In an exclusive interview with Hot Topics, Mark Evans – who prior to joining Direct Line in 2012 spent time with HSBC, 118118 and Mars – discusses the potential use of advanced technologies in marketing and within his own business. While the opportunities are great, Evans also recognizes marketers must be careful not to be seduced by the power of information.
“The advent of digital means everything is more measurable – but that knowledge can be very addictive,” he says. “The peril is you get sucked into that data and lose sight of the fact that the medium is not the message; the message is the message.”
Evans advises his peers to take an agnostic stance. While new technologies, such as artificial intelligence (AI) and machine learning (ML) can be game changers for marketing professionals, they must also be placed within a much wider context.
“I think digital is both the saviour of marketing, in terms of quantitative data, but also a danger, in terms of being off with the digital fairies, and forgetting that TV is, in many cases, still the most effective medium for getting your message across,” he says.
Embracing advanced technology
The key to success, suggests Evans, is to not lean too heavily on the side of technology-led change. Effective digital transformation requires a balance between people and tools. It is an approach he is employing as he grapples with customer-focused change in his own business.
“I think when you’re trying to activate a big brand idea, it is the human and the technological factors that come together – and there’s some amazing and heroic stories of how our front-line staff have helped fix our customers’ problems in their times of need,” says Evans.
He gives the example of Direct Line’s smart crossing initiative. With the help of cameras, a machine learning system and a specially designed road, the firm has used technology to create an adaptive pedestrian crossing. “This is leading-edge, emerging technology,” says Evans referring to the project.
“But what goes alongside that development is the basic human insights about the problem we’re trying to solve and how people cross roads today. That’s about behaviour, psychology and neuroscience. I think, in general, success is about holding the two things together side by side – and it’s the synergy between the two that is critical.”
Evans recognizes some workers will be reticent about the growing use of AI. He refers to research that suggests as many as one in three jobs could be at risk from automation. Evans suggests repetitive tasks could be made obsolete by smart robots, AI and ML.
“We’ve got some evidence of that change, in that we’ve done some sandpit exercises in our pricing function and we’ve found that machine learning models are incredibly effective,” he says. “That trend makes people a bit nervous and it’s evident that AI isn’t a one-way bet for human beings.”
Evans says executives must talk with employees about the evolution in working practices. “Roles are going to evolve and, in some cases, disappear,” he says. “We’re not in that space yet but I think there’s a challenge regarding how you get people comfortable that their roles are going to change. We haven’t figured that out yet and I don’t think anybody has.”
Achieving digital transformation
However, for firms that find a balance between people and tools, the potential power of change is significant. Evans says nascent firms can use advanced technology to create a new slant on IT-enabled operations.
“For purely digital businesses, I think it’s possible to optimize the whole engine; the whole ecosystem,” he says. Such integration is tougher in traditional businesses, with an array of legacy assets and a requirement to bring together online and offline channels, suggests Evans.
“In these instances, there’s a messiness,” he says, before referring to the insurance sector. “The purchase journey for the customer is incredibly complicated and can take weeks. In that case, it’s much harder to get all the different elements to talk to each other.”
Evans believes some vendors are making headway regarding cross-channel integration. However, the flow of data presents an issue. Unless information moves around the business, employees looking to create joined-up experiences for clients face a significant challenge.
“In insurance, we’re all on a journey to be more digital but there are some inherent inflexibilities in our systems and structures,” says Evans. “The journey towards successful digital transformation is likely to be quite a long one.”
The good news is Direct Line is already making progress in customer experience. “We listen to complaints, we do root cause analysis and we have a never-ending snag list,” he says, suggesting the Net Promoter Score (NPS) for Direct Line has increased 15 percent during the past four years.
“We’ve achieved that by listening to our customers and addressing their needs. For example, some of our customers said they were annoyed they paid admin fees when they changed address or profession. Uniquely for the industry, we took that charge away – and then we saw the impact on our NPS.”
Evans suggest customer-focused companies take a multi-layered approach. Direct Line, for example, undertakes traditional segmentation analysis and insight when it launches a new brand or proposition. Yet the firm is also cognisant of broader consumer concerns, particularly when it comes to digitization.
“Insurance is at the confluence of all the current technology trends. That includes blockchain, AI, connected home and driverless cars. Our role is to interpret those technological trends and see how they play out in terms of customer adoption and behaviour,” says Evans.
“Across those various layers, I think we’re pretty in-tune with our customers. But we’d never be arrogant enough to think we’ve cracked it because customer demands are changing all the time.”