Social CRM The Next Stage in Insurers' Social Networking Journeys

Out of the frenzied flurry of activity that is social networking comes a relatively new approach that promises to help bring a semblance of order to the countless tweets, messages, and posts that are shaping opinions about insurers' products and services. The approach, popularly called Social CRM, for social customer relationship management, takes typical CRM-an internally generated and maintained collection of knowledge about customers and their interactions with a company-and adds information streaming in from the virtual communities that now are part of many customers' experiences.

Insurance industry managers and observers alike report growing interest in Social CRM, which builds off the burgeoning interest in social media both within and outside organizations. "Social CRM is a fancy nickname for a strategy that says 'when we're doing social media, we need to integrate our learnings and our social media conversations with other customer relationship management strategies,'" says Karlyn Carnahan, principal with New York-based Novarica. Social CRM, as is the case of social networking, is based on collaboration with virtual communities, be they customers, potential customers, employees, agents vendors, or others.

Data from these community engagements, whether actual comments or sentiment analysis, is distilled and presented to decision makers from customer contact centers to the C-suite, just as standard transaction information currently is disseminated.

An additional dimension that Social CRM brings is the involvement of "influencers" within social network communities who may play just as much of a role in corporate decisions as executives themselves. "We get great data out of Social CRM, and it helps along multiple fronts," says Marc Zeitlin, VP of eBusiness at Los Angeles-based Farmers Insurance, which began its Social CRM effort in earnest last fall. Farmers' initiative, which involves the sharing of information, via Facebook, Twitter and LinkedIn among its network of 15,000 agents, enables the company to better compete against direct-to-consumer insurers.

"We're driving growth and new business, as well as customer retention. We also gain product knowledge and service. We're able to determine whether there's a need in the market that we're not meeting."

FAST AND FURIOUS

Current survey data shows Social CRM to still be in its infancy, though its likely uptake may be fast and furious over the next few years. A recent survey of 3,342 marketing directors by Warren, R.I.-based research firm MarketingSherpa found that 6% of companies already had functioning Social CRM efforts underway, but a whopping 56% were planning such initiatives in the near future.

Stamford, Conn.-based Gartner, in the meantime, predicts 30% of companies will extend their social networking efforts to Social CRM processes within the next two years.

Is the same rapid uptake of Social CRM just as likely in the customer-service-intensive, information-rich insurance industry? As with many aspects of technology adoption, insurers are taking more of a cautious approach toward this new method of customer interaction and data-gathering. "Social media and Social CRM are being embraced by many different industries," Stuart Rose, global insurance marketing manager at SAS, Cary, N.C., points out. "Unfortunately the conservative nature of the insurance industry means that they are often slow to adopt new technologies."

Much of the push toward Social CRM is coming from the vendor side in the insurance industry, says Craig Beattie, an analyst with Boston-based Celent. "Insurers aren't really thinking about this yet. The kinds of offerings you get from vendors tend to focus on views of the customer, with all their e-mails, phone calls and policies, and alongside that, Facebook entries or tweets that might be relevant-a blending with public data, to get some idea of the kind of conversations people might be having. We haven't seen insurers employ it yet for underwriting purposes, pricing purposes, or getting along better with clients."

DEEPER ENGAGEMENTS

Still, those insurance companies that are comfortable and savvy with social networking are likely taking the lead with Social CRM as well. "Some of the very largest insurers who were early adopters with social media are certainly doing Social CRM," says Novarica's Carnahan.

Zeitlin says Farmers is baking Social CRM knowledge and practices into its agent network affiliations. "Our strategy is to empower local agents with the same quality of technology and tools that the direct-to-consumer writers have," he explains. "Each agent has business in a local community within a physical network-taking folks to lunch, joining clubs, supporting high school sports, and supporting local charities. Social media is 'word-of-mouth on steroids.'"

Enhancing agent relationships with customers may be the first area many insurers may see benefits from their Social CRM strategies, agrees Frank Diana, director of business analytics at Mumbai, India-based Tata Consultancy Services. Social CRM facilitates "a dialogue between the company, agent and customer that results in more personalized and deeper engagements," he says, observing that Social CRM is "a powerful sales, marketing and customer service platform to improve the overall customer experience and elevate their brand identity, while also empowering the local agent by inviting their participation in the social community."

Along with improving the quality of agent customer relationships, there are a range of traditional insurance functions that can eventually be addressed by Social CRM. Such areas include "recruiting new agents, communicating with existing agents through a community to share best practices, verifying claims, and enabling sales to leverage their network of friends and be a brand ambassador," says Ehab Samy, VP of Atlanta-based CDC Software.

"At its crux, the goal of Social CRM is to drive innovation," adds TCS' Diana. To fully benefit from Social CRM, he says, "insurers need to extract business intelligence from customer data to guide their product roadmaps and improve the customer-facing processes such as quoting, billing and claims." Ultimately, with Social CRM tools in place, there is a lot of valuable insights that can be mined from customer interactions on social networks. Significantly, information from social network discussions may alert insurers to problems or opportunities long before they come to the attention of decision-makers through traditional channels. "Consumers are posting their experiences on forums, blogs and tweets across a range of topics, from their interactions with customer service, through how claims are processed, thereby generating interest among their peers," says Ranjit Kumar Agarwal, manager with Cognizant Business Consulting's insurance practice, Teaneck, N.J. "Word-of-mouth publicity coupled with a customer experience discussion from a peer can go a long way in influencing the customer decision."

HARD DATA

Social CRM, at least in these early stages, is often driven by marketing, but ultimately will also end up with customer service operations. However, customer services departments often demand proof of results before investing time and resources, and thus, Social CRM efforts will need to be linked to hard data and results that come from community-based engagements.

"Social CRM, at its core, is a strategy to engage with customers in their moments of need," says Rajesh Desingu, VP of sales at New Delhi-based NIIT Technologies. "Through social networking sites like Facebook and Twitter, companies can collaborate effectively with their customers in real-time. It is not about the number of followers on Twitter or 'likes' on Facebook, it's about forming communities wherein open discussions about consumer needs can take place, and where companies can monitor and mine those discussions in order to improve services."

In addition, many organizations are faced with hard choices about pursuing technology approaches that may or may not be supported or in vogue a few years down the road. However, waiting until the dust settles may put insurers at a disadvantage as competitors leapfrog ahead with new social community-based approaches to understanding and engaging with customers.

Farmers' Zeitlin, for one, advises being bold with social CRM and moving "quickly and aggressively." Insurers may have more regulatory barriers to social engagement than other industries, but this should not stand in the way, he says. "Try to strike the right balance between legal department review of content, and being more aggressive in listening to customers and communicating with them. If you're too conservative with it, it simply won't work. Plus, you do need to be quick-when somebody posts a message on Facebook, they expect a pretty immediate answer. You have to be on it 24x7, and you have to able to respond to it quickly."

Technical integration issues did not pose a barrier for Farmers' Social CRM efforts, either. Zeitlin says much of the integration work between the company's proprietary existing CRM platform had already been done when the system was integrated with its Web capabilities, which enable online quoting and routing of leads to agents. "The quote data has been integrated with our contact management system for quite a while. So integrating Facebook data was a trivial task, because the amount of data from there is so much smaller than that from the quoting engine." In addition, the company maintains an internal collaboration platform through its Lotus implementation from IBM.

Social CRM efforts need to have as few restraints as possible, and be allowed to develop organically from the ground up among employees, Celent's Beattie agrees. "When you first install Social CRM tools, don't put too many rules in," he advises. "Let people play with the thing and learn how to do it. People will want to form groups to achieve different objectives, share documents, execute projects, and even share activities that were happening outside work. Let the community form the best practices."

DRIVING SOCIAL CRM

It is critical to nurture both internal and external communities to drive Social CRM efforts. "Insurance organizations must create a community for each function including underwriters, agents, customers, and sales teams," NIIT's Desingu says. "These separate communities should also interact with each other. Agents will play a key role in Social CRM as companies implement strategies to interact with agents to garner loyalty, and address the needs of customers through agents' communities."

Sometimes, it's a matter of starting out by just simply listening. As insurers become more familiar with social media and start to see activity increase, such as comments being made, eyes light up, and they realize, "Ah, there's a lot of information here that we need to respond to more effectively," Novarica's Carnahan says. "We really need to embed social media into customer-related strategies, which should include establishing processes to respond quickly to capture and utilize information, be it a question, complaint or compliment," she says.

Joe McKendrick is a Doylestown, Pa.-based author and consultant specializing in IT, and a regular blogger for insurancenetworking.com

 

The Path to Social CRM

Why should insurers embrace Social CRM? According to a 2010 report from Dublin-based Accenture, the use of social media has reached a tipping point and companies need to acknowledge this fact as a competitive necessity.

"The majority of customer CRM interactions now are occurring outside of company-controlled channels, and companies must adjust their CRM operating models to adapt and engage these outside channels to drive growth and keep customer satisfaction high," the report states. "Social CRM is a company's necessary response to its customers' transformation from spectators (TV watcher, newspaper reader, Web browser) to participants (product rater, blogger, ambassador) and their subsequent co-ownership of the company's brand."

According to Accenture, one of the primary benefits of adopting a social CRM strategy is that it helps companies reach customers at many more points and much earlier in the buying process, often at lower cost than that of more traditional marketing, sales and customer service channels. "In fact, social media increasingly is being referred to not in terms of marketing or sales, but rather, as an "engagement channel," which incorporates elements of both marketing and sales," the report states.

To get started, Accenture counsels companies to first identify and embrace the social media channels being used by their customers. A second crucial step is to identify and engage with the "super-users" who supply product expertise to other customers.

From a technical perspective, insurers will need to harness the power of advanced analytics to provide broad insights on customer needs, wants and behaviors. Another prerequisite is a flexible operating framework that allows "a company to observe what customers are doing and saying, and then experiment with different customer experiences to discover those that resonate with customers." Indeed, a crop of insurance-specific social media monitoring tools are entering the market to help insurers glean quantitative and qualitative responses to advertising campaigns for promotions, and identify people who may be highly predisposed to their brand or a particular product.

For example, in February, SunGard launched Protegent Social Media Surveillance, a social media compliance and surveillance solution that helps insurers monitor and archive content posted to social networking websites, regardless of the device used to make the posts. The product is intended to help firms navigate the legal and regulatory thicket surrounding use of social media and to help enforce internal social media policies by providing automated pre-approval workflows and reporting and alerting capabilities. —Bill Kenealy

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