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Chordiant is now part of Pegasystems. We invite you to join the Pegasystems community. Registration is complimentary. Join today to share best practices in BPM and engage with business professionals who are driving change in their organizations.
Following my earlier blog entry on retention, I’d like to look more closely at issues that independent agents are facing to achieve personal growth objectives while meeting insurance carrier requirements.
We all know that insurance agents are a very valuable resource for insurance carriers. In many cases, they support 40% to 60% (if not more) of existing sales and servicing activities. However, there are a lot of variables in play: the current market shift, reduced top lines, increased operating costs (e.g.: 2009 represented the highest commission costs for the top 10 US insurers; estimated at 38% of operating costs, this was an increase from 29% 20 years ago), and changes in customer interaction dynamics and buying patterns. Fresh innovation needs to be considered to drive new top-line growth and enhance an agent’s ability to communicate with end-consumers. The result will be targeted revenue increases and cost efficiencies, while at the same time a delivery of the best combination of channel, product, price and servicing for each customer.
Many agents feel that they are supported in a sub-optimal way by insurance carriers. They feel challenged to drive consistent revenue increases by tapping into consumer needs, optimizing offers and recommendation selection, while at the same time developing trustful customer relationships. It is why many of them focus on the short term — and unsustainable — strategy of moving consumers from insurer to insurer to drive one-off commission incentives.
Insurers need to find ways to support their agent networks: help them multi-equip, advise and service each and every customer in an optimal way. They need to do this while minimizing agency costs, and driving customer satisfaction, loyalty and advocacy.
I believe there are seven criteria that can drive successful results for both insurers and their independent agents:
Chordiant can assist with all of this. Stay tuned for my next few blog posts where I’ll dive deeper into each of these seven criteria.
— Sabine VanderLinden, Director, Worldwide Insurance
We’ve all read about the New Normal that was ushered in when the economy hit the skids last year: as consumers tightened their belts and we all slowed spending, a ripple moved outward which affected business spending and investments across nearly every industry. Wallet share decreased.
Operational costs for businesses increased. The credit crunch hit hard. The ripple effect of this new normal manifests itself in many other ways beyond spending, evident in the way consumers perceive and interact with the businesses that service them. Consumers have begun to scrutinize the companies they work with more closely. Once expected of consumer gadgets only, consumers have come to expect lightning-fast product cycles and fresh feature sets across any company or industry. This evolution has led to a new Darwinian customer: one that brand hops readily, is a hyper-discriminating shopper, relies heavily on self-service and often has less personal interaction with companies. What does this mean for today’s companies that are trying to be customer-centric and provide a customer experience that is optimized for both the consumer and the business?
I’ll follow up with future posts that provide step by step best practices that explain how best to implement the recommendations listed above.
— Ray Gerber, SVP and CTO
Insurance & Technology recently reported that an IVANS’ Carrier Survey report found that property/casualty insurers’ business objectives are driving IT investment in projects supporting customer retention and lifecycle management, regulatory compliance and operational transformation. Looking more closely into the report, I found that the executive summary suggested that “staying ahead of the competition and maintaining market share have made customer retention and lifecycle management a business imperative for protecting carrier revenue.”
The report goes on to state that insurance carriers are investing resources to better respond to the needs of their customers to drive better satisfaction and relationships. Investment responses include web portals and websites directed at the customers and the agents that support them to improve policyholders’ overall servicing experience. A key requirement to turn those projects into successes includes accessibility to the right data and upgrading insurance carriers’ legacy infrastructure.
Chordiant’s customers are at the front of the insurance industry, taking advantage of truly integrated solutions able to drive targeted customer experience strategies. At the same time these solutions access the right data in real-time to facilitate dynamic portal and web interactions whilst preserving legacy environment. A great example was published by Robert Regis Hyle in “Who’s There? Customer Service Steps to Forefront” last December in TechDecisions for Insurance.
We understand that customer retention, development and risk management are all intertwined and have a ripple effect that customer experience management solutions should address.
But in particular, customer retention is top of mind for many of our insurance customers. The IVANS’ report points out and being able to reduce attrition even by 1% could mean millions in protected revenues. There are a few best practices that P&C insurers should consider immediately to ensure this critical area is working to a company’s advantage.
These include:
The results are clear:
— Sabine VanderLinden, Director, Worldwide Insurance Solutions
Being a former defensive football player, I had an interesting thought after the Super Bowl. Tracy Porter, the Saint’s cornerback who picked off Peyton Manning, said that they had studied Manning on film and knew he was going to throw that exact same pass. That’s “analytics”, the ability to predict likely behavior. However, the cornerback didn’t take that information and call a time-out to hold a series of meetings on his findings. He “acted” (and intercepted the ball) resulting in a Saints victory. Just like the retail banks that rely on Chordiant Cx Solutions, he was able to “operationalize” the data.
In a recently updated report by Forrester entitled “The Marketing And Customer Analytics Software Landscape”, Suresh Vittal discusses how simple analytics doesn’t work for customer intelligence any longer. I found the two paragraphs below (emphasis added) very intriguing:
Today, predictive analytics go beyond response prediction to serve all kinds of marketing goals like Cross-sell/Up-sell, retention, and loyalty management. But firms are only scratching the surface when it comes to applying analytics to drive customer decisions. As the head of Customer Intelligence for a large retail bank described, “We want prediction to inform more than just marketing. We want to influence our go-to-market strategies, collections management, risk mitigation, and fraud detection.”
Insights are rarely available at the point of interaction. For most organizations, analytics remains the domain of the power users and data analysts. As the head of CRM for a European telecom explained, “Our intelligence team generates great insights. But we are constantly struggling to integrate these insights into our customer and marketing strategy.” This is a common refrain – marketing teams often lack the skills or the technologies to integrate the essential insights to guide customer interactions.
If you take a look at Chordiant’s solutions, you’ll see that this is exactly what we do. Chordiant coined the phrase “Next-Best-Action™” to recognize our solutions are more than just offers and we do it in real-time. We operationalize analytics at the point of interaction just like Tracy Porter did!
— Scott Andrick, Director, Product Marketing – Financial Services
If you feel bombarded by the slew of different customer experience management definitions in the market you’re not alone. All too often we find that traditional siloed CRM companies lay claim to offering complete customer experience management capabilities…but the definition of those capabilities changes from day to day. Chordiant believes the goal – and hence definition – of a truly intelligent customer experience management strategy should be to maximize the lifetime value of a company’s customer base.
Companies can no longer be content with minimal outbound sales discussion improvements or slight customer retention improvements. Today’s economic and environmental factors are so dire – brand hopping, erosion of customer trust, economic pressures on companies to do more with less and meet shorter product windows — that the smart companies are setting longer term goals that focus on holding more intelligent conversations that extend the value of the customer to company relationship – think marriage, not dating…
— Ray Gerber, SVP and CTO
Think fast! Do you know how some of your current marketing and sales campaigns are affecting your customers’ opinion of your company? Do you know the impact those opinions will have on your forecast revenue, churn, profits or any other business metric?
Many companies think they have the most up to date customer intelligence and business analytics that provide the ability to react quickly to changing customer needs and opinions and changing market environments. But in reality, they lack not only a true real time component but also the ability to tie customer dialogues to departments outside of the call center.
In a recent article by Chordiant’s Rob Walker, this concept of having faster reactions to customer needs – literally in real time during call center or other multichannel conversations – can allow a company to start simulating strategies before they go into production or consider modifications of strategies that already are in production. Companies can capture data from their customers, and then run hypothetical strategies against real data to consider the effects on aspects of customer relationship, retention, company sales abilities and the like immediately. Customers can also see hypothetical results of strategic changes to, say, the number of call center agents by 10 percent, making a proposition more often (cannibalizing others), changing an upgrade policy, doubling the retention budget or increasing the price of data services…
— Ray Gerber, SVP and CTO
The average company loses half of its customers over 5 years. That’s a staggering number – and what’s even more shocking is the hundreds of vendors out there that all claim to offer technology to help retain customers, create stronger relationships with those customers, and build future customer bases. With the myriad of offerings out there, why have so very few succeeded at truly optimizing the customer opinion of major brands while driving the bottom line for companies, essentially maximizing the lifetime value of customers?
I decided to bring you some reasons straight from banks that have all looked at traditional CRM offerings and realized there were none comprehensive enough to solve the case of the disappearing customer. Surprisingly, even though we’ve been talking about this for several years, I still hear bankers say (as recently as this week) “we don’t really have a single view of our customer or a true understanding of their value to our institution”. That notion is set against rising consumer sentiment against banks for a litany of reasons like:
• Declining trust due to the financial collapse
• Loss of the actual institution due to M&A
• Onerous fees/pricing
• Exorbitant bonuses
• Cold, impersonal, numeric decisions
Bowing to populist pressure, Washington is attempting to regulate some of these points, like Credit Card rates. In addition, the Huffington Post launched a mini-revolution on New Years by urging fed up consumers to leave the Wall Street banks for the safety and relationships of their local community bank.
And that seems to highlight the issue of “big banks” and their “traditional CRM systems”. Customers don’t want the M; they don’t want to be “managed”. Customers don’t want to be sold the product that will give the branch manager a trip to Miami. They want the R; the “relationship”. Customers want someone to partner with who will stand on their side and truly look out for their interests.
– Scott Andrick, Director, Product Marketing – Financial Services
With the start of the new year and the kick-off of Chordiant’s blog, I wanted to take the opportunity to discuss the Customer Experience Management trends that I see taking the stage in 2010. Send me your comments and let me know what you think.
— Ray Gerber, SVP and CTO
TMC recently reported that Frost and Sullivan research found that the contact center industry “needs to increase its focus on customer acquisition and delivering customer experience with people, processes and technology.” What’s more, the article cites earlier Frost and Sullivan findings from March of this year that suggest that the telco industry is likely to be hardest hit by the recession: for example, since November 2008, Vodafone and Telecom Italia announced midterm cost reductions. Also, BT and Virgin Media had decided on job cuts; the former relieving 10,000 employees, while the latter reduces its workforce by 2,200.
In this economic climate, customer churn remains the most critical customer concern for many of our telco customers, and in order to help them deliver an order-of-magnitude better customer experience, Chordiant helps our telco provider customers identify and keep their best, long-term customers at the right cost. We do this in a few unique ways: giving a unified, up-to-date view of customers with instant analysis to better understand current behavior, building more effective customer retention strategies that are optimized for every customer’s personal situation, and delivering a superior customer experience by continually guiding interactions while the conversation with the customer is occurring. Unlike any other technology offerings out on the market today, we are able to deliver actions, recommendations and negotiations based upon customer responses, mood and instant analysis of behavior in real time, so end customers don’t get hit with pre-scripted, best-guess conversations based on outdated data. Working with Chordiant, O2, a leading provider in the UK supporting 17M subscribers, found a three percent reduction in churn, an 85% conversion rate on inbound offers, and 15% uplift in ARPU, all with Chordiant. This short O2 video gives you an idea of the effects a positive customer experience can have on the profitability of your business.
– Marchai Bruchey, SVP and CMO
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