As the economy slows and the trend of growth by acquisition fades, insurance companies are looking for ways to increase profits without necessarily increasing their number of customers.
With mergers slowing, a new trend is emerging in the area of analytical customer relationship management. "Now that mergers have died down from the pace of the early to mid-'90s, you can't acquire new customers all that easily," says Nelle Schantz, global strategist and CRM program director at Cary, NC-based SAS Institute. "You have to grow and retain the existing customers."
Analytical Spending Up
As a result, while Schantz says there is a "definite step-back in IT spending," there is actually an increase in analytical CRM-related spending. "The number of requests and solicitations about analytical CRM is way up," Schantz claims, although she admits the sales cycle may be a bit longer for analytical CRM systems.
One reason why businesses, and especially financial service companies, are focusing efforts on analytical CRM is because many of them already have invested in operational CRM products, such as advanced Web capabilities and customer-friendly call centers. "People have been talking about CRM for five years, but most of the buzz has been around sales-force automation and enhancing customer contact points," Schantz says. "Now that the hardware is in place, financial services companies want the ability to build one view of the customer. Get the customer data, clean it, do some pretty serious data mining of the data and then deploy the knowledge out to the front offices."
In order to help financial services firms take advantage of the wealth of customer data they hold, SAS has partnered with IBM (Armonk, NY) to provide analytical CRM technologyinitially to financial services and telecommunications customers. "IBM has great domain expertise in the financial services industry and that is why we chose to partner with them," Schantz says.
And focusing on financial services and telecommunications, according to Schantz, is not a bad place to start, because financial services, telecom and retail are the three largest market segments (in no particular order) that focus on CRM. "These industries have many, many customers and a variety of touch points," Schantz says. Within financial services, Schantz says retail banking and wealth management firms are slightly ahead of insurance companies when it comes to CRM and analytical CRM.