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.
2
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
5
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
6
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
7
As Operations Grow More Complex
Mail FaxPhone
Internet
Workflow/BPMC
OMPLEXITy
’60s ’70s ’90s ‘00s ‘10s
8
9
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
10
11
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
12
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
13
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
14
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
15
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.
16
Recommended
