People just cannot be expected to reconsider
every prudent decision they have made in the past—it would be overwhelming. But
insurance companies are missing opportunities to build a relationship that goes
beyond convenience or the price of the policy. Through the use of relatively simple
analytic software, and a little strategic thinking on behalf of their customer
base, insurance companies could advise their customers that their situations
have changed and that it is time to re-examine their coverage.
Where’s
the negative in this? Clients get the coverage they want and need, and
insurance companies write bigger policies. Why doesn’t this happen in this
situation and literally dozens of other forms of ignorage that slip under the
radar? In addition, if the insured customers are at fault in accidents that
injure others, the injured parties have a greater chance of being treated
equitably. Why isn’t this happening? Because companies like those selling
insurance are suffering from their own form of ignorage. Many of them haven’t
stopped to realize that the context and needs of their customers has shifted.
If companies helped their clients in this way, do you think the clients would
be enticed by lower prices from competitors?
This
is an excerpt from my forthcoming book Addicted
Customers: How to Get Them Hooked on Your Company. To learn more about
topics like this and the book go to www.AddictedCustomers.com.
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