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Webinar on the shift in measuring customer differentiation from satisfaction to engagement, where customers emotionally connect with the service organization versus simply receive service within preestablished time limits. Source of competition for companies looking to differentiate themselves on other than simply price.
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Strategies for Achieving Customer Engagement
Steven M. CallahanPractice Director
www.renolan.com
The Robert E Nolan Company
The Nolan Company has been specializing in the insurance industry for over 38 years.
Page 2
We assist carriers and solution providers with strategy development, operations / service / profit improvement, and technology effectiveness.
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We Face a Convergence of Trends
Workforce
Sca
le
Service Operations
3
With a New Service Paradigm
§“Customer Satisfaction Doesn’t Count”The emotional connection payoff
…Through extensive research, Gallup has developed a measure of customer engagement (CE11) that quantifies the strength and nature of a customer’s emotional connection to a company. Gallup’s 11-item metric assesses the critically important emotional bonds of Confidence, Integrity, Pride, and Passion that together reflect the true health of any company’s customer relationships. The payoff is a far stronger link to business results than any satisfaction measure can hope to provide. …Gallup has found that without a strong emotional bond, satisfaction is meaningless.
Gallup Management Journal, March 20034
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Making Engagement The Key
§ Expectations for high service being driven from outside the industry
§ The commodity nature of Insurance products
§ Increased competition and current economic challenges putting more pressure on margins and price§ Service is ‘the differentiator’ in our industry for all
manner of customers– End consumer / insured– Distribution channel / agent
And Companies Are Responding
Expanding Accessibility 100%Accelerating Service Delivery 96%Increasing Hours and Days of Service Availability 82%Creating Different Levels of Producer Service 82%
Consolidating Similar Functions Across Divisions 75%
Creating Different Levels of Customer Service 63%Aligning Operations with Customer Markets 63%Consolidation of Call Center Operations 57%
Aligning Operations with Distribution Channel 57%
Consolidating Physical Locations 50%
RespondentsArea of Focus
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Yet The Challenges Grow
§ People– Technology is removing all the easier work– Products are more complex– Substantial impact on front-line, especially call centers– Recruiting needs have changed– Virtual workforce requires new management approaches
§ Process– It is becoming an e-world– Electronic transmission saves mail time
» But processes must be continually streamlined to keep pace
§ Technology– Social Networking– Marketing and sales tools– Communicate with field and dispersed staff
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As Operations Grow More Complex
Mail FaxPhone
Internet
Workflow/BPMC
OMPLEXITy
’60s ’70s ’90s ‘00s ‘10s
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And Diversity Drives Expectations
0
10
20
30
40
50
60
70
80
Milli
ons
GI Swing Boomer Gen X Gen Y
High TechLow Tech
Increasing Customers Demands• Immediacy / 24x7 access• Transparency• Personal service relationships• Language • Driven within and outside the industry
Including Expanding Cultural Markets
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Driving Enhanced Service Strategies
§ Still easier and more economical to keep a customer
§ Yet diversity means different service models by segment
§ But all want product simplicity, modularity, and customization
§ Yet not all customer segments offer the same economic value
§ And distribution is getting more complex and costly
RESULT: Greater sensitivity and variation in profitability
Strategic Implication:
§ Pricing models increase in sophistication and data awareness
§ Operations and Technology must reshape service delivery
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Defined By Each Segment’s Needs
FOCUSCreate an Advantage
FOCUSKeep the business
you have
AVOIDLose existing
business
No Opportunity
NECESSARYPrevent over-
servicing
AVOIDDrives customers
away
Or Table Stakes?Service Differentiator?
An Advantage
No Advantage
A Disadvantage
Define For Each Unique Customer SegmentComparing to Competitors
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Evolving the Service Delivery Model
One Size Fits All
§ Same service for all segments
§ Over invest in some, under invest in others
§ One model to manage
§ Differentiation created at company vs. segment levels
§ Easier to match capabilities
Evolving Model
§ Segmentation of needs and value
§ Service matched to segment needs
§ Appropriate service investment in each segment
§ More challenging model to manage but also …
§ Harder to replicate by the competition
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With Technology Enabling Evolution
From:
To:Phone
Paper
Text
IVR
Internet
Service Delivery Process
Self-Service
ResolutionChat Video
Transfer Dialer
• Technology driven – beyond paper and phone• Main sequence process the same• Tailored service approaches• Challenging to manage
Process = Requestà Process à Resolution
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Common Issues and Challenges
§ Misalignment of service strategy and corporate strategy
§ Focus on technology solution and ignore process
§ Customer service positions viewed as entry level
§ Sales skills requirements are very different than traditional service requirements
§ Customer service training often early casualty of budget cuts
§ Static solutions prevent dynamic changes
§ Failure to revise key metrics to reflect dynamic service environment
“… a modest increase in customer experience will increase customer loyalty
and boost revenues by approximately $298 million for a $10 billion insurance
provider.“Forrester Research, February 17, 2010
“Nationwide Insurance found that a 1% increase
in customer retention increased annual
premiums by $1 million”Insurance Tech. - CRM in Global Insurance, Datamonitor, 2008.
“Reducing customer attrition by 5-10% can
increase annual profits by as much as 75%,
according to a study by the Wharton School.“
Eight Strategies for First Rate Customer Service, Cisco Innovators, January 2008
Why Does It Matter?
Tens of thousands of positive service touchpoints a day, and yet one bad interaction…
And suddenly your company is at the top of the tweets list telling thousands followed quickly by a Facebook “Unlike” Fan Page.
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