Programmed for customers

Competition is fierce in the insurance community. Struggling against increasingly fickle consumer behaviour, insurance companies are searching for the Holy Grail of customer loyalty while finding the balance of cross-?selling the right products to customers and tying them to longer term relationships.

Customer promiscuity is on the increase in every industry. The companies that gain from this are those that step up to the mark in terms of customer management.

Companies that put customers and their requirements at the centre of their businesses will be far more likely to succeed than those who rely on hard nosed sales tactics and uncoordinated efforts.

But managing customers effectively can be a daunting task and even some of the biggest companies struggle to do it effectively.

A precedent has been set by those companies managing consumers needs, that companies need to attain in order to make any lasting impression on? the customer.

Strong position
Customers are finally realising that rather than being at the mercy of their suppliers it is they who are in a strong position. Consequently they are demanding more. Insurance professionals need to realise this and meet the high service levels that customers are expecting.

But how can companies reach the required level in customer management and begin to build a reputation that makes them synonymous with high customer standards?

Customer relationship management (CRM) is a methodology used to interact with end users and as such, is an important tool in retaining customers.

Embracing the latest CRM technology is not optional, but essential if insurers want to remain a step ahead in the marketplace.

And it's not just the big multinationals that need to implement this technology. CRM is often associated with call centres, but has a much larger scope and should have a pivotal role in the customer management strategies of all insurance companies.

European companies are increasing their investment in CRM software to increase?revenues and grow their customer bases, according to analyst firm Gartner.

Chris Pang, a senior research analyst at Gartner, says the rise in spending on CRM software correlates strongly with the state of the economy with the European market growing to $1.9bn (£1bn) in 2005, a 9.7% increase on th?e previous year.

In the past, CRM h?as been an ambiguous term used to describe any customer interaction.

However, as it matures as a business and technological process, more insurance companies are beginning to realise that it refers to how a company manages its customers effectively, underpinned by carefully designed technology.

While there is no blueprint to CRM and no one solution to suit all insurance businesses, there are important factors that companies need to bear in mind in their approach to CRM. These include:

• Identifying factors that are important to clients

• Promoting a customer-oriented philosophy which resonates throughout the company

• Developing end-to-end processes to serve customers – a 360 degree view is essential in order to get a complete picture of the customer and make accurate inferences

• Providing successful and insightful customer support – letting a customer down when they need help most is often the death knell in a supplier/customer relationship

• Tracking all aspects of sales. This allows a company to gather effective intelligence on what works and what doesn't with different types of customer.

All companies would agree that customer relations is important, but achieving a successful CRM system is something that needs careful attention. CRM technology is now able to be fully integrated with other business systems.

Integration with the relevant marketing systems and client databases will ensure that there are more cross-selling opportunities for insurance professionals.

Previously a CRM platform would have been a stand-alone technology. Tying all systems together ensures greater efficiency, better sharing of data and less duplication of effort, which ultimately serves to save time and consequently money. This also gives the customer a better experience.

As with all technology, CRM is moving at a tremendous pace and the latest technologies enable companies to know their customers better than ever before.

The latest systems can improve business and customer interaction in a number of ways and can provide online access to product information and technical assistance around the clock.

New technology can also speed up processes, cutting costs through time efficiency and providing mechanisms for managing customer communications and on-going support.

CRM is constantly evolving and systems will become more sophisticated in the future.

As insurance companies strive to attain the competitive edge and attract and retain an increasingly fickle customer base, CRM will become core to the overall business strategy of the insurance community.

The outlay, in terms of resource, may seem daunting, but in order to survive insurance companies need to plough resources into an intelligent and effective approach to CRM. IT

Dmitry Loschinin is chief executive of Luxoft