Customer Relationship Management (CRM) is arguably the most debated issue when trying to define what it actually means and how it should be implemented. So what is CRM?
If you gathered 100 marketers together and asked them to describe what CRM means you would get 100 different answers, all perfectly acceptable to their own personal circumstances, but different nonetheless. So just to add to the confusion here's my two pennies' worth:
CRM is managing the relationship you have with your customer to enhance your brand, service, products or reputation with them, to enable you to do business with them more frequently, in a personalised fashion and through channels that they prefer.
CRM is about treating customers as individuals, communicating with them as individuals and providing services to them as individuals. Intelligent decision-making has to be the way forward for CRM – the ability to take information and use it to enhance the value of the customer in the client organisation.
In a perfect world this would be easy, but for most industries, and in particular insurance, I believe this will represent a real challenge. The reason I say this is because of the nature of the relationship between a broker/insurer and the customer. Is the relationship possible?
For most insurers and brokers I would suggest that, in the majority of cases, contact with a customer is once or maybe twice a year, usually to renew a motor or buildings insurance policy or to deal with a claim.
Compare this to the relationship a supermarket has with a customer. A supermarket you visit daily, weekly or monthly, you purchase multiple products and your interaction or “relationship” will include direct contact will store staff, your loyalty card, communication/offers via mail, purchasing by phone or internet and all of this on a regular basis. Supermarkets look at the frequency, recency and monetary value of your purchases and from this can customise offers and communications.
So, having made the comparison – can an insurer/broker really embrace CRM?
I believe the answer is yes. Maybe not in the same way that a supermarket would approach it, but insurers and brokers can maximise their customer relationships by embracing the basic elements of CRM to improve the communication, loyalty and profitability of its customers.
Information is the key
No matter how CRM is viewed it is information that underpins all CRM strategy. Information has to be obtained, stored and analysed in order to be able to treat customers as individuals. This information is invaluable in:
Customers once segmented can be treated much more as individuals whenever they make contact with you, providing the information can be used at any customer “touchpoint”.
Marketers embracing CRM have a number of key issues to deal with, for example: