Most P&C insurers differentiate nearly exclusively on price, a point proven by a quick online rate check. Such differentiation means that customer acquisition is often a loss-leading exercise, yet renewal can be the first opportunity to make a customer profitable for the business. Given that customer retention costs far less than customer acquisition, customer retention strategies are paramount.
MEASURING QUALITY
Edmund Kelly, chairman, president and CEO of Liberty Mutual has argued, "To truly differentiate on the basis of service in the face of pure price competition requires a much deeper understanding of what customers really want." Based on this premise, one thing becomes clear: As the first point of contact for most customers, the call center presents a first and vital step in understanding customer attitudes toward the business.
Insurers already use a range of metrics to measure call center effectiveness and efficiency. Problems arise, however, when these metrics are used to infer customer satisfaction and, therefore, the success of the contact center. Call center managers might believe that metrics such as first call resolution, as assigned by the agent, are good indicators of performance and satisfaction, but unless they ask the customer immediately after the correspondence, they won't actually know whether or not the customer was satisfied with the call.
The only way to know is to ask them regularly, not just once a year. Customers should be systematically queried about their experience at "key moments of truth," when they obtain a quote, file a claim or renew a policy.
ENTERPRISE FEEDBACK MANAGEMENT
An increasing number of P&C insurers use Enterprise Feedback Management (EFM) software as part of their customer experience program to measure customer attitude.
Using EFM software alongside customer relationship management (CRM) tools enables companies to automate and personalize the process of soliciting, capturing and analyzing customer feedback. The business can therefore request feedback automatically after each customer interaction and personalize it with data such as customer name and recent interactions.
Consider the following example of EFM at work in the claims handling contact center. When a claim's status changes to closed, data about the customer and specific claim is uploaded into the EFM system. The system e-mails the customer, inviting them to give feedback on the claim experience. Because the system includes customer data, the invitation is personalized and the policyholder knows the request is strictly about the experience they've just undergone. The combination of a personalized e-mail invitation and its timeliness drives high response rates and can improve overall customer experiences and business processes.
Once the policyholder completes the survey, two things happen. Any indication of dissatisfaction creates an alert to the claims team for appropriate handling. The team uses an online "resolution alert console" to view all required information in one area, including claim history detail and the survey responses.
The system automatically updates its Web-based "dashboard" summary of all customer responses to reflect the latest response. Company staff can access the online dashboard portal to monitor customer attitude using both aggregate and detailed screen views. Management relies on these reports to understand where any systemic problems reside. Analysts can drill down into overview reports to see greater levels of detail.
The advantage of automating feedback is that you can proactively solicit comments and complaints from unhappy customers, rather than simply reacting to them. Absent this type of program, customers are more likely to leave than complain. Therefore, with an EFM program, the business can increase the opportunity to identify dissatisfied customers, then satisfy and retain them.
Using EFM, insurers can drive competitive advantage based on quality of service rather than simple price-based differentiation. Capturing the experience as close to the interaction as possible, and acting on the feedback received will drive increased response rates and customer retention, bringing insurers into closer alignment with Edmund Kelly's vision.
Gary Schwartz is VP product marketing at Confirmit, Norway.
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