Short answer
When developing insurance products, prioritize the design and communication of value-added services that address customer needs at key touchpoints, such as contract signing and post-accident support, to differentiate from competitors and capture market share.
- Field
- Innovation & Markets
- Source
- Alexandria (UniSG) (University of St.Gallen) (2010)
- Method
- Choice-based conjoint analysis and cluster analysis.
- Evidence
- Strong effect
The inclusion of value-added services, particularly those offered post-accident and during contract initiation, demonstrably influences customer purchasing decisions for insurance products, moving beyond mere price considerations. This innovation & markets research insight is drawn from a 2010 study published in Alexandria (UniSG) (University of St.Gallen). Using Choice-based conjoint analysis and cluster analysis., researchers explored how this design variable affects real-world outcomes. The key design takeaway: When developing insurance products, prioritize the design and communication of value-added services that address customer needs at key touchpoints, such as contract signing and post-accident support, to differentiate from competitors and capture market share.
Value-Added Services Significantly Shift Insurance Purchasing Decisions
The inclusion of value-added services, particularly those offered post-accident and during contract initiation, demonstrably influences customer purchasing decisions for insurance products, moving beyond mere price considerations.
Alexandria (UniSG) (University of St.Gallen) · 2010
Key Findings
- 01Services provided after an accident have a significant influence on purchasing decisions.
- 02Services provided at the time of closing the contract also significantly influence purchasing decisions.
- 03Customer segmentation reveals distinct groups, including price-sensitive customers and those prioritizing value-added services.
Application
Design takeaway
When developing insurance products, prioritize the design and communication of value-added services that address customer needs at key touchpoints, such as contract signing and post-accident support, to differentiate from competitors and capture market share.
How to apply
When designing a new service or product, consider how complementary services can enhance its perceived value and appeal to specific customer segments. Map out the customer journey to identify critical moments where value-added services can have the greatest impact.
Project actions
- 01When researching a product, think about what extra services customers might want.
- 02Consider how these services can be presented to make them seem valuable.
Method & Evidence
Variables
Strengths & Limitations
Strengths
- +Employs a robust methodology (conjoint analysis) to quantify attribute importance.
- +Identifies distinct customer segments, allowing for targeted strategies.
Limitations
The specific value-added services tested might not be relevant to all product types. The perceived value of services can be subjective and vary greatly between individuals.
Reliability & validity
The use of conjoint analysis provides a structured way to assess utility, contributing to internal validity. Reliability would depend on the consistency of participant choices under similar conditions.
Think critically
To what extent does the perceived risk associated with an insurance product influence the importance of value-added services compared to price?
Design Principles
"Customer purchasing decisions are multi-faceted and can be significantly influenced by the perceived value of integrated services, not just the core product's price."
In competitive markets, understanding how intangible service offerings impact consumer choice is crucial for product development and marketing strategies. This insight suggests that insurers can differentiate themselves and attract specific customer segments by strategically bundling services alongside core insurance policies.
What This Means for Your Design
Adding helpful services to an insurance product, like quick help after an accident or easy sign-up, can make customers choose it even if it's a bit more expensive.
How to use in your project
- 1.Reference this study when discussing how to differentiate a product or service in a competitive market.
- 2.Use the findings to justify the inclusion of specific value-added features in your design proposal.
Add to My Project
Quick Cite
Paragraph starter
This research highlights the significant impact of value-added services on consumer purchasing decisions, demonstrating that factors beyond core functionality and price, such as post-purchase support and ease of initial engagement, can be key differentiators in competitive markets. This suggests that for any design project aiming for market success, a comprehensive approach that integrates and effectively communicates complementary services is essential.
Source
Alexandria (UniSG) (University of St.Gallen)
How value added services influence the purchasing decision of insurance products
journal · 2010
View sourceQuestions About This Research
- What does the research say about value-added services significantly shift insurance purchasing decisions?
- When developing insurance products, prioritize the design and communication of value-added services that address customer needs at key touchpoints, such as contract signing and post-accident support, to differentiate from competitors and capture market share. Evidence: Alexandria (UniSG) (University of St.Gallen) (2010).
- Why does "Value-Added Services Significantly Shift Insurance Purchasing Decisions" matter for design?
- In competitive markets, understanding how intangible service offerings impact consumer choice is crucial for product development and marketing strategies. This insight suggests that insurers can differentiate themselves and attract specific customer segments by strategically bundling services alongside core insurance policies.
- How can designers apply this research?
- When developing insurance products, prioritize the design and communication of value-added services that address customer needs at key touchpoints, such as contract signing and post-accident support, to differentiate from competitors and capture market share.
- What were the main findings?
- Services provided after an accident have a significant influence on purchasing decisions.. Services provided at the time of closing the contract also significantly influence purchasing decisions.. Customer segmentation reveals distinct groups, including price-sensitive customers and those prioritizing value-added services.
- What research method was used?
- Choice-based conjoint analysis and cluster analysis..
- How strong is the evidence?
- Evidence strength is rated Strong effect, based on a 2010 journal from Alexandria (UniSG) (University of St.Gallen).
- What should I do differently in my next project?
- When designing a new service or product, consider how complementary services can enhance its perceived value and appeal to specific customer segments. Map out the customer journey to identify critical moments where value-added services can have the greatest impact.
- What are the limitations?
- The study focused on motor insurance, and findings may not generalize to all insurance types. The sample size and demographic representation were not specified.