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in context, customers may believe they are making informed decisions, but in fact may be making decisions based on out-of-date information or faulty premises.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.
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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.
