One for all: a Customer Interaction Center, coupled with a smart customer strategy, provides insurance companies with improved service, streamlined operational efficiencies and higher revenues.

Today's consumer and commercial customers have an ever-increasing variety of ways to interact with their insurance provider. Until fairly recently, however, customers had little influence on how and when insurance companies responded to their service and support needs. This lack of influence, coupled with customers' lack of visibility into alternative choices plus high switching costs, meant poorly served customers reluctantly continued to do business with service-challenged companies.

Today's most successful insurance companies distinguish themselves from their competitors by providing superior and differentiated customer service--regardless of the customer-contact channel. They focus on building genuine relationships and wallet share with their end-customers. These relationships are founded and demonstrated through exceptional customer service, with the insurer's key objective being to differentiate the customer experience while growing revenue and managing expenses.

To achieve these objectives, many leading insurance providers have rethought the traditional call-center approach and turned to Customer Interaction Centers.

You Need a Plan

Traditionally, many insurers evolve their customer service functions without first developing a clear strategy. This reactionary approach to service means customers face a variety of problems:

* Different 800-service numbers with no rationale for which to choose;

* Numerous claim-handling service centers for a single policy;

* Multiple phone transfers within the same company, with callers having to identify and repeat themselves again and again;

* Constant reinforcement that the company has no idea of the breadth of the caller's insurance relationship: and

* No semblance of personalized service.

These problems can be avoided by developing a customer strategy and consolidating disparate call-center operations into CICs. These innovative centers, which are used by both consumer customers and agents/brokers, enable insurance companies to centralize the contact and consolidate the various customer touch-points throughout the organization.

Consolidation, coupled with a smart customer strategy, leads to improved customer service, a differentiated customer experience, the ability to cross- and up-sell product lines, improved operational efficiencies and higher revenues.

More Than Technology

State-of-the-art technologies mean that today's consumer and commercial customers have a wide variety of choices for how they contact their insurer, including the Web site, Internet chat, e-mail, phone or fax. And they're demanding the high level of service offered by providers in other industries who are ahead of the customer-service curve.

These customer choices alone are a great reason for insurers to protect their customer base by consolidating touch points across the enterprise. But imagine if the company also examined each customer's motivations and priorities. What if it segmented customers and differentiated service levels across the customer segments based on things such as customer needs, cost of service and value of each customer to the company?

By formalizing a customer strategy, the insurer can maximize value delivered for each customer, provide visibility into investment and effort levels for each segment and track customer-related performance levels for all areas of the company:

Smart insurance businesses are designing and implementing CICs that do the following:

* Deliver consistent, high-quality service access across multiple channels;

* Provide real-time information, customization and personalization to their customers;

* Use a robust customer-centric information database to segment and adjust service levels;

* Integrate with existing front- and back-office legacy systems; and

* Offer self-service capabilities via multiple channels to handle simple inquiries and updates.

The efficiencies gained from consolidating call centers also free up significant time for customer service representatives to execute on targeted sales and marketing programs. Using customer data and smart segmentation strategies, insurance companies can group and target specific profiles with proven sales messages.

For example, one insurance company directed its customer service representatives to make proactive service calls, increasing service levels and providing cross- and up-selling opportunities. It also implemented a series of outbound call sales campaigns designed to cross sell to existing customers.

Controlling Expenses

Historically, many insurance companies have grown through two approaches: products and line-of-business development, and mergers and acquisitions.

As a result, many operations within personal, life, commercial or specialty lines function independently at a product or service level within the line of business. It is only recently that "shared service centers" have evolved within insurance companies to handle some business operations for a group of lines.

Insurance companies have been fairly successful in consolidating business operations such as accounting, purchasing and some information technology functions. Now, they must extend these efficiencies to the development of CICs for customer service, claims and agent/broker management.

On the operational front, sheer economies of scale ensure significant expense control through CIC deployment. For example, a typical insurance company might have an inbound customer service center within each line of business and a claims operation for each product group. Each group may try to independently engage in aspects of cross-selling and outbound telemarketing, leading to significant duplication of effort and a very confusing customer experience.

Consolidation can reduce equipment costs. Fewer telephone systems, computing and network devices are needed to support consolidated CICs on a per-agent basis. Generally, larger call-center and customer-relationship-management systems are also simpler and cheaper to implement and integrate with legacy systems than a series of disparate smaller systems.

Technologies such as computer-telephone integration that may be cost prohibitive for smaller systems can deliver significant return on investment across fewer CICs. On the service and maintenance front, fewer sites are easier to maintain and upgrade than many dissimilar sites.

Fewer CICs require fewer managers and some reps can be eliminated as scheduling efficiencies are achieved in larger centers. Combined with a redesign of business processes for call handling and implementation of technology to manage some types of calls, significant savings and a more consistent customer experience can be achieved. Alternatively, these employees can be redeployed in the proactive service or outbound sales and marketing areas.

By strategically consolidating inbound and outbound telemarketing functions across lines of business that share common customers and customer service philosophies, companies in any industry can free significant monetary and human resources, deliver a consistent sales message and increase revenues. According to AMR Research, one company that consolidated two facilities into one and standardized on a single CRM system decreased the cost per call by 38%.

Ensuring Consistent Quality

As noted, disparate call centers without a consistent customer strategy mean that processes, work flow and procedures can be different for each product and line of business, leading to inefficiencies and inconsistencies in customer experience across channels.

For example, a customer wishing to make an address change may have to make a different phone call for each policy he or she owns and possibly even use different channels (Internet, mail, fax, etc.) to ensure the address change has been successfully made.

Call-center consolidation ensures standardization of processes and quality monitoring and tracking of customer service using consistent business rules, analytical tools and reporting capabilities. This enables governance teams to achieve, monitor and measure overall efficiency improvements and ensure the consistency of a customer's experience across all channels. And as a result, the customer wishing to make an address change only would have to use one channel to update his or her information in multiple repositories throughout the company.

Lowering Costs of Information Distribution

Paper document distribution and management is expensive in any large customer service operation. Centralizing these activities through multichannel CICs can eliminate a large percentage of the costs associated with information distribution, potentially resulting in millions of dollars of savings per year.

For example, one of Inforte's large insurance clients was able to eliminate 30% to 50% of its costs associated with information distribution by consolidating and outsourcing document processing, management and simple transaction processing activities of seven different underwriting call centers. Similarly, information distribution costs in terms of mailing, faxing, courier, etc., can be reduced by applying common processes and technologies throughout each interaction center.

In addition, agents and brokers can "remove the clutter" and improve their ability to obtain the right information on products, policy servicing, claim inquires and billing from a confusing assortment of product support numbers, product specialists, underwriters and so on.

According to a recent Forrester Research report, more than 70% of insurance business leaders said that lowering their company's overall operating costs was a top priority, and another 63% said that acquiring and retaining customers was critical to their company's success. An approach combining a distinct customer strategy with consolidated CICs can deliver the efficiency goal of lower operating costs as well as increase effectiveness in providing exceptional servicing and focused selling to existing customers.

Phil Clarke is a senior principal at Inforte Corp., a customer strategy and solutions consultancy.