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Customer Consolidation

As finicky financial services customers increasingly rely on the Internet as a research tool, it's more apparent than ever that the competition's Web site is only a click away.

As finicky financial services customers increasingly rely on the Internet as a research tool, it's more apparent than ever that the competition's Web site is only a click away. So why aren't more underwriters stepping up to differentiate themselves with the kind of personalized service that will keep customers coming back for more? The all-too-common lack of a centralized customer information repository is at the root of the problem. But as more vendors respond to insurers' legacy plight with customer data integration (CDI) solutions, the time for customer data consolidation is now.

An impending polarization of policyholder demographics is also contributing to the urgency for more specialized service offerings that are dependent upon a single customer view, according to Cynthia Saccocia, senior insurance analyst at Needham, Mass.-based TowerGroup and author of the study "Profitable Customer Service: Shooting for the Moon." "We are starting to enter into a changing demographic of policyholders," she relates.

Saccocia projects that the near future will bring large concentrations of customers at both ends of the age spectrum, with a large population of older policyholders juxtaposed with a much younger generation of customers who have different service expectations.

"An organization's ability to attract both younger policyholders and balance those needs with those of older policyholders will create some nuances," Saccocia explains. "Especially since younger customers have grown up in a different era with different modes of communication."

But the future of specialized insurance customer service will not simply be dependent on an insurer's knowledge of a policyholder's preference for phone calls over e-mails. Carriers must also be prepared with relationship-building records of detailed personalized customer information. "It seems simple, but [customer data-centricity] gives carriers the ability to define rich information and keep track of everything, from a policyholder's nicknames to what they call the family dog," says Justin LaFayette, chairman and co-founder of CDI solutions provider DWL (Atlanta).

Go for the Gold

Such a specialized customer view will not only delight customers, it will also have a real impact on a carrier's bottom line. Michael A. Costonis, partner, Accenture Insurance Group (New York), suggests that a centralized database that keeps track of policies and transactions will help underwriters determine "the long-term value of the customer to the enterprise." Armed with such information, carriers can take an informed approach to cross-sell/up-sell opportunities, especially when their customer service representatives are armed with comprehensive decisioning trees.

TowerGroup's Saccocia, a former customer service representative, explains: "Some of the more robust customer service applications feature decisioning trees, or drop-down menus, that affect customer service representatives' ability to have more-informed conversations with policyholders. [Representatives'] cubicles used to be covered with yellow Post-its and product-specific sheets with information about key strokes, but now this information can be made available at their fingertips."

But carriers that opt for this progressive marketing strategy shouldn't expect to sit back and watch the new business roll in after they've implemented these functionalities. Instead, they must be prepared to incentivize customer service reps as their roles evolve into more sales-like positions than before.

"If you encourage the call center to play a role in retention activities that involve cross-selling, the job of the customer service rep changes from servicing to advising," Saccocia contends. As a result, "Some insurers are setting up variable pay structures with base compensation and commission or bonuses," based on a rep's sales activity.

Although many carriers are eager to embed cross-sell/up-sell functionality in their call centers, for many there is still the issue of data to contend with. As might be expected, companies pursuing this goal are following different paths to a single customer view and are at different stages of the journey.

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