New opportunities for transparency

A Steria White paper

New opportunities for transparencyUsing social networking to reduce costs and establish long-term positive customer relationships.

è www.steria.com/uk

Two models for calculating savings and benefits

Table of contents

Executive summary 3

Creating trust and loyalty 4

What is happening to my claim? 4

Customers are not the enemy 5

Social network technology – a cost effective solution? 6

Opportunities for using social networking 6

How does a private social network work? 6

An add-on not a replacement for your current systems 6

Attracting customers to your social network 6

The customer journey 7

Different views for different people 8

Customer 8

Third parties 8

Insurer 9

Conclusion – Making the right choice 10

Adding up the benefit – a savings model 11

Adding up the saving – a benefit model 11

02 | New opportunities for transparency è www.steria.com/uk

Why do customers still struggle when it comes to dealing with large commercial organisations on matters of importance to them? There is a genuine lack of access and quality of service, with insurers having a particularly bad reputation for being difficult to communicate with. Can social networking technology provide a solution?

This paper discusses the nature of the problem and the opportunities presented by social networking. It sets out a customer journey and the role of social networking in the customer development processes.

What does a good social network look like? How does it support transparency between customer, insurer and third party suppliers?

Finally, it offers simple measures of the savings and benefits that could accrue through the inclusion of social networking in your customer engagement strategy.

Executive summary

The ease, speed and ubiquity of mobile communications give the potential for improved customer contact through open access to information. Yet despite knowing that mobility has raised customer expectations as never before, organisations are failing in the basics of effective communications.

New opportunities for transparency | 03è www.steria.com/uk

“ Why do customers still struggle when it comes to dealing with utilities or large commercial organisations on matters of importance to them?”

However when it comes to dealing with large commercial organisations on matters of importance (to the customer) there is a genuine lack of access and quality of service. Communication is either one sided using a website or frustrating when trying to get through to a call centre.

Insurers have a particularly bad reputation for being difficult to communicate with when customers want to find out what is happening. While a few insurers have implemented a process of sending text messages to the customer on completion of certain stages of a claim, this is just a small step in the right direction and still a one sided activity.

Inefficiency, poor IT systems and lack of customer knowledge: all make it difficult for the insurer to provide high quality service and contribute to the fear of exposing to the customer the poor quality of the insurer’s administration system.

Most insurers are not deliberately hiding information or making it more difficult for their customers to interact with them. It’s just that their IT legacy is a huge obstacle standing in the way of seamless customer contact allied to a corporate fear of too much transparency. Incompetence and inefficiency become more obvious as the company becomes more transparent.

The pressure on the truly transparent organisation to maintain a consistently high level of service and information access works to both increase its reputation with customers and lower its costs by focusing on being highly efficient.

What is happening?

• Customers want a quick and easy way to find out what is happening and to deal with their requests or questions.

• Insurers want a low cost automated way of dealing with customers desire to know what is happening.

The insurer’s technology often restricts what the call centre operator can tell a customer. After multiple key selections and long waiting times on some insurers’ claims lines, customers still end up talking to someone who doesn’t have access to the claims system and can’t give the information needed.

Is there anyone who prefers to press a series of keys in response to an ever growing list of options offered by an impersonal recorded voice, rather than simply saying to a person “Can you put me through to someone who knows about my claim”? Yet the practice seems to be increasing all the time.

It is well known that communication is the key to any successful relationship, business or personal. It is ‘what’ you communicate that is important. For example, if a customer making a claim for broken window panes had access to certain simple pieces of information, such as “when will the glazier come to fit the new glass?”, it would eliminate the vast majority of call centre requests for information about progress of a claim or a complaint. This would reduce the wait time for customers who need advice or emergency action associated with their claim. And, of course, it would cut call centre operational costs.

The transparent organisation creates trust and loyalty in its customersCommunication with customers is fundamental in developing a successful long-term relationship. Customer’s use of mobile technology is so common in their regular daily lives that virtually everyone’s expectation is that they can find out what they need immediately with one quick call or web search.


“ It is well known that communication is the key to any successful relationship, business or personal”

Giving customers easy access to the right information when they want it will transform a complaint or claim. It suddenly becomes a positive experience that creates the basis for an on-going special relationship.

Dealing with a problem or a complaint in an open, professional, positive manner always has a far greater effect than if business just runs as smoothly as it is supposed to.

It is the exceptional that customers remember and tell other people about. Although statistics show that the number of people who share disaster stories far outnumbers the people who have reasonable or ordinary interactions, if someone has an unusual, unexpected or exceptionally good experience, they will share that with just as many people.

Customers are not the enemy

Allowing a customer to get past the traditional boundaries can be a scary prospect. Nevertheless those insurers who do this will gain a huge advantage over those who continue to man the barricades and treat customers as if they were the enemy.


“ It is the exceptional that customers remember and tell other people about”

Social network technology offers a new model for a transparent way of sharing information with customers. The technology is increasingly familiar and the number of users is growing exponentially. It is simple to use, available when you want it and can bring together a wealth of information in a single place. Customers are using this style of communication every day in their personal interactions; they want to be able to use this same approach when dealing with their insurer.

Insurers too are starting to gain experience with social media. Primarily they are establishing a presence and using this for marketing and sales.

Opportunities for using social networking

The social network succeeds when there is a common interest that gives a reason to access a community. For insurers, establishing this common interest is not easy. The typical social networker’s perception is that the insurance company is only present on the social network because they want to sell policies. In terms of the insurer’s end game this is, of course, true. So how can you turn this scepticism into a positive social network experience for all concerned?

The successful use of social networking will be driven by providing insurance customers with information they are interested in. For example, positive candidates for a social network approach are claims and complaints. Both are opportunities to engage directly with the customer and provide them with a good experience that turns a potential negative situation into a positive event.

Naturally, the personal nature of a claimant’s information means that the network required here is not the generic ‘open to friends and family’ type. Instead, it is what is often referred to as a private social network. These are available from Facebook and other major social network

providers but for sensitive insurance business use privately hosted networks and activity streams will be the norm. These interactions will be the entry point to establish the customer relationship and for the insurer to seamlessly entice the customer into their public social network presence.

How does a private social network work?

Keep it simple. Like most of the best and successful solutions, simplicity is essential.

• Private social network software is hosted by the insurer or a specialist provider to give general internet access.

• Members of the social network who may provide services to customers such as Garages, Credit Hire Organisations, Builders, and Glaziers are identified and contact details established. They are given access to the private social network through an app that will work on their PC or mobile device.

• When an event such as a claim or a complaint occurs the relevant parties in the social network are notified to follow the event.

• At the same time the customer is provided with the information needed to find their version of the app and given access to the event in the private social network.

Thereafter any communication between members of the social network related to this event takes place through the social network.

These communications are not new or additional; they are the normal notifications and requests for information that are carried out during the everyday course of business. The difference is that they are shared across the network of providers using one common point of store of communications using whatever PC or mobile device is available to each member.

Thus when something is agreed or some information is required it only needs an entry on the wall for the event and it is then available to anyone in the network authorised to see such information.

An add-on not a replacement for your current systems

The social network is not intended to replace the computer applications that deal with complaints, claim settlement or claim resolution; it exists in parallel and provides the place to permanently record what is often transitory information in the current procedures. This offers a wholly new approach to that provided by the current IT footprint, which is often primarily focused on the insurer activities, not on those of partners, suppliers or the customer.

Attracting customers to your social network

One of the most difficult online marketing challenges is to make people, especially existing customers, visit your web site. Using the claim or complaint as the basis for marketing activity addresses this lack of contact immediately.

The customer will visit regularly to check progress and each time they do the insurer has an opportunity to capture their interest. Using this opportunity the insurer can take time to assess the customer’s interests and create a relationship path that doesn’t end with resolution of the claim or complaint but uses this as the beginning of a long term association.

Social network technology – a simple low cost solution for transparency?



Customer Journey Demonstration of a successful social network interaction

Status quoThe customer insures annually and usually complains about the high premium. There is little or no contact with the insurer.

CRASH!

The Customer fills in a claim form or telephones the insurer, they are asked if they would like to join the on line claim service.

The Claim is recorded and the customer is added to the private social network, they are directed to the App with instruction on how to download and sign in to the private social network.

DOWNLOAD APP

For each step in the resolution of the claim all the parties involved will do what they do today but use the private social network to record actions, make appointments and ask questions instead of telephone calls, texts and email).

The Network is used just like email but the communication is pushed to the customer or other party. All or selected communications can be used to generate emails or texts to alert the customer or any member of the network that something has been posted.

The Customer will check the network wall regularly to see progress on their claim. Importantly, there are no select button telephone calls; no sitting in the dark wondering what’s happening. Customer can also ask questions via the network to specific individuals or the network in general.

As well as claim progress and information, the customer will see tailored messages about the insurer’s offerings, company promotions, special offers, claim advice, daily entertainments or sports reports to capture interest.

The wall can be used to give access to other sites and use existing social and marketing materials.

2 for 1 Special offer

Once the Claim is successfully resolved a complete history is available with performance metrics this can be used to feed process improvement or provide historical reference if necessary.

Customer has an accident

Following resolution of the claim

• Thecustomerremainsamemberoftheprivatenetworkwhichcanbeusedasanon-goingtargetformarketing.• Ifsufficientinteresthasbeencreated,thecustomermayreturnregularlyespeciallyifservedcompellinginsurance

company content related to sport’s teams or events, film, entertainment/TV programmes, or news that is either sponsored or associated with the Insurance provider.

• Thewallcanbecomethefriendlynonchallengingtrustedinsuranceadvicecentre.• Alsothecustomercanbetransferredtotheinsurerspublicsocialnetworkandcontinuetheirinteractionandmay

provide feedback to others on their personal experience.

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CustomersLet’s look first at the customer who has made the claim or complaint:

From the time they load the app on their mobile device, work or home computer they have 24-hour a day access to the latest information.

In fact the social network will automatically notify the customer of chosen important points in the claim process.

To check the status of their claim or complaint they simply access the network. This allows them to immediately view the communications between any members of the community that the insurer has determined they should see.

Importantly, in terms of the level of satisfaction gained through a rapid resolution, the customer can respond immediately via the social network to any requests for additional information as soon as they have the answer. They can also correct any misinterpretations that may have been made by others concerning their claim or complaint. Again, this will improve the customer’s overall experience. As will the ability to make appointments with loss adjusters, suppliers and other parties with no need to go through telephone call centres. The days of long wait times to find information about progress or future activity are over.

The result? The customer is more likely to remain with the insurer having received a superior level of service.

Third partiesThe suppliers, loss adjusters, credit hirers and other third parties are a critical component in the entire customer interaction. What impact does the social network have on them?

They will only need to communicate with the social network wall as the single point of contact. This means that they don’t have to remember a number of different people or departments to contact and the wall is always available to them. If a customer or other member of the supply chain makes a comment or request, these can be viewed immediately – and swiftly responded to.

Third parties on the social network can easily coordinate joint actions with other providers to minimise wasted journeys. They can make appointments or changes and get confirmation without telephone calls and potential call centre waiting times, all of which boosts their efficiency levels.

Finally, there is the potential to use the customer experience to create their own relationship with the customer to increase business, For example a garage may offer the customer special deals for servicing or trade in.

Different views for different people

In order to better understand the impact of adopting private social networking to process events such as claims or complaints, we can consider this new world from a number of different perspectives: customers, third parties and the insurer.


InsurerThe insurer will gain the most benefit from providing such a social network solution. The insurer can easily take a low cost low risk evolutionary approach to providing information access. They can start with one or two partners and gradually extend the network scope by adding more supply chain members and additional services based on actual customer usage and feedback.

This has a number of impacts:

From a claims perspective: The social network gives the insurer a simple way to interact with all parties involved with the resolution of the claim. They have one simple point of interaction where all activities can be coordinated to achieve the best solution for the customer. This reduces the cost of administering the claims process by managing potential delays, monitoring credit hire and minimising communication charges.

From a complaint management perspective: Managing the complaint becomes simpler with the social network encompassing all those people involved in resolving the complaint. There is the opportunity for consistency of communication with the customer as any person involved can see the previous communications and act consistently.

Customer satisfaction is enhanced by improved service levels as the customer can see what action is being taken with the quality and consideration of the response being transparent at every point. The customer has the opportunity to correct any misunderstandings which can eliminate wasted activity.

In today’s highly regulated financial services sector, the dialogue with the customer can be shared with the regulator to show exactly how the complaint was resolved.

From a customer relationship development perspective: The customer will visit the social network regularly to check progress. This addresses one of the major difficulties in online, marketing, that of driving the customer to visit the website via attractive content. Each visit is an opportunity for the insurer to develop the customer relationship.

As such, this solution gives marketing a huge opportunity for customer interaction that would cost a significant amount of investment to achieve at anything like the same volume using traditional marketing methods.

The customer can be encouraged to suggest other information and services that they would find useful, making them feel part of the service and more embedded in the social network. While the customer is checking the progress the insurer can capture their interest with a wide range of information about other products and services.

It is clear that this is an opportunity to create an environment where the customer will continue to visit the social network after the claim or complaint has been resolved.


“ The social network gives the insurer a simple way to interact with all parties involved with the resolution of the claim. ”

Conclusion – making the right choice

Using a private social network to manage your customer interaction offers an opportunity to turn a potentially negative situation into a positive experience for the customer. A social networking approach can play a critical role in customer attraction and retention, while decreasing overall operating costs.

So what are the criteria for selecting the right social network for your business?


It needs to provide private access to a group or community that will be involved in dealing with the customer’s request.

It should be intuitive and easy to add participants to a particular community as the situation changes.

It should have the capability of simple integration with back end IT applications over time.

The opportunity to quickly implement a low-cost hosted option for proof of concept is important.

We would not recommend a big bang approach to this, but more of an evolutionary one. The tactic would be to start with a basic set of simple events involving a small number of internal and external roles maybe restricted to one geographic location. From there you would increase the depth by integrating the private social network with your IT applications, and the breadth by including other players and extending the process and geographical reach as determined by customer usage and customer suggestions or requests.


Adding up the benefit – a savings modelHow much could be saved in the call centre with the adoption of social networking in the customer engagement model? The following offers a simple mathematical equation where the benefits quickly add up:

How many of your call centre transactions are related to requests for information particularly about the status of claims?

How many calls are associated with follow up on complaints? +

How much does each call cost to service? x

Wasted money time and effort. =

How much would you save if you could reduce this by 80%? =

How much is spent today on encouraging customers to visit your web site?

How many visits does this deliver?

Hence what is the cost of achieving a visit? x

How much would you benefit if you could get every claimant or complainant to regularly visit your web site? =

Adding up the savings – a benefit modelHow much would it cost in marketing to achieve a daily customer visit to your internet presence? The following offers a simple assessment of how the benefits could quickly add up:

For further information on Steria’s unique social media solution for Insurance, contact Nic Monks on +44 (0)7720 899046

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About Steria: www.steria.com/insuranceSteria delivers IT enabled business services which help organisations in the public and private sectors operate more efficiently and profitably. By combining an in depth understanding of our clients’ businesses with expertise in IT and business process outsourcing, we take on our clients’ challenges and develop innovative solutions to address them. Through our highly collaborative consulting style, we work with our clients to transform their business, enabling them to focus on what they do best. Our 20,000 people, working across 16 countries, support the systems, services and processes that make today’s world turn, touching the lives of millions around the globe each day.

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Financial Services Sector

Steria has more than 40 years’ experience in the financial services sector. We are the European business and IT transformation partner for many of the world’s leading banks and insurers and have developed an in-depth understanding of how efficient business processes and effective IT can be used to build competitive advantage.

Contact

Nic Monks, Principal Solutions Architect, Financial Services Sector, mobile: +44 (0)7850 795 839, email: [email protected]

Technology

New opportunities for transparency