7 ways to get closer to your customers - TIA Technology A/S ?· White Paper 7 Ways to get closer to…

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<ul><li><p>White Paper 7 Ways to get closer to your customers</p><p>Closer to Customers</p><p>Closer to Customers</p><p>7 ways to get closer to your customers</p><p>White Paper</p></li><li><p>White Paper 7 Ways to get closer to your customers</p><p>Closer to Customers</p><p>Closer to Customers</p><p>Page 2 of 22</p><p>Contents</p><p>Introduction: Whatever your business strategy focuses on, make sure it is customer-centric 3</p><p>1. Create a platform for engagement that fuels dialog with your customers 5</p><p> Dont be a stranger 5</p><p> Two critical factors for engagement 5</p><p>2. Improve customer satisfaction by optimizing your claims processes 8</p><p> Your customers moment of truth 8</p><p> How to balance fraud management with prompt claims settlement 8</p><p>3. Give your front-line people the information they need to get more out of customer interactions 11</p><p> Why your customers think you dont really care 11</p><p> A 360 customer view helps you score business goals 11</p><p>4. Get a clear view of individual risks and profitability in order to offer more benefits to the customers 13</p><p> An offer they cant refuse 13</p><p>5. Meet the customer where the customer is (different channels for different steps in the Insurance Value Chain) 15</p><p> Your customers do business digitally, do you? 15</p><p> How do you meet your customers where they are? 15</p><p>6. Offer the customer the right product configuration quickly 17</p><p> One eye on the customer and one on the competition 17</p><p> From months to days 17</p><p> An example: When products become differentiators 17</p><p>7. Give your customers a role in your pricing strategy 19</p><p> Put your customers to work for you 19</p><p> An active role 19</p><p> An innovative example: Name your price 19</p><p> About the authors 21</p><p> About Tia Technology 22</p><p>TIA Technology A/S Bredevej 2DK-2830 Virum T +45 7022 7620 F +45 7022 7621 W tiatechnology.comE marketing@tia.dk</p></li><li><p>White Paper 7 Ways to get closer to your customers</p><p>Closer to Customers</p><p>Closer to Customers</p><p>Page 3 of 22</p><p>Introduction: Whatever your business strategy focuses on, make sure it is customer-centric</p><p>Why you need a customer-centric strategyMaintaining good relationships with an insurance customer is like raising a baby. Their behavior changes rapidly. You simply cannot ignore their needs, and the way you deal with them affects the health of the entire family or in the case of your business the health of its bottom line. </p><p>The insurance industry has the highest new customer acquisition costs of any industry.1 Whats more, customers buying behavior is changing, and they are not necessarily loyal. Today, 53% will compare offers (often using social media to shop around and purchase via the web or a mobile phone). There is no doubt that this lack of loyalty is expensive. Insurers lose around 20 percent of their customers each year, resulting for example, in over 4 billion euro of losses in the private motor and home insurance markets.2 On the other hand, a 1% increase in customer retention can increase annual premiums by close to 800,000 euro.3</p><p>Your interactions with customers are critical to meeting your business objectives. Regardless of whether your strategy focuses on distribution and customer service, operational excellence or product optimization, your customers need to be in focus. </p><p>1 Rough Notes magazine, 20122 Accenture survey, 20113 Insurancetech.com, 2012</p><p>Sales/Customer</p><p>Service</p><p>Operational Excellence</p><p>Product OptimizationCustomers</p></li><li><p>White Paper 7 Ways to get closer to your customers</p><p>Closer to Customers</p><p>Closer to Customers</p><p>Page 4 of 22</p><p>In this whitepaper, we take you through seven ways to get closer to customers. Each section covers the challenges you face, the changes you need to make in your organization and the benefits you will derive. We also link those benefits to overall business objectives. </p><p>In some cases, we draw your attention to how an insurance solution can support these changes. Examples and screenshots from the TIA solution are used. This is to make it more clear and concrete for you. Yes, we work for TIA, and we believe that our solution has some unique benefits, especially when it comes to customer-centricity. Nevertheless, the principles in this white paper can be used independent of any given technology or solution.</p><p>We hope you get a lot out of it, and wed love to hear from you with feedback or questions. You can write us at marketing@tia.dk</p><p>Steen Vingaard Larsen, Business Advisory Director at TIA Phone: +45 24943605</p><p>Martin J. Ernst, Business Consulting Director at TIA Phone: +45 29911122</p></li><li><p>White Paper 7 Ways to get closer to your customers</p><p>Closer to Customers</p><p>Closer to Customers</p><p>Page 5 of 22</p><p>1. Create a platform for engagement that fuels dialog with your customers</p><p>Dont be a strangerIf your company is like most insurance companies, you do not have many points of contact with your customers. In fact, you may only engage in dialog in a claims situation or in connection with annual or renewal payments and those interactions do not relate to the needs of the customer. So, if you are communicating with your customer infrequently (and often in situations the customer per-ceives as negative), how can you anticipate their needs and keep them satisfied? </p><p>The answer is to engage in a much more frequent and relevant dialog with your customers in order to learn their needs and respond promptly. That is all very well and fine, you say, but how do I in-crease the number of opportunities to engage in dialog? </p><p>Two critical factors for engagementThere are two key actions you can take to create contact points and engage with your customers: customer milestones and incentives. A prerequisite to these two actions is accurate and accessible customer data. Customer data is used to identify milestones, trigger an action and offer the cus-tomer an incentive for engaging in dialog. </p><p>1. MilestonesIf you have the right customer data in your system, you can identify critical points in the customer lifecycle. These are milestones where a need may present itself a need that can be answered in the way of information, advice, and ultimately, a concrete offer. Examples of these critical points are when the customer moves away from his or her childhood home, gets a driving license, moves or travels abroad for a longer period, marries or moves in with a partner, has children, gets divorced or loses a spouse. Each of these milestones represents an opportunity to engage. A similar lifecycle approach can be applied to commercial customers by identifying company milestones that trigger different insurance needs and advice.</p><p>2. IncentivesThe dialog you initiate must offer the customer a clear benefit. Otherwise, you can attempt to en-gage all you want, but you wont get a response. On the simplest level, this benefit could be nothing more than advice. It will, however, only be perceived as a benefit if the customers feel that they are getting impartial advice. Naturally, they are aware that the person they are talking to represents an insurance company and, at the end of the day, wants to sell them something. Nevertheless, the tone of the conversation can be crucial. If your people recognize that this is an early point in the sales cycle, and the customer feels that they are getting help rather than being sold to, it could make a big difference in the ultimate outcome. </p></li><li><p>White Paper 7 Ways to get closer to your customers</p><p>Closer to Customers</p><p>Closer to Customers</p><p>Page 6 of 22</p><p>A prerequisite: Customer dataIn order to engage, an insurance solution that stores the relevant data and makes it accessible when required is needed. This solution should make it possible to store the right customer data across functional areas and to set up certain actions that will be triggered by the system. For example, when the customers child approaches the age when they begin to learn how to drive (a milestone), you could engage in dialog regarding their car insurance policy. This could be in the form of an email, letter or telephone call. Whats more, when the initial contact is personalized based on the data in your system, it has a greater chance for success.</p><p>A customer-centric solution makes it easier to handle the entire customer lifecycle and the entire value chain. It provides insight that frees resources to focus on business development.</p><p>Innovation: An interesting example of how to encourage ongoing dialogThe benefit you offer when a customer has a milestone can be much more than giving advice. It could come in the form of the offer itself. This could be a traditional time-limited offer, for example. It could, however, also be of a more innovative nature one which promotes ongoing dialog. For example, the Ingenie insurance company offers a product for drivers in the age group of 17-25. </p><p>They install what they call the Telematics box in the customers car (at no extra cost). The Telemat-ics box automatically assesses the customers driving trends. The customer goes about their normal driving habits with no special rules or restrictions, and they receive regular feedback. The cost of insurance is reviewed every three months, thus opening up for ongoing dialog. The incentive is that if they drive well, customers could pay less. </p><p>Customer</p><p>Task Management</p><p>Risk &amp; Investment</p><p>Customer &amp; Policy Servicing</p><p>Claims Management</p><p>Collection &amp; Disbursement</p><p>Marketing/ Segmentation</p><p>Sales &amp; Underwriting</p><p>Product Definition (product variants) </p><p>Business Process Management</p><p>Sales &amp; Marketing</p><p>Business Utilities </p><p>Performance Management</p></li><li><p>White Paper 7 Ways to get closer to your customers</p><p>Closer to Customers</p><p>Closer to Customers</p><p>Page 7 of 22</p><p>The Ingenie car insurance product offers an incentive that promotes continuous dialog.</p><p>SUMMARY</p><p> Challenge: Few points of customer contact make it difficult to anticipate and meet customer needs </p><p> Enabler: Set up milestones in your insurance solution that trigger certain customer-engagement actions based on their behavior</p><p> Necessary change: Engage in a much more frequent and relevant (for the customer) dialog in order to identify needs and respond promptly</p><p> Benefits: Increase customer retention and revenue by way of proactive dialogs that enable cross-selling and up-selling</p><p> Business objective: The business objective focuses on sales and customer service, thus having a positive effect on the top line</p></li><li><p>White Paper 7 Ways to get closer to your customers</p><p>Closer to Customers</p><p>Closer to Customers</p><p>Page 8 of 22</p><p>2. Improve customer satisfaction by optimizing your claims processes </p><p>Your customers moment of truthThere is no contest. Claims settlement is not only the largest cost-driver for an insurance company, it is a critical factor in your customers perception of, and level of satisfaction with, your company. Recent research from Celent underlines a fact that probably wont surprise you: customers who reg-ister a claim are much more likely to change insurance providers.5</p><p>Another interesting finding has to do with the balance between fraud management and prompt payments. Customer satisfaction is clearly linked to the speed and value of settlement. However, in order to settle quickly (or flag as fraud), each case must be processed at the right level of detail. </p><p>Naturally, an accurate claim paid quickly is best for all parties in theory. Your customers feel posi-tive about your brand and as long as the claim is accurate your organization benefits by getting it taken care of as quickly as possible, as well. Yet as you well know, it is not possible to process every claim quickly and still maintain a viable business. Your customers may not like negotiating the value of the claim or having it disputed, but the fact is that for whatever reason, some of them feel the need to inflate its value. </p><p>How to balance fraud management with prompt claims settlementA customer-centric framework allows you to reduce resources while still feeling confident about your decisions. It uses customer data and a scorecard system to balance fraud management with </p><p>5 Celent survey 2012</p><p>Low</p><p>Low</p><p>High</p><p>High</p><p>Likelihood of fraud</p><p>Speed of settlement</p><p>Customersatisfaction</p></li><li><p>White Paper 7 Ways to get closer to your customers</p><p>Closer to Customers</p><p>Closer to Customers</p><p>Page 9 of 22</p><p>prompt settlements. The majority of your claims are handled by the system automatically and promptly via direct processing, while others require human interaction.</p><p>The rules set up in your insurance solution allow you to automate some claims and flag others based on a solid foundation of customer data. You use the data to set up a process for fully automating straightforward claims and marking others for possible fraud. The faster you settle, the more satisfied your customer will be. Whats more, satisfied customers have less of a tendency to make additional claims. </p><p>Even more importantly, you can capitalize on this expected satisfaction by carrying out a courtesy call. What is more, as the caller has naturally prepared for the call by doing a white space analysis or even been given a next-best product suggestion by the system, this is a golden opportunity to up-sell or cross-sell to this customer. </p><p>1. Customer dataA framework based on the customers own input of data facilitates a system for balancing fraud management with prompt claims settlement. This allows for the possibility of the customer entering their claim via a self-service area on your website. It is, however, important to note that some cus-tomers do prefer to initiate their claim via personal contact on the phone. So, they should also have that option. Whether the initiation of the claim process is completely automated or involves human contact at the start, however, the actual processing can be automated. This saves time and reduces the amount of resources used on this task.</p><p>2. Scorecard systemWhereas the input of customer data represents one part of the framework, the other part is based on your own professional guidelines. A scorecard system is used for flagging possible fraud when a certain threshold is reached. This scorecard system can be a simple rules-based system where a number of rules are defined. If these rules are violated, the claim pops up as a referral. The rules are typically defined based on a combination of statistics and the expert input of very experienced claims handlers. </p><p>The other solution is a scorecard that uses historical claims data to predict the likelihood that a given claim case is fraudulent. Here you set the threshold values for when a claim is acceptable (in this case, straight-through processing for automatic claims settlement can potentially be used), when it should be referred for further investigation/information, or when it is a potential case of fraud. </p></li><li><p>White Paper 7 Ways to get closer to your customers</p><p>Closer to Customers</p><p>Closer to Customers</p><p>Page 10 of 22</p><p>SUMMARY</p><p> Challenge: Customer satisfaction is closely linked to how fast and how correctly their claims are settled, but business considerations require that prompt settlement is balanced with effective fraud management</p><p> Enabler: A policy administration platform accessed by customer service representatives via an intuitive web user interface pr...</p></li></ul>