Tech Talk: The Real Threat to Agents from Amazon
Amazon may be close to jumping back into insurance, at least in India, with this month’s announcement of a possible investment in an online-only insurance startup. Whether the retailing behemoth is or isn’t, however, is largely irrelevant because its influence on the marketing landscape already presents an existential threat to agents.
The so-called “Amazon effect” extends far beyond its mission to exceed customer expectations and is pushing every business to keep pace with its technological mastery.
As Amazon founder Jeff Bezos has stated many times, “we’re not competitor obsessed, we’re customer obsessed. We start with the customer and we work backward … We’ve had three big ideas at Amazon that we’ve stuck with, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.”
Every agent does his or her best to put the customer first and provide them with the best possible customer experience. What customers expect today, however, is far different from what they would expect even two years ago.
“Amazon absolutely raises our customers’ expectations of all service levels, including those of the independent agent distribution,” said Jay Byrnes, president of Connecticut-based Byrnes Agency and the Agent’s Council for Technology (ACT) steering committee chair.
Byrnes said that Amazon’s ability to use different tools to service customers raises the bar in three specific ways.
- Using artificial intelligence (AI) to understand buying patterns, and bots to steer customers to the answers and information they are looking for. Byrnes said the cost of a bot is reasonable and can be invaluable.
- Driving solutions tailored to each customer. “For agents, that means emphasizing our mission, ability and follow-through to customize policies and not provide a one-size-fits-all-model.”
- Reviews that really engage and sell a product, leading the user to hit the “Add to Cart” button. Byrnes said agents can counteract Amazon by expanding the use of testimonials.
Beyond its “exceeding customer expectations” mission, Amazon’s success stems in part to its willingness to take risks and build a commanding presence in U.S. homes. Forbes reported 64 percent of homes hold an Amazon Prime membership. Big data plays a critical role in understanding consumers, what they want, what they’re willing to pay for, and how they wish to be treated.
Amazon’s acquisition efforts bear watching. Amazon is expanding in non-retail areas, including grocery stores (Whole Foods), cyber security (harvest.ai), gaming (GameSparks) and analytics presentation (Graphiq). These acquisitions are designed to strengthen its retail business and consumer relationships.
Byrnes acknowledged that agents cannot match Amazon’s resources but should take as many doable steps to “achieve some immediate wins.”
“There’s one thing Amazon cannot match and that is our local presence. However, that advantage cannot be maximized fully unless we get into the digital arena as much as possible,” Byrnes said. “It’s hard to do everything at one time, but there many available resources at the associations and outside vendors. The key is not to get discouraged and to keep at it.”