This article was originally published by William Trump, Consumer Behavior Consultant at Swiss Re, on LinkedIn and has been republished here with permission.
On a recent train ride to Norwich for a meeting with colleagues pre-lockdown, I heard the following announcement: first class accommodation can be found towards the front of the train. The word "accommodation" confused me. I'm not looking to live on the train, or even sleep on it – I just want to get to Norwich.
This is just one of the many examples I come across, where a company or industry starts to use a term that makes sense to them, but not to their users. Sure, most of the time we can work it out – accommodation must mean train carriages – but why create the confusion in the first place?
The problem is, our own industry, insurance, is not very good at this either.
If I asked you what insurance words might confuse customers, you'd probably have a few suggestions for me. The usual suspects I come across are: annuity, moratorium, deductible, etc.
But I worry that even some of our frequently used terms may be causing confusion.
To investigate this, we partnered with Feedback Loop'srapid consumer feedback platform to survey 350 members of the UK general population and, crucially, our customers. We started with the very basics and asked people to describe things in their own words. We explored four different areas - with surprising results
First off, we simply described a type of insurance that pays out to your loved ones if you die and asked people what they would call this. Perhaps surprisingly, "Life Cover" was only selected by 14%. The more traditional "Life insurance" came out overwhelmingly on top, chosen by over 8 out of 10 people. This should cause us to re-think, because I've seen many marketing headlines in the industry lead with "Life Cover for just £x/months". When we stop and think about it from the point of view of a customer, it makes sense. "Life Cover" is a somewhat nebulous concept: covered for what? What does it mean for my life to be covered?
By the way, the third option, "Protection", was chosen by just 3% of people. I assume these respondents work in the insurance industry.
Secondly, when someone takes out life insurance – what exactly are they buying: a plan, a policy or a product? Their preferred name: a policy – chosen again by 8 out of 10 respondents. Not a plan (only chosen by 15%) and definitely not a product (4%). And yet, what do we as an industry often call this in our scripts, or letters: plans (sometimes even "products"). Once again, this makes sense. What might people intuitively associate with the word "plan": a plan to go on holiday, building plans, a savings plan...
Next, we asked people to think about the amount of money their loved ones would received if they passed away – what would they call this? Sum insured, cover amount, benefit amount? No – their preferred term is: pay-out. This subtly, but significantly alters the way we should be framing our message. When we think of it, "cover amount" could be quite a confusing term (am I covered up to that amount, or for the full amount?) – no such confusion exists with the word pay-out.
Finally – and perhaps my favorite – we asked people about what it means when someone no longer wants their life insurance and intends to stop making their regular payments. Would the industry's go-to word, "lapse", be the natural word people associate with this? No – only 1 in 10 chose that. Two thirds simply described it as "cancelling" the policy – the rest called it "ending" the policy. This is not unique to the UK –recent user testing in the US found that customers also found the word "lapse" confusing. This shouldn't surprise us. What do people normally associate with "lapse": lapse of concentration, lapse of time, lapsed vegetarian…
Now you may think we are just quibbling over a few words here. But at iptiQ we can prove these things really matter. We've run a series of trials that show that getting your wording right not only makes things clearer for customers and gets better feedback, it also achieves better business results. In some cases, using the right words can lead to a three-fold increase in response rates. Put simply, people do not buy (or keep) things they do not understand.
I’d love to hear from you - do let me know what other insurance words may be causing confusion to our customers!
For now, though, I must go – I think my train is about to arrive and I don't want to end up in the wrong accommodation.
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