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Making Service a Competitive Weapon
Strategies for making customer service a competitive weapon, rather than a cost of doing business, were the focus of presentations at Insurance & Technology's Customer Service Leadership Forum, which took place in New York City last month.
Customer Service Leadership Forum sponsors included Fair Isaac Blaze Advisor, Sherwood International, Document Sciences, SAP, Software AG, SpeechWorks, Teradata and IASA. TowerGroup served as program partner for the event.
"Measurement is the cornerstone" of any effort to improve customer service and turn it into a competitive advantage, noted keynote speaker Sharon Ritchey, senior vice president, The Hartford, P&C Service Operations. Ritchey, who oversees nine service centers, outlined a recently completed initiative that not only redefined the carrier's approach to service, but also instituted a detailed andongoing system of measurement and tracking that is being used to improve quality in the service centers and upgrade the total customer experience.
The challenge, Ritchey related, was "how to create service as an offensive weapon? How do we differentiate ourselves compared to the competition?" There were three goals: manage costs, generate revenue and improve the experience of customers. The Hartford developed the Customer Experience Management System (CEMS), which, as Ritchey explained it, "captures 100 percent of all calls and screen flows" taking place in the service centers."
The initiative, implemented in 2002, is already showing measurable results, Ritchey reported. "Our cost-benefit analysis projected a return of about 28 percent, and we're now seeing a more than 40 percent ROI. This is real and we're realizing the benefits," she said.
The challenges of achieving a single customer view were addressed by executives with organizations coming to the task from different perspectives. Irene Heege, senior vice president, IT, ING US Financial Services (Atlanta) reported that ING's 2000 acquisition of ReliaStar and Aetna Financial Services gave the Amsterdam-based company a significant US presence, with 14 million customers and the third-largest broker/dealer network in the US. That meant many opportunities to cross-sell, but taking advantage of that opportunity required finding a way to identify customers and their wants. "On the IT side we had tremendous redundancy," Heege explained. The technology environment contained more than 2,500 applications on 35 major platforms. ING US implemented what it calls the Integrated Americas Adaptive Architecture because, noted Heege, "we needed a road map and a framework that was going to tell us how to bring this diverse technology environment together."
Looking To Cross-Sell
According to Gary Scholten, CIO, Principal Financial Group (Des Moines), his firm's approach to a single customer viewa term he equates with CRMwas shaped by a strategy focused on the small to medium business market, plus a move to customer-centricity."
Among the key technologies Principal identifies as essential for its CRM strategy are an affiliate file, contact center/sales desk, affiliate data warehouse and datamarts, sales force automation applications, campaign management and customer analytics, according to Scholten. Describing CRM as a "revenue play," Scholten said Principal aims to foster sales by leveraging information gleaned through customer contact and empowering the sales force to pursue the leads it generates.
During the session, "Claims & Transactions: The Make-or-Break Customer Interaction," Ronald L. Minafri, deputy superintendent and CIO for the New York State Insurance Department, related how the department is working to make interactions among the consumer, the department and the insurance company easier through the use of e-business initiatives. Specifically, New York has developed an online consumer complaint processing system, called the Consumer Imaging Information Management System (CIIMS), and an online licensing offering for agents: Licensing Information Online Network (LION). LION allows agents and producers to renew licenses with links to credit card processing and provides links to DMV systems.
Minafri also is planning to create a CIO Council, composed of CIOs from insurance companies, which will focus on Web-enabling all transactions. "We will be inviting CIOs from many insurance companies to come and discuss how we can work together to discover opportunities where Web-enabling transactions will be useful," he said.
Also addressing the topic of transactions, Walt Wojcik, who recently retired as Milwaukee-based Northwestern Mutual's CIO, stressed that before a company decides to implement CRM to automate transactions, it should first decide why it is doing CRM in the first place. "What do you want CRM to do for you?" he asked. "CRM is not about technology, it is about your business."
With the goal of doing online what it currently does offlineand doing it betterMetLife (New York) aims to make the Internet the channel customers prefer, reported vice president Sachin Shah, as part of the session "Are You Ready for the Next Generation of Portals & Self-Service?" The carrier also concentrates on the objectives of driving cost reduction and process redesign while increasing cross-selling opportunities.
Indianapolis-based Anthem Inc. is another company realizing success with its online strategy of offering services that enable customers to "not only use the Internet for self-service but also to improve their health as well," reported Mark Boxer, senior vice president, e-business. Anthem's portal strategy is to establish and maintain personalized relationships that improve health and increase convenience with value-added online content, tools and self-service.
The carrier recognizes that personalization will extend beyond user profile and permission-based approaches, Boxer noted, becoming increasingly sophisticated and leveraging contextual integration that combines silo services into a seamless, integrated Web application.
Addressing one common concern about e-business, Prudential Property and Casualty Insurance's (PRUPAC) John Heidelberg, vice president, e-commerce, and Maureen Areia, director, customer service, reported that efforts to improve both efficiency and service do not have to be in opposition, especially if business and IT collaborate in "Defining and Achieving a Strategic Vision on Customer Service."
An attempt to determine, in Heidelberger's words, "What's the most expensive thing we've got and how do we stop doing it?" revealed an opportunity in the service center. That most expensive thing turned out to be the telephone customer contact channel serving the company's customers, agents and third-party business partners. PRUPAC (a division of Prudential Financial, $371 billion in assets, Newark, NJ) fielded roughly 3.5 million phone calls per year. "The focus has been to figure out cheaper ways to answer the phoneor not answer it at all," Heidelberg said.
PRUPAC sought to shift from the mono-channel call center to a contact center, through "giving people options, whether through the Internet or IVR, to engage us in ways they prefer and which are cheaper for us," Heidelberg said.
Translating plan into reality required revisiting the evolving strategic focus, according to Areia, who was responsible for implementation. As PRUPAC determined how to craft cheaper contact channels, primary challenges included arriving at an understanding of where the shifting strategic focus had arrived, and dealing with potential friction points within the company.
Sometimes the service challenges are in the form of regulation. However, new rules that affect how customer information is used and shared should be seen as "an opportunity to distinguish yourself, not as a cost of doing business," according to Deborah M. Smallwood, insurance practice leader, TowerGroup (Needham, MA).
Regulatory Drivers
There are four key regulatory drivers affecting financial services today, Smallwood said-globalization; the current economic climate (including convergence, the impact of accounting scandals, and the slump in the financial markets); technology trends such as the expansion of wireless capabilities, Web-based computing, and an increased focus on data security; and the changing expectations of the customer.
From a consumer perspective, this is translated into demands for "protection, privacy and trust," Smallwood said. "Product is no longer a differentiator for customers," Smallwood said.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio