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Nationwide Takes CRM Enterprisewide

The customer relationship management strategy at Nationwide Insurance covers all channels, including agents, call centers and the Internet.

With all of the buzz and hype about customer relationship management (CRM) in the insurance industry today, it's easy to get confused about just exactly what CRM is. However, CRM is real and many insurance companies are beginning to get a grip on a solid definition of customer relationship management.

Columbus, OH-based Nationwide Insurance ($194 billion in assets) is well on its way to establishing an enterprisewide CRM initiative. "The first thing you have to realize about CRM is that you can't boil the ocean," according to Michael DeVoe, director, marketing strategy, CRM. "CRM is a huge issue and if you try to tackle it at once, you will fail.

"More importantly," DeVoe adds, "CRM is not about the technology and tools. It is about designing an integrated approach to the customer," and putting the technology in place to follow the design. "The design of the technology has to wrap around our approach to the customer," he adds.

Sometimes, the task of developing a CRM strategy is in itself difficult, says Kelly Cannon, vice president of information technology, Nationwide. "One of the real challenges is separating the buzz about customer relationship management from the realities of CRM," he says. "We have to apply technology to our core strategy. The more we are able to do that, the better off we will be in the long run."

In fact, says Ed Nail, associate vice president, strategy and development for the e-Nationwide team—the group that has been designated to run Nationwide's Web site and to integrate all channels for better customer relationship management—the buzz has only served to confuse the industry. "I am not diminishing CRM, but people are making it too complex," Nail says. "Customer relationship managment is not mystical and it didn't come from Mars. CRM is about treating and dealing with customers in the fashion they want to be dealt with.

"Our agents have been managing customer relationships for more than 75 years," Nail continues. "CRM is about emulating the customer experience from the agent's office, to the call center and to the Web."

Customer Choice

Nationwide's CRM strategy is currently centered on the Customer Choice initiative. "We want to be able to connect to our customers in the way they prefer" to communicate with Nationwide, says Steve Tien, associate vice president, distribution systems. Customer Choice is Nationwide's goal of initially offering its property/casualty products to customers in an anytime, anywhere and any channel manner. Customers who do business with Nationwide Insurance through its agents, a call center or through the Internet will receive the same level of service through all channels, Tien says.

"Customer Choice is our strategy," Tien adds. "How Nationwide is putting all of the channels together, that is CRM."

However, at Nationwide integrating all of the channels is not a mammoth project that overwhelms the entire IT organization. "There are many things that have to be done in many different areas involving many different people," Tien says. "It is easy to get overwhelmed, but we break down our IT projects into smaller pieces.

"Making projects smaller has made us successful with most of the initiatives," Tien adds. For instance, individual projects rarely run more than six months, although the entire CRM initiative will take much longer.

Linking all channels together to power a CRM initiative should produce easily quantifiable results, says Nail. "Customer relationship management impacts Nationwide in three areas; growth, retention and expense management," Nail says. "Retention is the ultimate result from CRM. Simply an increase in retention of existing customers of one percentage point results in $1 million in annual premium."

Multiple Benefits

The retained premium numbers do not even include other areas where Nationwide will benefit from better customer relationship management processes, including a reduction in expenses as a result of policyholders self-servicing policies on the Web; and increased growth, as more customers are attracted to Nationwide because of its integrated CRM channels.

But in order to get the quantifiable results, says Nail, "You have to put your 'customer head' on first and ask, 'What would the customer expect from Nationwide?' The answer is easy: value, speed, good service, a good price and a claim that is serviced well," he says.

Nail's "easy answer" may be easy to provide over a single channel, but CRM mandates the same level of service through all channels, and at Nationwide that involves an estimated 350 systems and applications, says Cannon.

In order to get the numerous systems to reflect the same information about a customer, Nationwide is developing a central customer information file that can be accessed by all systems to get the most up-to-date information on a customer. "The customer information file will house the core information on the customer," such as name, address, Social Security number and policy numbers, says DeVoe. "That way, if a customer changes an address, the customer service rep only has to update one file," as opposed to updating files for all of the customer's products in various legacy systems.

However, according to Tien, developing the specifics for the file has been a project in itself. "What type of information does the file need and how does it get updated?" he asks. "We are really still figuring it out."

And the customer information file will provide information to a variety of systems. "We have to integrate across the Web, e-mail call centers, databases and many other applications," Tien adds.

Transparency Is Key

The resulting process will allow customers to update their address information through the Web site and then immediately call the 800 number and speak to a customer service representative who will have the current information. "Our processes have to be transparent to the customer," and an integrated system is the only way to make it possible, Tien adds.

Companies moving towards integrated and transparent processes are a direct result of popular Web sites. "The customer drives everything," Nail says. "As a result of customers using Amazon and other sites, they expect to have that type of technology at their insurance company. In the world of the Internet, customers expect things to happen." In other words, Nail adds, a Web site can't be static anymore.

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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