Superior Customer Marketing for Insurance Providers:The CMO Agenda

Moments matter.

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Individuals are more connected and empowered

Increased consumer expectations Different ways to engage digitally Expanded information transparency

Operations and business models are being transformed

Redefined consumer value Integration across digital with physical Concerns around risk, security, compliance and

privacy

Competition is coming from new and different areas

New competitors Changes in value migration; new winners and losers New types of collaboration

Business Challenges

Business Challenges

Business Challenges

Mobile revolution

Social media explosion

Cloud Enablement

Power of analytics

Forces of Change

Source: 2011 IBM Digital Transformation Study, IBV Analysis

Digital forces are driving customer demand for change in the insurance industry

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Source:[1] IBM Student Study: Connected Generation Q5. “To what extent should organizations change to meet consumer expectations?”; [CEO Q9] [2} “Winning Strategies for Insurers” IBV Study

New technologies enable consumers to expect and obtain more than ever before

81%Improve response time

76%Understand individual needs

68%Harmonize consumer

experiences

68%Increase transparency

61%Support participation in

product life-cycle

50%

What should organizations focus on to appeal to millennial consumers?1

Power is shifting to insurance policyholders

of insurance industry leaders use social media to communicate with policyholders – almost 2X as much as non-leaders

72%

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Most insurers have not begun preparing for the big changes ahead

Source: [1] 2013 C-Suite Study, CEO POV B4: “What kind of digital strategy does your enterprise have?” (n=243); [2] 2013 C-Suite Study, CEO POV B1: “To what extent do you agree with the following statements about your enterprise’s capabilities?” (n=243); [3] 2013 C-Suite Study, CEO POV B5: “Which of the following are the most significant challenges to implementing a digital strategy within the enterprise?” (n=243)

of insurance CEOs see consumer influence on their business strategy

39%of insurance CEOs have an integrated physical and mobile strategy

38%of insurance CEOs say they have a cohesive social strategy

34%of insurance CEOs believe their mobile strategy enables them to conduct business regardless of location

33%

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IBM Commerce brings it all together, integrating customer engagement to insurers’ value chains

Provide a seamless Brand

experience

Manage risk

Reshape internal and ecosystem operations

Gain customer insight

Personalize relationships

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IBM Commerce addresses the Insurance CMO’s agenda

Identify customer

preferences and trends in context

Use advanced analytics to improve decision making

Provide consistent Brand experiences

across the entire ecosystem

Engage customers throughout the

customer lifecycle

Create a seamless omni-channel

marketing experience

Stimulate customer conversations and new relationships using new digital

channels

CMO Agenda

CUSTOMER UNDERSTANDING

SMARTER MARKETING

SEAMLESS BRAND

ENGAGEMENT

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2013 2011

In this empowered consumer era, CMOs plan to accelerate the introduction of technologies to better reach customers

Source:Question CMO7–What is your plan around the usage of the following technologies over the next 3 to 5 years?; IBV Study, “Analytics: The Real World Use of Big Data”

Intended use of digital technologies (3–5 years):Across industries

Mobile applications

Content management

Search engine optimization

Customer relationship management

Collaboration tools

Reputation management

Email marketing

Advanced (predictive) analytics

Insurers

of insurers’ Big Data initiatives are driven by improving customer experience through a better understanding of customer behaviors

47%94%

66%

94%80%

89%81%

87%68%

81%73%

80%62%

79%63%

47%46%

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You need to enhance Customer Understanding through comprehensive insight into customer behaviors and preferences with Customer Analytics

FROM TOBest Guesses Precise Predictions

CMO

23

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Understanding insurance customers in the digital era requires analytics that span modes of customer interaction

Drive highly focused customer interactions across all phases of customer experience lifecycle

Acquire profitable customers

• Engagement patterns

• Engagement preferences

• Buying intention

• Sentiment

• Buying intention

• Product preferences

• Buying patterns

• Peer recommendations

Cross-sell and up-sell

• Customer journey

• Customer struggles

• Customer experience

• Feedback and social comments

Reduce cost to serve

• Relevant engagement

• Reduce struggles

• Proactive responses to sentiment

Increase retention, loyalty and

engagement

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Insurance industry marketers need to understand what is working – and what isn’t – before, during and after purchase

68%

56%

48%

48%

43%

42%

41%

33%

28%

27%

22%

27%

38%

48%

47%

55%

50%

50%

57%

63%

60%

59%

4%

6%

4%

6%

3%

8%

8%

10%

9%

13%

19%

0 50% 100%

How people become aware of your brand or website

Where people come from before visiting your website

What types of content make people more likely to buy or convert

The value of visitors from different sources of traffic

Why visitors make a purchase or convert

What usability issues are most likely to affect the conversation

What they are most likely to do on their first visit

How visitors behave on different devices (for example, desktop, laptop, tablet, smartphone)

Why visitors leave the site without converting

Why people abandon the shopping cart or transaction

Behaviors of different visitor types (men, women, frequent visitors and so on)

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IBM’s customer analytics solutions offer unified views and analytics across modes and channels of customer interaction

Anticipate and delightPredictive customer intelligence solutions

WHAT IS HAPPENING

Provides quantitative insight by capturing website and mobile interaction data and providing easy-to-use interfaces showing:

• Purchase funnels• Real-time sales data• Traffic flow through site• Conversion benchmarks

WHY IT IS HAPPENING

Provides qualitative insight by capturing, replaying and analyzing individual user web and mobile interactions:

• In-page context (including dynamic, personalized experiences)

• Each user interface interaction• Error messages displayed• Identify affected visitors

WHO IS TALKING

Provides powerful listening and analysis platform across social networks and communities:

• Assess social media impact• Segment social media audiences• Identify relevant relationships• Discover new ideas and risks

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Customer Analytics for Insurance goes beyond policy and demographic data to develop a deep understanding of customers profitability, preferences and lifecycle needs

• Increase Revenue

• Improve Customer Satisfaction & Retention

• ImproveCross-Sell/Up-Sell

• LowerMarketing Costs

• LearnCustomer Attitudes

Enables you to

• Deploy web and social network analytics as a source of valuable insight

• Understand and anticipate customer behavior across all channels

• Recognize what products attract each customer segment

• Manage the optimal balance between service and cost of delivery

• Predict churn risk, customer satisfaction and customer lifetime value

• Improve service levels and knowledge of front-line employees

Analytics

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You can achieve Smarter Marketing by igniting customer relationships with Omni-Channel Marketing, Real-Time Personalization and Digital Marketing

FROM TOOne Size Fits All Relevant Offers

CMO

13

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Within insurers, marketing silos are still the norm

Customers

Social

Search

Advertisement

Web

Mobile

Email

Phone

Agents

Brokers

Financial Advisors

Direct mail

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What if your marketing efforts resulted in?

Improved customer value, loyalty and retention5%–15% increase is typical

Higher campaign ROI15%–30% increase is typical

Increased response rates10%–50% increase is typical

Other business metrics improvementsrevenue, profit, others vary by industry (assets under management, basket size, # products owned, etc.)

More campaigns with the same resources2–5x increase is typical

Reduced cycle time for marketing efforts40%–80% reduction is typical

Reduced marketing costs20%–40% reduction is typical

Lower customer acquisition costs25%–75% reduction is typical

More effective marketing More efficient marketing

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IBM’s Omni-Channel Marketing solution enables insurers to engage customers in context at every point in the purchase lifecycle

eMessage

Xtify mobile messaging

Deliver

Campaign

Interact

Contact Optimization

Decide

Campaign

Analyze

Marketing Planning

Engages customers in a one-to-one dialogue across channels

Marketing Operations

Interact

Contact Optimization

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IBM’s Real-Time Personalization solution bundle enables insurers to take full advantage of every customer interaction and life stage

Enabled through:

Outbound offer personalization

Inbound offer personalization

Content and product personalization

Omni-channel campaign management and execution, including mobile customer engagement

Maximize all types of real-time engagement

across channels

Use response data to refine and optimize future decisions—

automatically

Directly engage in offer design and creation

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IBM Digital Marketing helps insurers improve engagement, conversion rates and revenue through targeted and personalized digital marketing automation

Personalize site, mobile, emailAutomate marketing with omni-channel campaign management for digital channels

IBM Marketing Center &Xtify solutions

Make it easier• Speed time to deployment thanks to

a cloud-based solution• Adopt quickly with ease of use

Automate recommendationsIncrease engagement, conversion rates & cross-sell revenue

IBM Product & Content Recommendations

Create rich content and manage marketing operationsFuel personalized marketing programs

IBM Customer Experience Suite and IBM Marketing Operations OnDemand

Grow limitlessly• With the full Omni-channel Marketing

solution• With the Customer Analytics solution

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Smarter Marketing drives higher marketing returns for insurers

Increase in conversion

rate on recommended products

250%

Business Outcomes:

Improved customer value, loyalty & retention5-15% increase is typical

Higher campaign ROI15-30% increase is typical

Increased response rates10-50% increase is typical

Improvements to other business metricsrevenue, profit, assets under management, # products owned,

etc.

Digital MarketingReal-time Personalization

Omni-Channel Marketing

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IBM Commerce provides solutions that span all phases of the brand experience across all channels of interaction

Seamless Brand Experience

Omnichannel Customer Engagement

B2B Commerce

Real-Time Personalization

Digital Marketing

Customer Analytics

Omnichannel Marketing Customer Experience for Service

Multi-Enterprise Process Collaboration

Governance, Risk & Compliance for Critical Corporate Data

Service Sales Pre-Purchase

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IBM provides critical enabling solutions for Insurance providers

Analytics

Social

Cloud

Mobile

Security

Accelerate alignment across the commerce value chain

Increase business agilityand enhance customer value

Leverage collaborative business networks

• Extend digital interaction and visibility into customer behavior to include social

• Deepen the brand relationship with social interaction• Establish a new marketing/sales channel

• Leverage the power of instant community• Accelerate speed to value• Onboard users faster• Scale to meet your needs• Create a global “anywhere” platform

• Broaden customer insight to include structured and unstructured data

• Understand interests, tendencies, behaviors,…context• Become more relevant and essential

• Address consumer expectations for mobile interaction• Extend digital into the shopping experience• Extend the brand relationship to the most intimate

communication channel

Secure transfer of data amongst ecosystem partners/ service providers

Secure management of cloud data

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Trademarks and notes

IBM Corporation 2014IBM, the IBM logo, ibm.com, Emptoris and Global Business Services are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with the appropriate symbol, these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml.Other company, product, and service names may be trademarks or service marks of others.References in this publication to IBM products or services do not imply that IBM intends to make them available in all countries in which IBM operates.

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Thank you.

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