Consumer understanding – testing on a budget

With Easter fast approaching, firms should be planning their consumer testing – if you haven’t started thinking about this, NOW is the time!

One of the biggest challenges facing firms is the lead times in executing changes, particularly if their findings require them to change their digital sales journeys or make wholesale changes to policy wordings or contract agreements. These changes can take a lot of time and resources to design, build, approve and execute.

It would be hard to argue that consumer testing is not appropriate in the sales journey. So much of Consumer Duty is written towards the themes of information asymmetry – that the seller knows more than the buyer and that consumers are naturally in a weak bargaining position and suffer from inexperience and behavioural biases. Many firms we are speaking to are overlooking the cross-cutting rules to focus on the specific outcomes, but a lot of the clues about what good looks like are listed in the Consumer Duty through repeated themes: information available to consumers at the right time to make an informed decision, complaints root cause analysis, all aspects of the design, terms, marketing and sales.

Where to start your testing?

The sales journey – for those with a big budget, having an expert from an agency to test your platform is an ideal approach. But, for most Insurtech firms, a big budget is not the reality, so how can you re-create these capabilities at a fraction of the price? You can consider the following effective methods of communications testing:

In-house review

An in-house review by a skilled resource should cover:

• Review of your financial promotions, considering terms like “covers most eventualities”
• Key messages and the balance of information presented
• Testing the IPID and policy wording for unfair contract terms and conditions and exclusions, which should be reflected in all messaging
• Review of the structure of the web pages and how information is presented. Looking for issues in the architecture, such as the information in concertina buttons which expand data
• Accessibility testing across mobile and desktop applications

After the in-depth review, a firm can formulate a concise report on its risk areas, current compliance failures and the areas it will need to change to be compliant.

Guerrilla Testing (often known as hallway testing)

This method can seem a bit daunting but can produce great results quickly and cheaply. Let’s assume you have completed your in-house review and now want to validate the information, expand upon it or challenge it.

• Adopt the assistance of an unrelated team, perhaps people you share the building with. Ask if they have 10 mins to spare to help you do some testing of your customer journey in exchange for coffee and cake…
• Provide them with a clear indication of what you wish to achieve. The questions and plan should be thought out in advance
• It is critical to write up your results. If it’s not written down, in the eyes of the FCA – it didn’t happen!

Friends and Family – potentially free…

It’s vital that they are not in the industry so as better to represent the general public. Again, preparation is key to ensuring your tests are useful:

• Be clear about what you want to achieve
• Set parameters and write questionnaires in advance
• Spend time reading up on neutral language and non-judgemental questioning to ensure you have an unbiased question set
• Make the tests repeatable, so you can interview other people in your network

If you are struggling to test vulnerable customers, do some role-play. Assign your colleague a character and ask them to get into character, explaining what they might think or feel in their shoes.

No matter what combination of testing you decide to adopt, you don’t need to spend a fortune – but spending quality time on well-thought-out plans is crucial:

• Catch the technical and critical stuff via your in-house review
• Use Guerrilla testing to help you hone your ideas and iterate quickly
• Use friends and family for in-depth research and deeper dives into customer thinking

Write everything up – if it’s not written down – it didn’t happen!

For further guidance and support, please get in touch.