Trust and Loyalty in a Cost-of-Living Crisis, with Piers Watson

Episode 80

Piers Watson, Head of Customer Experience at NFU Mutual, shares his pyramid for achieving CX excellence, with a focus on 'doing things right' before 'doing the right thing.'

In a time of economic recession and hardship, this has become an even greater task, and customer relationships are suffering from issues of trust and loyalty going askew. But in our latest podcast, Piers explores how to restore and uphold the foundations of great CX.

Episode 80


Episode Summary

Doing things right

The CX pyramid's first level regards the basics. Transactional excellence comes from ensuring that all elements of the product or service's foundations are as good as can be. These elements include simplicity, clarity, speed and ease - alongside wider concepts like accessibility, availability, and the level to which the product enables or empowers your customers whilst delivering your promises. Such tangible, fundamental aspects must first be prioritised within a company's value offering to ensure the rest holds up.

Doing the right thing

The "rest" being the final two levels of the CX pyramid. Firstly, relationships. Once the foundations of a successful product or service have been established, the focus turns to the customer themselves. To maximise satisfaction, relationships should aim to be empathetic, collaborative, relevant, personal and appropriate.

Secondly, the pyramid is topped by the brand and its social purpose. This layer focuses on the company's role in a wider community and society, suggesting that everything else comes before. In other words, the basics must first be mastered before the customer experience can be elevated to truly meaningful and memorable heights.

To find out more and discover how the CX pyramid can be applied to help customers in times of economic need, check out the full episode with Piers - available on all your favorite channels. Now including YouTube!


This article summarises podcast episode 80 "Trust and Loyalty in a Cost-of-Living Crisis" recorded by CX Insider. For more information, listen to the episode, or contact Piers on his LinkedIn profile.

Written by Marcell Debreceni



Full Episode Transcript

Piers: Customers are looking now to pull back on potentially spending, you know, luxury items going out for dinner. Some of those things that actually you would like to do. So they're cutting back on some of those. And we all know clearly that customers are cutting back on energy and all of those things. So that means that they are becoming more price sensitive.

Marcell: Hi everyone, and welcome back to another episode of CX Insider. Today we talk to Piers Watson, Head of Customer Experience at NFU Mutual, known for their positive ratings, being named Which? Insurance Brand of the Year 2022. In other words, Piers knows his stuff. In this episode, we explore the elements of trust and loyalty in customer experience, specifically in the time of a cost of living crisis. And we take a look at how this is affecting the insurance industry. Now, enjoy the episode, and if you do, why not subscribe to our YouTube channel for access to the best content that CX Insider Podcast has to offer? By the way, this podcast is brought to you by ACF Technologies: Global Leaders in Customer Experience Management Solutions.

Valentina: Hi, Piers, and thank you very much for coming on our podcast.

Piers: Welcome. Thank you.

Valentina: So we always start with an introduction. Would you like to tell us a bit about yourself and what you do?

Piers: Yes. So I'm the Head of Customer Experience at NFU Mutual. NFU Mutual is an insurer, general insurance provider and as well as financial services as well. And with a heartland being in the farm and rural sector. And we offer products and services across insurance as well as safe financial services as well. And my role at NFU Mutual really is, is to orchestrate customer experience, right from setting that target state customer experience and driving what good looks like in the organization and driving that through to change programmes and local change. But then also really keeping an eye on what the customer is telling us so we can then identify whether there are issues or challenges that we need to fix and then making sure that that's actioned in the business. And when I joined, my challenge was, well, actually customers really do like NFU Mutual, where we're a well-known brand and we've got awards with which for example. So my challenge was not to break anything basically and come in and make sure we're maintaining that high level of customer experience as we go forward.

Alex: You mentioned you had a pyramid for creating great customer experience. Will you tell us a bit about that and what it involves?

Piers: Yeah, absolutely. This, this pyramid does sort of be really built on over the last few years in terms of my knowledge and experience of customer experience. And it is really in its entirety, everything you need to consider when considering customer experience that that first level is all about doing things right. It's getting the basics right in whatever you do in terms of your products and services, it's and it's about the transactions. So it's about making sure that when a customer engages with you, it's simple, easy, fast, and clear, and that your staff and your frontline teams are empowered to be able to deliver the service that customers are expecting of that. And that's the basics. But it's more than just that. And a lot of customer experience professionals obviously focus on that transactional layer with digital particularly. But building on that now it's around relationships. So it's that personal touch. How can you be more relevant to that customer? How can you understand their needs in their moment, in that particular moment of truth for that customer and, and build out that sense of understanding and awareness? And that's really important and I'll come on to that later on. And then the final top piece of the pyramid is that broader piece in the community. So what role do you play? What's your purpose in the community and making sure that customers understand that so that they are attuned to what your brand really wants to deliver? And also, it's going beyond that transactional relationships. It's trying to be there before the customer needs you. So what can you do to actually help in terms of insurance prevent risks from happening? How can you guide customers and give them advice and guidance and also reward them for their loyalty? So that is everything in the entirety of customer experience in my mind.

Valentina: So let's dive into today's topic how to do things right and how to do the right thing and the cost of living crisis because customers don't give second chances in a crisis. And how do you think that the cost of living crisis in which we are right now, impacts the customer behavior?

Piers: We've seen from our research that customers certainly in the last quarter are definitely more concerned about generally the cost of living and what that has in terms of their purchase decisions. And we're seeing that concern that's greater than in in the second quarter of the year. And what that means is that customers are looking now to pull back on potentially spending, you know, luxury items going out for dinner. Some of those things that actually you would like to do. So they're cutting back on some of those. And we all know clearly that customers are cutting back on energy and all of those things. So that means that they are becoming more price sensitive. And you can see from the Institute of Customer Service, the U.K. Customer Satisfaction Index, that when they ask customers what was the most important thing they were going to consider in the next two years when engaging with a product and service provider, it was absolutely price that was top of the list. So it is absolutely driving behavior. But I think the important point to note in that study, it also said that customers are not just about price, it's about service excellence. And there's around 35% of customers would definitely pay more for a service that they believe is really providing that excellent service. And that's more than the 12% at the bottom are just purely about price. So I think that's the key point here, is that it's price. Yes. But actually, they're going to consider the service they're going to get. And I think the fundamental point for me is the second, more important thing that customers are now going to be considering is whether they trust that organization. And trust really is at the heart of this. If you've not built that reputation for a trusted brand, if the customers that talk about you don't really trust what you do, you're really going to struggle no matter what your price position is, to be able to attract that customer and retain them too. That's absolutely key.

Valentina: That's super interesting. How can you build reputation in crisis if you haven't built that before?

Piers: It's about customers do talk, you know, and if you've not built that reputation before, then it really is around the delivery of that service and it comes back to that pyramid again. It's around doing the basics well. It's about making sure that customers are can access what you want, and it's easy and simple to deal with you, but also that they can talk about you because you're there when it matters. And those sorts of things are if you've not been broadly advertising it, those are the things that your customers will talk about. And then therefore those new customers that will come forward be aware of what you're about.

Marcell: In times of economic crisis, customers are indeed more price sensitive, but this doesn't mean they are always only looking for the cheapest option because trust creates loyalty, and loyalty brings continued custom. But how does this element of trust play out in the insurance industry?

Piers: Insurers, historically and still to some degree now, haven't really been in trusted insurance. You know, insurance has not been a trusted industry, and at some point, it was almost like insurers were less trusted than banks. And the reason for that, and to be brutally honest, is because when you're buying an insurance policy, you're buying effectively a 50 to 60-page document. That's what your product is. And you've got to understand, or what am I covered for? So it's traditionally been quite difficult to understand what you're buying and therefore there's already that. Well, do I trust that they're going to pay out when I make a claim? But we've been working the insurance industry has been working really closely with the Financial Conduct Authority, the FCA, over the last few years, and it has been building out improvements to how we explain to customers more about their product to make sure that it's simple to understand, but also about price and making it clear what you paid last year and therefore what you're paying now and make it easier to understand. And so, therefore, I think the reason why it depends is it depends on how good that organization is breaking down the barriers to explain to that customer everything and making sure that the customer fully understands what they're buying and why.

Alex: What kind of pressure does this place on the customer experience that the company delivers and what kind of challenges?

Piers: Absolutely. I would say there are three things to consider here. One is around just getting the basics right again. The second is finding opportunities to really do what the customer doesn't expect in a positive way, to find ways to delight that customer. And I think the third point is to have your eyes and ears open in terms of understanding what the customer is telling you about their experience. And that's really important in these times. So from a customer experience perspective, all of those things matter. So on sort of getting the basics right, customers want to make sure that their hard-earned pounds that they're going to be what they see is what they get. It's that on-sale moment, isn't it? And that's really important. So, you know, third in that survey amount of the most important things that our customers will consider is ease and simplicity. So absolutely, if you're going to be offering a service, particularly in these times of customer experience, it's all about making sure that you're taking out those friction points and making things easier and simple to deal with. And that's the basics. Then if it's about, well, actually, how can you go over and above and do something to impress that customer and, and insurance? That's, for example, where you have big storm events and you are actually going there to visit the customer and making sure that you're helping them get back on their feet.

Piers: It's also about prevention and being, you know, how can we provide, for example, kits to help customers make their homes more protective and I suppose prevent flood risk and minimize flood risk, for example, if that happens. So there are a number of things you can do to actually just go over and above. And as I say, the final point is it's about. Making sure that you're really picking up on those signals that the customer is telling you. And you can do that through your normal channels, through training staff to pick up on signals, through telephone, but also face to face as well. But through the voice of customer programs, it's being really clear on actually the sentiment that customers are giving you at that particular point. And it comes back to that pyramid again around, well, actually, what is the service you are aiming for, that transactional actions, excellence, that relationship level? Are customers telling you that, yes, you're simple to deal with, you're easy? Easy to deal with it fast? Are they saying that that that staff member I spoke to was really personable and they understood my needs and they understood the situation I was in? So being able to pick them up on that, and if you're not seeing that or if you're seeing signals to the detriment, then you can actually target activity in the business to address that particular need.

Marcell: Piers mentioned the idea of reducing friction. Now, this can often arise with the introduction of digital channels, streamlining the customer experience to be as straightforward as possible, though when it comes to insurance, does face-to-face still have a place?

Piers: The digital channel is let's not let's be clear, absolutely critical, particularly as customers want to engage with you and get on with task in a time when they want to, how they want to and where there are tasks that effectively it's easier to get on and do that digitally. That's really important, particularly with customers and insurance. It's that time of need and that's where you need to have that personal touch. So let me give you an example. Let's say, for example, you've had you want to make a claim and you've got a simple windscreen claim that's quite straightforward. It's not really a motive. You just want to get it done simply. You just want to be able to process that quickly. And digital is good for that. But let's say you've had a car accident or someone's burgled your home or you've had a fire, then actually obviously it's a much more of an emotional, emotional event and event that makes you more vulnerable. And that's really the point at which speaking to a human is going to be really important.

Piers: And that's where staff can really help and put themselves in their customer's shoes, guide them through a process, holding all of those things that are critical and the customer is expecting. But once that customer has been through that process and actually they're back on their feet, then then you can go back to self-serve. So it really is about responding to that customer in the time of need and using those particular channels and you know, NFU Mutual we've got the benefit of having a network of nearly 300 agents around the country that are close to our customers. They're there in those local communities. They understand actually the context that the customers are in. They understand what's happening locally so that real, local and personal touch is really important. And therefore, from a face-to-face perspective, having that dialogue with the agent really helps that relationship. And it's very powerful when it comes to choosing a service for the customer because nowadays you can there are all these comparison sites where through them you can choose a service provider or insurance provider.

Alex: How do you think personalisation when it comes to face-to-face at that touch point at the beginning?

Piers: Well, it's a good question. You know, again, coming back to that trust point and how you trust what you're buying. Being able to choose a product or service and particularly insurance on a price comparison site. It can be made quite simple and you can see all the prices. But you know, clearly, clearly. Do you understand actually, are you covered for what you're really expecting to be covered for? And there's always that from my previous research. There's always that level of doubt potentially that I think I've bought the right thing. But am I covered? You know, so so that point, I think it's important if it goes straight through, but particularly with where it where the product is more complex or maybe you've got a more unique need, like you've got a house with a thatched roof, for example, having that conversation with someone just really helps you get over that trust barrier. And the other point that I think is really interesting and what I found over the last few years is that the trust issue, it's not just about trust in the provider, but it's trust in yourself as well as a customer. It's actually done I actually trust that I understand what I'm buying. And therefore, if an organisation can help a customer, and put them in a position where they're more confident about what they're purchasing, then that really does help that. And again, you know, digital has a role, but also that personal touch through, through that telephone or face to face, really make sure that the customer is confident about what they're doing.

Alex: What elements do you think make up or can create that trusted relationship?

Piers: Well, I think and when I talk about trust and think about trust, I go back to probably what is quite a cheesy example, but I'm not going to apologise for that. It's that classic 1980s team-building exercise where you're standing on a table or something and you need to fall back into some group of people's hands and you think, Well, let's think about that. You know, you've got to trust that if you're going to do it, you've got to trust what's going to happen. So that first level, it's thinking, well, actually, are those people able, strong enough, dependable, reliable that they're going to catch me if I fall? And those elements, those points around, dependable, being reliable, transparent. Can I see that there is a sort of foundation of trust? And we know that actually, that's half of the battle. If you can get that sense of being your customer and knows that you're dependable, reliable, etc., that's really important. And then the second piece is, well, actually, do I think they're going to want to catch me when when I fall? Actually, Do they care about me? Do they care about what I'm interested in? Do they care about what I'm about to do? And that, again, is that second layer in terms of, you know, that they're going to be there for me. They care for me. They care about what I want to achieve. And that relationship piece is really important. And then really the final piece is that whole context. Do I believe that they're buying into this whole thing of trust? You know, am I are they there to realise that actually this whole thing is around trust and therefore, you know, then again it comes down to brand purpose? What's that brand doing? Do I believe in that purpose? Do I believe that actually they, their interests are similar to mine? Those, those things are really important. It's very important for that trust to be established with a customer at your front line. The people that speak to the customer, need to have that reassuring kind of, let's say, relationship with the customer. How do you, let's say, convince or make someone be that trusted person for the customer? It's really about tuning into, again, what that customer is going through at that point of need. Again, it's giving that claim example if actually someone on the phone and they just want to get something done and it's efficient, then it's about adapting what you're doing. What you don't want is our front-line teams that are just going through the same script and exactly the same process no matter what customer's going on. You know, I imagine if you all, just want to get something done, but you have to go through the same process. Obviously, there are legal things you have to go through, but it's about adapting how you engage with that customer and therefore being more flexible. And that's what you need to train staff to do. So training to it, to listen and show empathy and caring and understanding those things are critically important to make sure that again, the customer then feels that they're listened to. And there's there are many techniques that are known around and how you can train staff to do.

Marcell: Now, it could be said that we're living in a volatile time and insurance is a volatile industry. Therefore, customer loyalty must play a crucial role. But insurers looking to uphold exceptional customer experience. Yet just how important is loyalty amidst such volatility so useful?

Piers: I mean, we all know that the classic, you know, costs less to keep a customer than it does to acquire a new one. But particularly in these times, we know that loyal customers tend to be more than they are advocates of your brand. And therefore, you know, they're going to promote yourselves to other customers, their friends and family, and therefore you're attracting that pool. But also, they are potentially more likely to buy more with you. And that's really important from a from loyalty means that they not only will stay longer, but they're potentially going to buy more from you. And also, which it's interesting is that coming back to that trust point because they know you, they actually are quite often can go for self-service that direct contact and using digital more because they feel that they know the brand they know you really well and so loyal customers get to know you and therefore it's actually from a provider point of view, there's a more cost-effective way in dealing with those customers. And actually, they can be more forgiving with potentially smaller small mistakes. And what we know from research is that there's a real correlation between customers that trust you again and loyalty.

Piers: And actually, in the research that I mentioned, the Institute of Customer Service, if a customer scores you nine out of ten or ten out of ten for trust, I think it's around 87% of those customers are likely to stay with you longer. So again, it comes back to that theme of trust that if a customer trusts you, then they're more likely to be loyal. And the. So what of that, therefore, is that you're going to get customers to say that are going to themselves do more with you, but absolutely tell others about it as well. Are there any methods that you can measure trust or how do you know that you've built that trust in the customer? It's a good question. The easiest way and most direct way is to ask that question. And you can do that through your voice-to-customer program or through ad hoc surveys. So you're literally asking that question, you know, rating you out of ten or five, you know, ten being up. I absolutely trust you most trusted and don't trust you at all being on the other scale and you can ask that question directly. But also if you don't have that question again, it's about picking up on those key themes that are talked about before.

Piers: So it's listening to what customers are saying, whether that's through your surveys and voice of customers or through telephone conversations and recordings, you know, our customers telling you that you're being simple or that it's difficult for you to deal with you. Are they telling you that? Yeah, actually, they listen to me. They understood my personal situation. You know, they relate it to me. Are we picking up things like that or not or actually, you know, they didn't understand me. It was very they put me through a process that didn't work for me. And also, you know, actually, are we picking up signals about. Yeah, I really like the brand. This is a brand that I really buy into and then want to pick up on. So if you're not asking that direct question, you can absolutely find those signals to see whether is a customer. Are there signals that are saying, actually, yes, they trust you or are they actually saying, well, actually there are some things in there that could undermine trust, which goes back to some of those fundamentals around what drives trust in the first place?

Valentina: I have a personal question. Do you have experience, where your trust in a brand was, was broken?

Piers: Well, yes, Actually, what comes to mind I won't mention the brand, but we all know, particularly now when people are starting to think about holidays for next year and you get this dynamic pricing where you've been looking at maybe a holiday rental or a hotel or something like that and you've been looking at for a while and you're hesitating a bit and then you come back to it and you start to see that price going up, you know, and you think, hold on a minute, you know, you're just doing that because you know that your cookies in my phone or whatever. And it comes down again to that transparency about price. It's that basic level of can I rely on you are you dependable? So those are some of the things where you think, well, actually I really don't trust you now because I feel that actually, you're not giving me what I would normally expect in terms of that level of service. Mm-hmm.

Valentina: Mm-hmm. Yeah, I noticed with airlines. With airlines, you need to book very quickly and better. Don't look twice. Otherwise. Otherwise, the price is what it really puts.

Piers: It makes them almost be gamifying it for the customer. And the customer then has to find ways around it, you know, and that already creates that mistrust. And you think, well actually what's going to happen next? And we've had obviously all the challenges post COVID around cancellations and things, you know, so it's about to do I understand what are they going to deliver, what I'm expecting them to deliver. And if they're dependable and reliable, then that's great. But if you think I'm not sure, actually, I'm not sure whether it's going to happen for me. Even if you've paid the price, then you're saying, well, it doesn't build that level of trust. And actually then coming back to our cost of living crisis, if you then see another or a competitor and actually they're offering a better price, you may switch to them. Whereas actually if you really trust that brand and they're absolutely dependable, you going, Well, I'm not going to go with. I trust this brand. I know what they're for. And that's the key point, I suppose.

Alex: Another question is when it comes to insurance because it's a bit of a faceless kind of service in the terms that it's not like a retailer where you buy, you like the style and all that things. There's a big pool of customers that you don't interact with. They just pay the monthly fee. And they don't need any cover. Or nothing happens to them. And they just... So you don't have any interaction with them. How do you know of those customers?

Piers: You know, it depends again, on your customer base and the types of products and services you have. But you can have the situation. And I've seen surveys before in my career where customers are giving you that classic Net Promoter score scale, they're giving you a five out of ten. And the reason why they're giving you five out of ten is they just are that shrug of the shoulders. I don't have a relationship with you, so I don't know how to rate you. And that is a challenge. And what it is, is making sure that you can provide value-adding interactions where it supports the customer. What you don't want to be doing is trying to overtly contact the customer when they just want you to get out of the way and buy those value-added things. Now is, you know, particularly in insurance, you can use data a lot more to give customers information about crime in their area, for example, or weather patterns and almost contact customers, give them more information ahead. And there are a lot more services built in now that you can do with farming, for example, that gives farmers more information upfront so you can create that dialogue that allows you to have that relationship. But it's got to be on the customer's terms and value-adding for the customer as well.

Valentina: Cool. Yeah, great.

Marcell: Thank you for listening. We hope you enjoyed the episode. Why not subscribe to our YouTube channel for access to full-length videos, clips of chapters, and also YouTube shorts for our best moments? If you want to join our growing community of thought leaders, head over to LinkedIn and follow us at CX Insider Podcast to stay updated. Thanks again and I'll see you in two weeks. But for now, enjoy our rapid-fire questions. By the way, this podcast has been brought to you by ACF Technologies: Global Leaders in Customer Experience Management Solutions.

Valentina: We have a couple of rapid-fire questions, if you're okay with that. Yeah. So my first one is, what's your favorite childhood TV show?

Piers: Oh, good question. I think I quite like Canberra. Red. Green, actually. That's quite a funny one.

Valentina: If you were on a deserted island with nothing, what would you do?

Piers: I think for me, I love... I'm very interested in nature. So wildlife and biodiversity, I would be, you know, there's so much you can see in insect life, birds, animals, etc. So I'd be fascinated about that. They can tell plenty of stories. Plenty of days. Yeah.

Valentina: Okay, Interesting. I would probably start crying if someone were to play you in a movie. Who would you want it to be?

Piers: So. Oh, my. Good, good. That's a very good question. I don't know. I'd have to think about that one.

Valentina: That's fine. I'll skip to another one. What's the most underrated customer experience tool or technology and why?

Piers: I would say what comes to my head straight away at first is probably the phone. And because again, we know that digital could do a great job, but it is about that ability to speak to someone and to have someone showing their empathy and particularly through COVID times, etc. it's really important to that personal touch again. So yeah, underrated is probably the phone call.