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How providers can improve client experience

How many protection providers can say they can measure the drivers for any given customer decision?  How many can go on to predict changes in product adoption following, say, a change in the retirement age or even a fall in consumer confidence?

Perhaps the most powerful contribution that decision sciences can play is the ability to continually track customer behaviours in light of changes in the market, customers’ personal circumstances or in response to changes in the wider economy.

It’s perhaps not surprising that many organisations struggle to make sense of the vast quantities of customer data that they now capture.   As well as presenting a storage and compliance challenge, these valuable insights can, if interpreted correctly, unlock real competitive advantage for the provider.

The key is to transform data streams into real customer insight and then apply business processes to unlock added-value opportunities and new business.

In retail banking and general insurance many have heard the virtues of decisions science extolled.  Largely as the application of advanced analytics has automated and optimised customer relationships, driving greater returns from customer management, the supply chain and even product development.

Why then is the protection market one step behind its peers and what can it do to catch up?

There are four key considerations:

Capture the right data

It is important that any business decisions are based on solid, reliable and useful data.  Fortunately the protection market has an abundance of information but it must focus on the useful elements and put processes in place to gather more vital data that might be lacking.

An absence of information means that decisions are less reliable. It also adds cost and wasted time which result from the multiple customer interactions that could have been avoided.

See the wood for the trees

Once you have the information you have to understand the patterns and trends that are locked within the data.  Finding these insights is of course more complex than it appears.  Put simply, it requires an investment in time to compose the right questions that cause the data to reveal its secrets.  Frequently this means the composition of sophisticated statistical techniques and bespoke algorithms.

Close the loop and inform the business

The benefits of decision science are only felt when this insight is used to shape the way products and services are marketed, priced and delivered.  Smart use of information can improve many aspects of the way a provider delivers service:

·     Customer segmentation

  • Customers with a greater propensity to take up protection can be identified and triggers can be isolated so that sales and marketing activity becomes much more effective
  • Key customer segments, with measurable lifetime value can be isolated. In this way groups who represent the more attractive risk, based on a wide range of factors such as age and gender, postcode, occupation, existing covers and family status, can be identified

·     Marketing

  • Once you know which customer groups consume which products and respond to which triggers it becomes a lot easier to develop the channels that can reach and influence them – for example intermediaries versus direct routes
  • This can even provide insight at a personal level.  Segment A responds to direct mail and not text but segment B prefers telephone interactions?  No problem, just refine the campaign accordingly
  • Data greatly improves a provider’s ability to identify adjacent white labelling opportunities. A wide range of companies customer insights’ can unlock even richer interactions, risk profiling and propensity segmentation.

Watch and learn

The ability to capture, refine and harness data is one of the most strategic levers a provider has.  Used correctly it can help understand, pre-empt and respond to customer needs and provide real competitive advantage.

Stuart Hayman is senior business consultant at Vertex.

 

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. I have never seen jargon as prolific as this in a long time. My previous ocupation was sales and marketing eventually as Marketing Director for a large organisation. For 25 years I have now been in Financial Services.
    Yes you do need information from research to develop a plan of action. Shoveling out large chunks of boring jargon spew will not achieve this.
    Comunication is the biggest problem in research and business, jargon buzz talk does not acheve this. Stuart you must learn to comunicate if you want feedback.

  2. At least he’s approached it with an open kimono, isn’t trying to build a chestnut fence to keep the sand dunes in!!!

  3. “Customers with a greater propensity to take up protection can be identified ” – yep, their the ones who apply for it! Genius….

  4. Of course good communication always starts with accurate spelling Jack!!!!

  5. Talk about trying to teach granny to suck eggs! If advisers or indeed any business owner does not “understand their customer” they deserve to go out of business!
    Segementation & customer profiling are key to any business……….

  6. I thought propensity meant: ‘a natural inclination’ as opposed to people that had already acted.

    And aren’t a lot of business owners going out of business for precisely the reason that they don’t understand their customers? I’ll fetch some eggs…

  7. Chris Darlington 28th January 2010 at 3:58 pm

    Why the long face Lionel? In my experience most large organisations suffer from the problems Stuart discusses… legacy systems, acquisitions and diversification often means these organisations don’t know the true value of their existing customers and fail to exploit them to their benefit.

  8. I work with Stuart and as someone honoured enough to call him ‘colleague’, nay, ‘Friend’, I can only say that He is a visionary and a true legend in the world of Finance.

    We should all take his word as fact and follow him into the future.

  9. As a fellow Leading Industry Professional I enjoyed benefiting from Stuart’s insight into this fascinating topic.

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