Question

What strategies have the insurance industry utilized in its attempt to minimize the effects of intangibility? Of the companies that have actively attempted to minimize the effects, have some companies done a better job than others? Please explain.​

Answer 1

Answer:

Intangibility poses a challenge to those marketing a service, as they often need to give tangible proof for the quality of service. Buying services are risky for the customer; hence, providing adequate tangible proof of good service ensures repeat customers.

Answer 2

The strategies that have the insurance industry utilized in its attempt to minimize the effects of intangibility are:

1. Discuss the results they will achieve
2. Discuss how it works
3. Focus on the emotional benefits
4. Share case studies and testimonials
5. Build trust and relationships with your customers

Intangibility:

• It might be challenging to evaluate the quality of a service since it lacks perceptible or tactile qualities.
• "Because services are performances, rather than objects, they cannot be seen, felt, tasted, or touched in the same manner in which products can be sensed," write Zeithaml et al. (1985, p. 33).
• As a result, intangibility has historically been seen as the most important distinction between services and goods in the literature on services marketing.
• The perishability, inseparability, and unpredictability of services are further important features.
• The customers are at the center of the most prosperous businesses of today.
• And the single most crucial factor influencing a customer's loyalty is their experience.
• The State of Connected Customer survey states that 84% of customers believe a company's experience is just as important as its goods or services, but there is a huge gap between what customers anticipate and what most companies actually give.
• Modern insurance businesses operate in a similar manner.
• Customers of insurance for long years perceived insurance as a commodity product they had to buy based on what was readily available.
• A more intelligent consumer with a wide range of demands and wants has emerged as a result of the market becoming saturated over the previous ten years with more insurance products and possibilities.

Positive changes adopted by many insurers in recent years include:

1. Addition of new channels for client communication about claims and policy questions is another excellent development that many insurers have implemented in recent years.
2. Reducing the use of insurance jargon in discussions and papers.
3. Exhibiting hybrid interactions (human and artificial intelligence, physical and virtual, direct and agent-based).
4. Recognize the needs of your target audience

Strategies:

Discuss the results they will achieve:

• Customers may find it challenging to comprehend what they are receiving when they purchase an intangible good or service.

Discuss how it works:

• According to Business.com, one of the reasons consumers are hesitant to purchase intangible goods and services is that they are unsure of how they operate.
• Customers are unsure of what is in an item they purchase when they cannot see, hear, taste, smell, or touch it, and they are also unsure of how it will deliver the desired benefits.
• Businesses must therefore concentrate on communicating a simple and understandable process.

Focus on the emotional benefits:

• Focus on the emotional rewards while attempting to give a service or intangible product life.
• According to Forbes, consumers frequently face numerous difficulties, concerns, and fears on a daily basis.

Share case studies and testimonials:

• According to Green Biz, success stories are a powerful tool for convincing clients that they require the intangible good or service.
• Utilize case studies and customer feedback to help establish social proof.
• Before they invest their money, customers demand proof that your intangible service is effective.
• You can allay any worries and mistrust by demonstrating this point with outcomes that other clients have obtained.

Build trust and relationships with your customers

• A service or intangible product can be given life by assisting customers in humanizing your company.
• They can develop relationships with personnel and management and learn more about what you do rather than just seeing you as a business entity.
• This connection contributes to the development of confidence in the company.
• Businesses can take the time to completely grasp the needs of new prospects, walk them through the process, show them case studies or testimonials, and respond to any questions they may have.

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