future solutions in customer experience & retention

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Dr Avnesh Ratnanesan (Avi)CEO, Energesse

‘Future Solutions in Customer Experience & Retention’

A Research White Paper for the PHI industry

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Executive Summary

Background & Methodology

‘Systems Thinking’ in Customer Retention

Analysis of Industry Challenges and Responses

6 Major Solutions to Improve CX

Conclusions for PHI organisations

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Background Conducted in collaboration with 10 private health insurers, aimed to deliver better customer experience and retention

Lapse rates and switching peaked for many insurers in the 2014-15 year, Gen Y demonstrating greater propensity

Collectively, customer switch affects approx. $2bil worth of annual transactional value* (940,000 members changed policies in 2013-14 year)

Global trends - CX will grow in importance as a key differentiator (overtaking price and product)

Gap between what insurers believe is being delivered, and what customer need and want from their insurer

*PHIAC, Operations of PHI Annual Report 2013-14

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Methodology

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Analysing Customer Retention using ‘Systems Theory’

PHI industry is a complex with multiple interrelating challenges – over 45,000 policies, 30+ organisations

‘Systems Theory’ maps a set of practices/ root causes that are multifactorial, linked and have become dysfunctional over time – understand WHY problems recur

Organisations see problems e.g. customer retention as linear and implement linear solutions, rather than addressing cyclical root causes.

Solutions are ineffective or minimally effective to a degree, but if root causes are not addressed retention problems will persist

Internal and external causes need to be solved as a cohesive strategy, rather than ‘band aids’

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PHI Customer Experience Touch-points

Websites, Social Media, Online Communities,

portals

Call Centres Branches Mobile Events

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The Customer ‘Trilemma’ at Acquisition

“I can’t afford it”

“I’m afraid not to have it”

“I don’t really know what I’m buying” (and sometimes neither does the agent I’m buying from)

Triggers ‘Grudge purchase’ and causes ‘Buyers Remorse’

“Probability of a customer lapsing is double in the first 6 months” Rhod McKensey, Group Executive, Australian Residents Health Insurance

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Industry Forces Affecting CX

1. Customer confusion, affordability and lack of perceived value

2. Sub-optimal Systems, Processes and Data Management

3. Health System Dynamics

4. Regulatory Changes and Competitive Forces

“Health Insurance policies are now as complicated as mobile phone plans”

Brad Joyce, CEO Teacher’s Health Fund and Chairman, Members Own Health Funds

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Complex Systems Theory in PHI

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Objectives

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How do we resolve the Vicious Cycle in Customer Retention?

“The secret of change is to focus all of your energy, not on fighting the old, but on building the new”

– Socrates

(character from a book ‘Way of the Peaceful Warrior’ by Dan Millman)

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Objectives

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1. Define Vision, Strategy & Objectives

Unified vision of CX across all touch-points

Bold and courageous leadership to meet rapidly rising expectations – 5 year future view

Refine strategy with feedback loops from front line staff and senior managers connecting with customers directly e.g. ‘Customer Days’

1-2 ‘Big Bets’

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2. Align Leadership and Culture with Change Management

“Culture eats strategy for breakfast” – Peter Drucker.

HR and Comms team needs to drive and incentivise positive behaviours

Align KPI’s and incentives with actions, reward or recognise immediately where possible

Measure what you can manage

Tone and spirit of high performing teams cannot be replicated – hard and soft KPI’s

“Customer Experience is not hard, it is change that’s hard”

Harriet Wakelam, Head of Customer Experience, Medibank

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3. Implement Systems & Capabilities for CX

Understand drivers at a granular, emotional and personal level

Restructure to improve responsiveness e.g. customer segment business units? Change occurring at a faster rate e.g. Lean Six Sigma (20 years) vs NPS (5 years)

Integrate data capabilities into customer experience architecture

Predictive capabilities to understand ‘frustrations’, pain points before churn

“It’s about having the right people with the right culture or mindset. Combine that with the appropriate investment in technology that gives them the tools to do the job. But tools without attitude, and attitude without tools just doesn’t cut it”

Michael Bassingthwaigthe, AM, CEO Peoplecare Health Insurance

*Sample analysis with PanSensic Emotional Lens

% Customer Emotional Response National Frustration Trend National Delight Trend

4. Translate Perceptions into Priorities - Emotion Analysis

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4. Translate Perceptions into Priorities

5. Apply CX to portfolio, products & channels

*Sample analysis with PanSensic Mental Gears Lens

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6. Extend CX across Health Ecosystem

Map the ‘fault lines’ in the Customer Health Journey and address most relevant pain points

Medibank’s CareSuite, HCF and Healthways and NIB’s Whitecoat initiatives

‘Hospital to home’ and Telehealth options

In hospitals, assess Patient Experience (PX) along with Safety and Quality Measures

Conclusions - The ONE CHANGE…

If there was only ONE CHANGE you could make (that drives all other changes) ……

…….revise products, strategies, campaigns and projects around those insights

Start with truly understanding your customers’ perceptions (thoughts) and emotions (feelings) with data

i.e. WHY they behave the way they do

The ONE CHANGE to drive all CX changes

AREA OF NEED & FOCUS

Value (Outcomes, $$$)

Organisation’s cycle

Improved Customer Experience + Referrals + Revenue

1-10% 70-80% 1-10% 1-10%

Collect or Purchase Data and Research

Implement Solutions, Projects & Campaigns

Analyse data for Meaningful

Insights

Translate Insights to Strategies and

Solutions

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To receive a free copy now…

SMS 0438 614 233 (First, last name & e-mail)

avnesh@energesse.com

www.energesse.com/customer-experience