AI’s true potential lies in disrupting the Australian market by enabling unique customer experiences, according to Lachlan Davidson, GM of Customer Strategy & Performance at Bupa. Davidson also emphasises that AI must be leveraged to enhance ‘signature moments’, not just basic services.
Michael Gwilliam from CXFocus recently caught up with Lachlan at Ashton Media’s CX Retreat, to discuss AI and other key trends shaping customer experience in the next 12 – 18 months.
Michael Gwilliam (MG): Hi Lachlan, thanks for taking the time to be interviewed today. To start with – beyond the hype of Generative AI, what do you see as the single most significant, yet underestimated CX trend poised to fundamentally disrupt the Australian or international market over the next 12 to 18 months?
Lachlan Davidson (LD): I think in terms of the big predictions and trends, the current level of experimentation with AI allows brands to achieve so much. The low-hanging fruit seems to be finding insights and improving experiences to the level that customers might expect. While that’s great, it ultimately creates a set of experiences across companies that feel pretty similar and pretty frictionless. That sounds good, but it doesn’t give customers a unique reason to remember your organisation.”
So, I hope that over the next 12 to 20 months, we see an interesting trend emerge where brands don’t just use AI for that lowest common denominator work—though they should certainly do that to ensure a fantastic basic experience. The real power comes from brands applying AI to find some of those signature moments that give the customer a specific reason to choose your brand over a competitor’s. For me, that’s where the actual power comes in.
MG: I love that. Is Bupa actively pursuing these signature moments right now?
LD: We are, to a certain extent. When we look for use cases in customer experience, one trap we’ve been careful to avoid is creating a separate bucket labeled ‘AI use cases’—as in, ‘Here’s what we’re using AI to solve.’ That approach likely gets the numerator and denominator wrong, if you think of it that way.”
I much prefer to frame it as: What are the experience challenges we have, and then what are the ways we can resolve them? Some of those resolutions might involve the application of AI. For Bupa, I think the biggest challenge we’re tackling is connecting experiences between our various businesses.
Bupa is known in Australia for providing health insurance, and we also offer a wide array of direct healthcare services. We still have a huge opportunity to use the context a customer gives us through a treatment or provider relationship to understand if they are on the right health insurance product.
As an example, if we see a customer receiving a lot of specific dental work, are they on a product that adequately supports them from an insurance perspective? These are the kinds of things we are focused on from a product fit perspective.
From an experience point of view, the major goal we are pushing towards is finding that personalised version of health for each customer. As I mentioned recently, the pathway we are on involves building out a health profile on each individual—with their permission and by earning their trust—so that their health journey can become much more predictive and preventative”.
MG: Given the highly sensitive information Bupa handles, do you face challenges in transferring insights and learnings from one part of the business and applying them successfully to another, even when it benefits the customer?
LD: We operate in a highly regulated industry and for good reason as it’s people’s health information and data. Consider Bupa’s Health Services, particularly our dental business as an example. Even though Bupa owns it, that dental business has relationships with every health insurer in the industry, and its customers could be insured by anyone—or no one.
When considering the sensitivity of information flowing between organisations, we must be acutely sensitive from a commercial standpoint. We must also, of course, be sensitive from a customer perspective. Therefore, our solution is a ‘free and willing value exchange.’ From a customer’s point of view, this means being very open: ‘Here is an opportunity to do something different. Here is what it, and here is what we will give you in return.’
While ‘value exchange’ is a common catchphrase in CX, it is a tried and tested principle that we must remain absolutely committed to.
There’s a lack of understanding around how health insurance operates in the Australian market, particularly compared to other insurance categories – we are not risk-rated.
In car insurance, for example, people understand that factors like where they live or the type of car they drive influence their premium. In health insurance, we do not discriminate. We have a beautiful system that provides equal access from an insurance perspective, but many people don’t realise this. This creates a data-sharing challenge.
Consumers often think: ‘If I give you more data about my health, especially if I have an underlying condition, are you going to use that against me to make my coverage more expensive?’ The clear answer is no.
Therefore, when we discuss ‘value exchange,’ our crucial first step is a major education job to help people understand this core principle. Health insurers have been grappling with this educational gap for consumers for a long time, with different insurers attempting to resolve it at various points.
MG: Many CX leaders struggle to translate customer insights into tangible business metrics or ROI. Do you employ a specific key framework or methodology at Bupa that effectively bridges this gap?
LD: We do. We’ve done quite a bit of work on what we term NPS Economics—a non-creative but very descriptive name. Essentially, we map our customer experience data against our customer segments: promoters, passives, and detractors.
We then cross-reference this with the financial drivers of success for our business. Examples include how long the customer stays with us and whether the product they hold is a high-revenue or high-margin product. By mapping this data across the three NPS groups, we’ve clearly seen that promoters are much more likely to hold products that are high value not only for them but also for Bupa.
This reinforces the principle of value exchange we discussed earlier. If a customer is willing to invest more and buys into a proposition that’s genuinely great for their health, they should receive fantastic value in return. We are rewarded with that value back because they have selected a product and committed to a long-term relationship that is commercially sustainable.
MG: Do you feel there’s an overemphasis on technology, like AI, diverting attention from the foundational challenges of employee experience and securing cultural buy-in from the C-suite?“
LD: Look, I think it’s both. I don’t think we have the luxury of swinging too hard one way or the other. There will always be the ‘next big thing’ people need to be thinking about, and AI is a really, really big one. When we think about generational changes, I think we all believe this will be one of the big moments for every industry and every individual around the world.
However, that focus has to come back to the ‘so what?’ If you focus heavily on saying, ‘Here’s the technology solution we have to improve experience, or improve revenue,’ or whatever metric you’re trying to move, ultimately, it’s the people within the business and how they think about deploying that that will be the difference.