Customer experience management, unlike customer relationship management, offers measurable return on investment, as well as many opportunities for process improvements, says Stephen Applebaum, a subject matter expert in insurance information technology. Chains of events are shorter, handoffs are tighter, and communications are determined by customer preferences, are more streamlined and transparent.

"You can measure it with retention and lifetime value of customer, and watch it as it grows," Applebaum says.

One large P&C insurer, for example, spent two years transforming its claims department from being cost and estimate centric to being customer experience centric. "Everything about that claims department, whether it's body work, salvage pools, lawyers, independent adjustors or appraisers, contents replacement companies, all the vendors, all the staff are being realigned," Applebaum says.

One critical element of transforming the customer experience, he says, was introducing automated text messaging to tell claimants when cars will be ready for pickup, which compressed the cycle time from 14 to 11 days, Applebaum says, which increased customer satisfaction and cut costs associated with storage and rental car days. "We could do this across the organization with example after example, because the ideas are transferable," Applebaum says.

The biggest initial challenge, he says, is the siloed structure of most insurance companies and the fragmented nature of their internal and external communications.

"Insurers have all these silos: the claims silo, the marketing silo, the sales silo, underwriting silo; they are almost like independent business units. But insurers can't afford to be siloed any longer, because customers are not. They are horizontal. They deal with the sales department and the billing department and the claims department. The best companies have customer experience strategies that reflect horizontal corporate strategies. All their strategic plans are in synch. Marketing knows what claims is doing, claims knows what billing is doing, etc."

The ability to leverage data to anticipate customer requirements is an important element of success, he says. For example, knowing that a household has a 15-year-old in it can help with the success of sales and marketing efforts, as well as with rates, retention and minimizing fraud. "It's not complicated to figure out who just turned 16 or bought a new car," Applebaum says. "But without analytics, you can't do it with a million policy holders."

Such customer interactions are increasingly common, but frequently require insurers to bring in outside talent. "When I look at who's done it well, they all brought in someone from the outside. Companies can't seem to do it on their own. There's too much momentum and too much pressure against change."

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