By Todd Hollowell, Doculabs
In the insurance industry today, there is a clear trend away from selling a broad range of products to a large volume of customers in a "one-size-fits-all" manner. Instead of focusing on their different product lines as silos (i.e., Life, Property and Casualty, etc.), insurers are looking for ways to offer highly targeted insurance products that are tailored to the individual customers with the highest propensity to buy them.
Effectively selling targeted offerings means going after extremely narrow customer segments. For example, insurers are targeting new retirees with much different programs than young entry-level males. Similarly, when the entry-level male gets a bit older, marries, buys a house, and has children, the range of insurance products that are attractive to him becomes much different, and insurers need to be able to assemble the right mix of products and services for the target audience.
Being able to segment and target your customers with tailored offers is easier said than doneand technology is a big piece of the puzzle. In order to deliver on your customer segmentation and marketing efforts, we at Doculabs advise our clients to focus on four specific components:
Data and Marketing Analytics
Data is your most critical asset as you try to compete in the ever-changing insurance sector, and you already have tons of data (such as product data, customer data, sales data, premium and loss data, etc.) stored in various places. Insurers are now looking at how they can better organize, analyze, and leverage these disparate data sources. In addition, many insurers are continually fine-tuning their customer marketing efforts.
Due to these key issues, many insurers are increasingly turning to marketing-automation tools to assist in acquiring and retaining customers and generating new sources of revenue. Marketing-automation systems perform critical, real-time data analysis that lets business managers gauge the effectiveness of marketing initiatives. More specifically, marketing-automation applications let companies build, execute, and measure their marketing campaigns. Most of these products also integrate and update information on customer segments and profiles based on the constant input of new data across various data sources.
Sophisticated integration typically requires costly and time-consuming programming effortsmany of them one-off, custom jobs that are impossible to re-use. And as the number of systems grows, the integrations become more difficult and more costly to maintain. Many insurers find that the complexity of their information technology (IT) infrastructures puts them at a disadvantage as they seek to implement new technologies to support specific initiativesparticularly Web-based initiatives that require them to extend the functionality of their legacy systems to their customers.
In response to these challenges, integration solutions offer a simpler and more scalable way of bringing disparate systems together. Integration solutions offer platforms for minimizing point-to-point custom integrations, promoting reusability in joining diverse systems. This coordination of disparate data sources and applications also enables the automation of business processes that span multiple lines of business, giving organizations greater ability to leverage their existing information and knowledge capital.
With the explosion of Web sites and greater access to direct product or policy information, there is a need for developing better techniques to give customers a truly personalized experience. Personalization capabilities provide customers with content that is related to their current activities or navigation. For example, a customer that has recently moved and is looking at information for a new homeowners' insurance policy may also be presented with information about a new life insurance policy.
Personalization enables organizations to reach their customers with more impact, and to generate new revenue through cross-selling and up-selling activities.
To ensure that customers receive personalized information, many organizations are incorporating knowledgebasesrepositories of content that typically include a search engine that lets customers locate all documents and information related to their queries or requests for service. Customers can use knowledgebases to manage product or company information and invoices, claims records, and histories of service inquiries. Many knowledgebases support various search methods, such as full-text and Boolean search, and the use of index fields or parameters associated with information managed in the knowledgebase. These products also may be able to automatically "learn" from a customer's previous knowledge-base sessions, and to use this information when determining the relevance of information to the customer's search request.
Self-service has become a key strategy for insurers as they seek to solidify relationships with their customers. With the ubiquity of the Web, many consumers now expect to find online self-service options that let them help themselves to information when they want or need an alternative to conventional service channels. They've also come to expect highly personalized applications that let them accomplish tasks such as changing logistical information or coverage amounts, checking the status of claims, and researching other products or services. Besides delivering the obvious benefits that come from making customers happier, Web self-service can help businesses achieve greater efficiency and lower customer-service costs by reducing call-center activity that requires manual handling and routing. Web-based self-service also can deliver return on investment by leveraging a company's Internet infrastructure, legacy systems, content repositories, and other existing technologies.
Insurance companies are all facing the same challenges brought on by current economic conditions. As insurers looked to stake and maintain their claim of the market, there is one main area of focus: the customer. Above and beyond all else, understand your customer specific needs and offer services to meet those concerns.
The insurance sector remains a very competitive market, and those companies that are able to best utilize their data and provide their customers with the most personalized options will have a distinct competitive advantage. The insurers that come out on top will be those that leverage the appropriate technology solutions effectively in order to foster customer loyalty, attract new customers, and improve operational efficiencies by providing common information across their lines of business.
Todd Hollowell is a vice president with Doculabs, an independent research and consulting firm that helps organizations plan for, select, and optimize their strategies and technologies. 312-433-7793, www.doculabs.com, [email protected]