good policy: personalization drives customer acquisition and retention for insurers
DESCRIPTION
Service expectations in the insurance industry are on the rise. To keep pace, leading insurers are moving away from a traditional product focus to center business around the customer. In particular, there are a number of opportunities to improve customer acquisition and retention ROI by personalizing marketing, sales, and service interactions. In the presentation, “Good Policy: Personalization Drives Customer Acquisition and Retention for Insurers”, Weston McDonald, SVP of Financial Services at TeleTech, Jonathan Gray, VP of Marketing at Revana, and Elizabeth Glagowski, editor-in-chief, Customer Strategist Journal, explore the specific ways that personalization can drive success in customer acquisition and retention activities for the insurance industry. Discover: - The growing importance of customer focus in the P&C and life insurance industries - Six areas of personalization strategy that will boost customer acquisition performance - Five ways in which personalization can immediately deepen customer retention Download the webinar replay file here: http://www.teletech.com/thought-leadership/webinars/good-policy-personalization-drives-customer-acquisition-and-retentionTRANSCRIPT
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Property, Casualty & Life Insurance
The Personalization Revolution:Policyholder Acquisition & Retention in a Digital WorldJune 10, 2014
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Today’s Speakers
Elizabeth GlagowskiEditor-in-Chief
Customer Strategist Journal
Jonathan GraySVP of Marketing
Revana
Weston McDonaldHead of Financial Services
TeleTech
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Helpful tools Click the gold question mark for help with technical issues Enlarge slides when needed Twitter: @CustStratEditor #customerstrategy
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Compete on personalization
6 pillars of customer acquisition
5 pillars of customer retention
Q&A
Agenda
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Compete on personalization
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Our always on, digital world is transforming the insurance industry with a particular impact on customer acquisition and retention
Source: OVUM “2014 Trend to Watch: Insurance”; Ernst and Young, IBM Digital Insurance 2013, Ovum “Creating an Insurance Customer Experience Management Strategy”
Limited economic growth in developed countries
Consumers are ubiquitously connected
Strong competitive pricing
Individual- centered economy
Customer experience is basis of competition
Rise of online and digital channels empowering consumers
In an always-on, 24X7 multichannel world characterized by complex customer segmentation, delivering value has become more complicated
for insurers.
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It’s a battlefield to acquire and retain customers, and customer experience is rapidly becoming a fundamental differentiator
Source: KPMG, World Insurance Report 2013, Accenture 2014, Forrester Research 2012, Ernst and Young Global Consumer Insurance Survey 2012, Insure.com 2013 Customer Satisfaction Report
• Trust in the financial services industry is
the lowest of any industry at 44%
• Only 30% report having positive customer experiences with their insurers
• 40% of consumers are likely to switch to another automobile or home insurance provider
• 35% are likely to take out a new contract with a new provider
• 25% of customers are likely to cancel an existing contract
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With the right customer experience, insurers can increase the rate of acquisition and reduce churn of policyholders
70% of buying experiences are based on how the customer feels they are treated after they become a customer
Source: McKinsey; RightNow Customer Experience Impact Report
89% of consumers have stopped doing business with a
company after experiencing poor customer service.
A positive customer experience influences purchase decisions and minimizes customers switching to competitors
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Personalization is the key to enhancing the customer experience, thereby driving both acquisition and retention
Source: Ernst and Young 2013, Gartner 2014: “Personalize the Customer Experience to Boost Satisfaction, Loyalty, Advocacy and Profit”, SAS
• Policyholders of all ages prefer personal interaction when purchasing from insurers
• A personalized customer experience can increase policyholder conversion by
up to 20%
• By 2018, companies that have fully vested in all types of online personalization will outsell those that have not
by more than 30%
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6 pillars of customer acquisition
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Acquisition is particularly challenging in the insurance industry because advertising encourages consumers to shop around
• 55% of current marketing spend is on new customer acquisition*
• Policyholder acquisition is triggered by an individual’s specific need, not seasons or economic trends*
• Insurance advertising has become a daily part of our lives because insurers don’t know exactly when individuals will need a policy
Source: McKinsey; Bain 2013
Insurers need to understand when the individual’s need arises and be there at the right time with the relevant offer to capture the
opportunity.
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Potential new policyholders are using multiple channels to research and understand their insurance options
Linking policyholders’ interaction points to sales drives customer acquisition
Source: IBM Insurance Interaction Points 2013
Life Insurance P&C Insurance
Top U.S. interaction points for searching
Top U.S. interaction points for purchase
Personal contact
independent agent
Personal contact tied
agent
People I know personally
Insurer website
Aggregator
54%
45%
48%
47%
47%
48%
38%
47%
38%
38%
31%22%
31%33%
16%
24%
6%8%
N/A
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Personal interaction and customer advocacy are more important than price when acquiring new customers
Low in customer advocacy
High in customer advocacy
High future purchase
consideration
Low future purchase consideration
Source: Accenture 2014, Forrester February 2012, Ernst and Young 2013, KBM Media Research July 2013, Forrester “Customer Advocacy 2013: How US Consumers Rate their Financial Service Firms”
Enrollment DriversWhat drives policyholders to
purchase?
58%
82%
41%
Personal Interaction
Price
Personalized Services
USAA and Amica have customer-centric strategies and put their customers first in everything they do, from claims handling to renewals and communications
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To successfully acquire new policyholders, insurers must deliver an integrated and personalized experience across six key pillars
1. Personalized Search Experience
2. Attribute Based Routing
3. Custom Call Scripting
4. Technology Platform
5. Policyholder Outreach
6. Analytics Platform
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Not having to repeat information already given
Unique landing pages
Device specific
Early customer segmentation
1. Personalized Search Experience
With most prospective new policyholders beginning their search online, ‘personalizing’ the initial contact is critical
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1. Personalized Search Experience
With most prospective new policyholders beginning their search online, ‘personalizing’ the initial contact is critical
• Understands prospective policyholder location and garage share during search
• Offers discounts on policies relevant to policyholder’s search
• Customizes the online search results
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Leveraging attribute based routing enables the potential policyholder to speak with the right person with the right skills to help convert them to a new policyholder
2. Attribute Based Routing
Intelligently connecting insurance teams that most closely match the customer profile for sales discussion
Skills-based call routing
Temporal 800 number is unique to specific policyholder’s online search history
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Leveraging attribute based routing enables the potential policyholder to speak with the right person with the right skills to help convert them to a new policyholder
2. Attribute Based Routing
• Uses text analytics to assess policyholders’ social media comments and tweets
• Routes customer claims to the appropriate department for a prompt resolution
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Custom call scripting can be utilized to align to specific customer inquires and search history for both inbound and outbound calls
3. Custom Call Scripting
Build custom scripts for inbound calls
Match agent’s call script to customer’s online search history
Develop content for targeted outbound calls
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Custom call scripting can be utilized to align to specific customer inquires and search history for both inbound and outbound calls
3. Custom Call Scripting
• Organizes, stores, and analyzes call center data from agent surveys
• Identifies policyholder questions being answered incorrectly
• Updates answers immediately
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4. TechnologyPlatform
An integrated technology platform manages the multiple channels policyholders use to search and purchase new policies
Integrated technology platform remembers who the policyholder is and their preferences
Connects the policyholder’s claim history to the call to manage the experience
Source: IBM Insurance Interaction Points 2013
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4. TechnologyPlatform
An integrated technology platform manages the multiple channels policyholders use to search and purchase new policies
Source: IBM Insurance Interaction Points 2013
• Links customer’s mobile quotation app to a mobile voice assistant
• Integrates mobile app with technology platform
• Personalizes the search experience
• Addresses registered policyholder by name
• Stands ready to lend a hand
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5. PolicyholderOutreach
Targeted, relevant, and proactive policyholder outreach delivers increasingly personalized interactions
Care Services team to proactively onboard policyholders
Care Services manages outbound communications to policyholders who have submitted claims and inquired about new policies or offers
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5. PolicyholderOutreach
Targeted, relevant, and proactive policyholder outreach delivers increasingly personalized interactions
• Uses proactive chat invitations on website
• Decreases abandonment rates• Increases customer satisfaction• Adds significant revenue from specialty
insurance customers
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6. Analytics Platform
When insurers have a deep understanding of their target policyholder segments, they can more effectively manage personal interactions to drive acquisition
Knows when and what to communicate
Predicts when a customer might churn
Optimizes offers based on search history
Identifies when shoppers are ready for outbound calls
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6. Analytics Platform
When insurers have a deep understanding of their target policyholder segments, they can more effectively manage personal interactions to drive acquisition
• Conducts advanced direct marketing testing
• Uses analytics to test and define different audience segments
• Creates detailed profiles for each customer segment
Leading Insurance Company
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Unlock the value of “personalization” to drive significant improvements in acquisition
Personal interaction
drives 82% of policyholder’s
purchasing decision
1 2
3 4
5 6
1. Personalized Search Experience
2. Attribute Based Routing
3. Customer Call Scripting
4. Technology Platform
5. Policyholder Outreach
6. Analytics Platform
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Poll question
Which of the 6 pillars is the biggest opportunity for improvement at your company?
1. Personalized search experience2. Attribute-based routing3. Custom call scripting4. Technology platform5. Policyholder outreach6. Analytics platform
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5 pillars of customer retention
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Customers have lots of choice in insurers and are transient
The cost of acquiring new customers can be up to 10 times the cost of retaining existing ones
Even a small increase
in retention rates can add millions of
dollars to premium revenue
for insurersSource: SAS
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Personalized services and proactive outreach are two key factors that influence retention
Source: Accenture 2014, Forrester February 2012, Ernst and Young 2013, KBM Media Research July 2013
Attrition DriversWhat drives policyholders to
switch?
87%
80%
42%
23%
Retention DriversWhat drives policyholders to renew?
42%
35%
44%
43%
62%
Confidence in Relationship
Better Offer
Trust
Relevancy
Proactive Outreach
Lower Price
Lack of Personalized Services
Lack of Fair Handling of Claims
Lack of Feeling Valued
95%Policy Bundling
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Insurers that focus on policyholder engagement see better retention results
95% retention rate when policyholders
bundle their homeowner and auto policies with the
same insurer
Source: 1to1 Media and KBM 2013
Policyholders are more likely to consolidate
and purchase all of their existing insurance policies
when engagement is high
Policyholders are less likely to shop
around when engagement is high
Life Insurance
P&C Insurance
Consolidate and purchase all policies from insurer
4.04.9
5.7
Weak Moderate Strong Weak Moderate Strong
3.54.4
5.65.4 5.6
6.9Purchase additional insurance
products
5.8
4.9
3.2
Weak Moderate Strong
Shop around when it is time to renew your insurance policy
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And customer advocacy is high when customers are engaged with their insurance providers
Source: Forrester “Customer Advocacy 2013: How US Consumers Rate their Financial Service Firms”
RecommendRecommend an insurer to a
friend or colleague
DefendDefend insurers when others make
unfavorable comments about it
Weak Moderate Strong
3.83.6
5.3
7.07.1
5.0
Weak Moderate Strong
4.44.8
6.6
8.28.4
6.6
Life Insurance
P&C Insurance
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An integrated approach is necessary to retain existing policyholders and reduce churn
1. Know the Policyholder
2. Proactive Outreach
3. Handle Claims Fairly
4. Provide Relevant Offers
5. Value Policyholders
Five Pillars of Policyholder Retention
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1. Know the Policyholder-
Personalization
With 80% of a policyholder’s decision to switch determined by lack of personalized services, insurers must know their policyholders
Moments of Truth Journey Map - Knowing key events that drive need for personalized touchpoints:
• First Notice of Loss• Price Increase• Claims/Renewal Notification• Product Inquiry and Offer up-sell/cross-sell
Know the customer persona – e.g., his or her sales and communication preferences
Keeping in touch with their life events and customer episodes
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1. Know the Policyholder-
Personalization
With 80% of a policyholder’s decision to switch determined by lack of personalized services, Insurers must know their policyholders
• Conducted data asset inventory
• Created a set of “life stage” based target segments
• Created detailed profiles for each customer segment
• Customized segment messaging
• Optimized direct marketing program’s effectiveness
Leading Insuranc
e Company
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2. ProactiveOutreach
Almost 62% of policyholders are more likely to renew when they receive proactive outreach
Predictive Analytics
Churn Model
Response likelihood (propensity and channel)
Offer Optimization (LTV)
Lean Process Design
Triggering communication in key processes
Send tailored messages
Post-interaction customer care surveys
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2. ProactiveOutreach
Almost 62% of policyholders are more likely to renew when they receive proactive outreach
• Uses an automated system to improve customer interactions
• Sends outbound messages to customers who may be affected by adverse weather conditions in specific regions
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Since 42% of policyholders switch when claims are handled unfairly, those Insurers who handle claims well are more likely to see retention increase
First Contact Resolution
Technology to power outcomes
Attribute routing
Associate Empowerment
Segment-based associate training
Providing Intelligent Web Self Help
3. HandlesClaims Fairly
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Since 42% of policyholders switch when claims are handled unfairly, those Insurers who handle claims well are more likely to see retention increase
3. HandlesClaims Fairly
• Collects and analyzes customer data from social media, email, phone
• Assesses urgency and immediate damage
• Deploys first responders in times of crisis
• Resolves problems in a timely fashion
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With 43% of a policyholder’s decision to renew based on relevant offers, insurers need to engage their policyholders with the right offer at the right time
Communicate to policyholders according to persona
Optimizes offers based on customer LTV and sensitivity
Technology-Driven, Personalized Treatment Plan
Intelligent routing/connections
Custom engagement scripts
Retargeting ads to reengage customers
Single data environment
4. ProvidesRelevant Offers
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With 43% of a policyholder’s decision to renew based on relevant offers, insurers need to engage their policyholders with the right offer at the right time
4. ProvidesRelevant Offers
• Creates detailed profiles for each customer segment
• Customizes product offers and benefit statements messages accordingly
Leading Insuranc
e Company
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When policyholders feel valued by their insurance providers, they are less likely to switch
5. Value Policyholders
Associates who are advisors and advocates
Acting in the customers’ best interest
Professional treatment and recognition
Loyalty programs
Proactive decisions to make it right
Intelligently connecting the customer to right resource the first time
Making contact and engagement easy
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When policyholders feel valued by their insurance providers, they are less likely to switch
5. Value Policyholders
• Suspended premium charges when soldier customers were overseas
• Proactively sent out unsolicited refund checks to soldier- customers
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1. Know the Policyholder
“Personalization”
2. Proactive Outreach
3. Handles Claims Fairly
4. Provides Relevant Offers
5. Values Policyholders
Delivering a personalized Policyholder Experience will drive significant improvements in retention and reduce churn
An integrated approach to personalization will significantly mitigate the risk of policyholders switching providers
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Poll question
Which of the 5 key pillars is the biggest opportunity for improvement at your company?
1. Know the customer2. Proactive outreach3. Handles claims fairly4. Provides relevant offers5. Values policyholders
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Tackling the “Personalization Revolution” demands a proven methodology to deliver value
Assess Design Deliver Optimize
►Design acquisition & retention processes
►Create differentiated treatment strategies by customer segment
►Create roadmap for execution
► Roll-out live testing
► Develop reports
► Complete recruiting and hiring
► Complete training
► Go live
► Daily management aligned with best practices
►Refine execution
►Test and measure strategies and processes
►Recalibrate teams and solution as required
► Identify improvement opportunities
►Determine lifetime value of various customer segments to determine acquisition and retention priorities
►Define desired customer experience
Workshop
►Gather information about what the client is selling
►Understand the audience, market dynamics, & competitive situation
►Understand the value proposition
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Getting started: Acquisition & Retention workshop
TeleTech will present a 2-day workshop with organization stakeholders designed to understand the current environment with respect to the 6 acquisition pillars and 5 retention pillars. The discovery session will:
• Demonstrate the value of customer experience and the role of the acquisition and retention pillars to key organizational stakeholders
• Help TeleTech understand the opportunities for improvement across the 6 acquisition and 5 retention pillars
• Identify barriers to success, resources available and context with regards to strategic priorities
• Collaborate to identify potential next steps to impact the acquisition and retention pillars and – ultimately – build competitive advantage
Deliverables and Expected Outcomes:
TeleTech charges a $20,000 fee for this workshop
Acquisition• Current State Assessment & Initial Uplift
Forecast• Sales Strengths & Weaknesses Analysis• Operational Gap Analysis by Channel • Sales Optimization Prioritization Plan• Definition of potential next steps to move
the needle on the 6 acquisition pillars
Retention• Deeper understanding of imperative for
knowing the policyholder• Report Out on the current state of the
retention pillars across the enterprise and potential opportunities
• Definition of potential next steps to move the needle on the 5 retention pillars
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Q&A Session
Elizabeth GlagowskiEditor-in-Chief
Customer Strategist Journal
Jonathan GraySVP of Marketing
Revana
Weston McDonaldHead of Financial Services
TeleTech