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Driving the Adoption of Social CRM for Insurers


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An overview of how insurance companies are integrating social media with their customer relationship management (CRM) systems to extend and enhance the conversation with prospects and customers - by effectively mining analytics data, tailoring insurance product offerings, conducting marketing campaigns and much more.

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Driving the Adoption of Social CRM for Insurers

  1. 1. • Cognizant 20-20 InsightsDriving the Adoption of SocialCRM for InsurersUnderstanding customer expectations through social media andcharting out suitable customer relationship management strategiescan help insurers win customers’ loyalty and trust and thus drivesustainable growth. Executive Summary in social. By end-2013, B2B organizations using social CRM applications will represent 25% of all Traditional customer relationship management projects worldwide from less than 10% in 2011. (CRM) systems have relied on maintaining a customer contact base and pushing sales infor- This white paper examines the need for adoption mation. Customers took note of what companies of social CRM in the insurance industry and had to offer and then made purchase decisions. provides insights about the areas where insurers can potentially benefit through social CRM Customer behavior has, however, changed drasti- investments. cally in the recent past. Well connected through social media, today’s customers expect brands Social CRM for Insurers to engage in two-way conversations and rely on trusted recommendations from their social Some early adopters from the insurance industry networking contacts. This has given rise to social such as Farmers, Thrivent and Northwestern CRM in which customers drive the processes, Mutual have embraced social CRM to tap the decide on the channels of engagement and potential of customer conversations in order to define the rules of the relationship. Organiza- strengthen their relationships with customers. tions are compelled to listen and engage in these “We get great data out of social CRM and it helps conversations to build stronger bonds. Gartner1 along multiple fronts. We are driving growth and predicts that by 2013, corporate spending on new business, as well as customer retention. We social CRM systems to support sales, marketing also gain product knowledge and service. We are and customer service processes will exceed $1 able to determine whether there’s a need in the billion worldwide. According to the report,2 30% market that we are not meeting,” asserts the VP of companies will extend their social networking of e-business at Farmers Insurance.4 efforts to social CRM processes. While adoption3 Social CRM offers several opportunities for insur- has been highest among business-to-consumer ers who integrate social data into their CRM eco- (B2C) organizations, business-to-business (B2B) system. Apart from strengthening marketing, companies have also begun to aggressively invest cognizant 20-20 insights | january 2013
  2. 2. Leveraging Social CRM for Insurers Marketing Campaign Effectiveness Prospect and Analytics Contact Management Leveraging Social CRM Customer Demand Service & Generation SupportFigure 1sales, service and support, an effective social understand their customers better. By listening toCRM system helps improve overall customer sat- customer conversations, carriers can understandisfaction and provides a continuous feedback loop the market’s perception about their products.about products and services. It also helps alert They can gauge popular sentiment about theirlocal agents or field officers to engage with cus- products and accordingly tailor their marketingtomers. Figure 1 depicts the dimensions in which campaigns to the target audience. San Francisco-social CRM can be leveraged by insurance carriers. based data mining firm Rapleaf6 says it can help predict which advertisements customers will payMarketing Campaign Effectiveness attention to by looking at their social profiles.Of late, businesses worldwide have begun to shiftaway from traditional marketing toward digital Some insurers are employing innovative digitalmarketing. According to Forrester Research,5 marketing strategies to maximize returns. Forbroadcast and cable television still command the instance, GEICO7 launches commercials withlion’s share of marketers’ media budgets. However, humor and entertainment that are a hit amongdigital video advertisement spending in the U.S. is younger customers. USAA8 tracks customerprojected to balloon by more than 250%, from reviews of its product offerings and uses that$2 billion in 2011 to $5.4 billion by 2016. This is information to drive product improvements,primarily driven by the fact that today’s customers improve Web site conversion and increase inter-spend most of their time online. active marketing effectiveness. American Family Insurance9 has created a social game in an effortThere are multitudes of online channels distrib- to reach its main demographic — active users inuting a wealth of information, and unless the the gaming space. The game contains real-timeadvertising campaign is personalized and con- elements that make it relevant to customers’textualized it fails to catch customers’ attention. daily lives. For example, if there is a hailstorm inUnlike in traditional marketing where person- the real world where the customer is located, thealization and contextualization is not viable, game reflects this. If a user buys a virtual car butdigital marketing resources can target customers’ not insurance, in the event of damage the gamespecific interests. illustrates that the user has to pay out of pocket.Insurance carriers must wake up to the fact that To contextualize, capitalize and monetize suchdemographics-based targeting and personal- innovative digital marketing initiatives, social CRMization of services can prove to be extremely systems allow carriers to create and distributeeffective in marketing their products and marketing content templates that can be per-services. In order to come up with personalized sonalized and posted by agents on Facebook,digital marketing campaigns, carriers have to Twitter, etc. These tools then allow the carrier to cognizant 20-20 insights 2
  3. 3. measure the effectiveness of these campaigns in Innovation is key for insurers to gain a strongterms of meaningful key performance indicators foothold. Generali12 in France has developed a(KPI). This could involve, for example, tracking concept called Kontsurnous, a group insurancethe engagement levels based on region or agent. scheme where groups of upA recent study10 indicated that locally created to 15 buddies including family, Social CRM systemsFacebook fan pages specific to the region deliver friends or colleagues joinfive times more marketing reach than a corporate together. For each policy sold scan the Facebook,Facebook fan page. in the group, the group earns Twitter and social points. These points can be media profile of theProspect/Customer Contact Management redeemed for lower premiumsTypically, CRM systems maintain information or for reducing the deductible prospect, therebyabout prospects with details such as their contact in the event of a loss. This creating a unifiedinformation that includes location address, phone concept has allowed Generali customer view.number and e-mail address. In addition, social CRM to increase its customer basesystems scan the Facebook, Twitter and social while reducing its acquisition costs. A similarmedia profile of the prospect, thereby creating a scheme can be worked out for other groups suchunified customer view. These conversations can as shopkeepers who operate from a single, largebe imported into the CRM system and monitored shopping spot avenues for further engagement. Alertscan be triggered to agents in nearby locations. Customer Service and SupportThe alert can either indicate direct purchase Through the usage of social CRM tools, customeropportunities or milestone events that can service requests from social media channels thatpresent potential future opportunities. Farmers11 deserve immediate attention can be prioritizedhas enabled its agents to use Facebook fan pages for immediate resolution. The tools can provideeffectively to qualify leads. The company claims additional insights on influential customers whothat it can determine the number of policies and direct the buying behavior of other customers. Aassociated revenue that result from Facebook negative sentiment expressedengagements since data is procedurally captured by an influential customerin the CRM system. needs to be addressed at the Through the usage earliest. Recently, Progressive of social CRM tools,Demand Generation Insurance13 faced criticism for customer serviceThe imported conversations of the new prospect its handling of a customer’sor an existing customer can provide insights accident liability case in court. requests from socialon lifestyle-changing events that may present A post by the customer’s media channels thatmultiple opportunities. For instance, if a Twitter sibling went viral overnight deserve immediateconversation by one of the prospects indicates and a Progressive claimsthat he or she has had a baby, a child plan can manager had to immediate- attention can bebe suggested by a life insurance advisor or sales ly offer justification at the prioritized forrepresentative. If a customer posts on Facebook carrier’s official blog site and immediate resolution.about a short-term travel trip along with friends clarify the case proceedings.(tagged in Facebook) to a specific region, appro-priate travel insurance options can be suggested. Social CRM can speed up responses to avoidThis can be queued up as a follow-up task for the negative chatter on social media insurance agent in that region. Multiple For example, a customer’s query about autolead opportunities could branch out from this insurance following the purchase of his newsingle lead as there is a possibility of the co- car can be routed to the local agent quickly.travellers purchasing similar coverage. Their Given the nature of compliance considerationscontact information can be obtained through in the insurance sector, a work flow can be setFacebook (assuming it has been made public) and up for a supervisor to approve responses of alogged back as prospects in the CRM system for critical nature before they are posted on socialfurther follow-ups. Similarly, cross-sell and up-sell media channels. Since the social media plug-insopportunities from social media channels can be seamlessly integrate into the CRM system, all theidentified and tracked back to closure through conversations that happen between a customerintegration with the CRM systems. and support personnel can be posted, managed cognizant 20-20 insights 3
  4. 4. with the workflow, tracked and archived in the Challenges CRM system for ease of usage and for deriving Insurers have a few reservations about taking the deeper insights. big leap into social CRM. The lack of a compre- Analytics hensive strategy at the enterprise level, the lack of methodologies to measure results and compli- Social CRM tools enable mining of valuable ance-related concerns about content shared by insights from social media conversations that are their employees or agents in social media cause imported into a CRM system. By harnessing the them to stay noncommittal. power of analytics, carriers can launch effective marketing campaigns, identify influencers and However, beyond these challenges lie opportu- figure out key demographics. Excavating these nities that few insurers have exploited. Farmers deeper insights will aid in engaging better with Insurance15 suggests, “Try to strike the right customers by understanding their specific needs balance between legal department review of and interests. content, and being more aggressive in listening to customers and communicating with them. If youSocial CRM does not For example, a P&C carrier are too conservative with it, it simply won’t work. specializing in personal replace traditional lines can gauge the overall You have to be on it 24*7 and you have to be able to respond to it quickly.” Northwestern Mutual16 CRM; it augments customer sentiment about states that social CRM enables it to create more traditional CRM by its brand, and drill down into personalized and more powerful financial plans sentiment across products providing additional such as auto, home, renters for customers. While building strong relation- ships through social CRM systems, the company insights that blend insurance, etc. The carrier can ensures regulation-compliant use of social media seamlessly into find out what its customers by its employees. think about its service, their the existing CRM claims settlement experience Looking Ahead processes. and agents’ responsive- Social CRM does not replace traditional CRM; it ness. The company can augments traditional CRM by providing additional get instant feedback about new products, and insights that blend seamlessly into the existing discover influential customers on social media CRM processes. Thus it focuses on engaging the channels such as Twitter, blogs, etc. who could customer in a collaborative mode. When insur- potentially become its brand ambassadors. These ance organizations look to build strong customer insights will help it realign its strategies and relationships, their agents, sales representatives, launch innovative products catering to specific call center representatives, marketing personnel, market segments. For example, a Fortune 100 field officers and claims representatives should insurance provider14 discovered that the majority engage in meaningful interactions with customers of negative sentiment expressed by its customers in the social web. This interaction, when integrat- toward property claims were related to policy ed into the existing CRM system, paves the way coverage, while complaints regarding auto claims for an insurer to measure the results. Social CRM related to appraisal accuracy. Insurance providers systems provide insurers with a 360-degree view can measure positive and negative sentiment and of their customers, enable generation of leads, drill down into the specific issues driving that effectively manage customer expectations and sentiment. They can also accelerate follow-up by win their trust. They enable insurers to track KPIs tracking the identified pain points of customers and deliver business value by reducing overall to closure. costs in the long run without compromising on regulatory and compliance considerations. Footnotes 1 2 3 4 networking_facebook-28383-1.html cognizant 20-20 insights 4
  5. 5. 5 mercials/id=13081/8 article/175236/10 28581-1.html13 industry/15 networking_facebook-28383-1.html16 ance-29985-1.htmlAbout the AuthorsAkila Narayanan is a Manager with the Insurance Future of Work Group within Cognizant’s InsurancePractice. She is a social business enthusiast and evangelist. Akila has vast experience in managingcomplex and strategic projects for insurers. She is an avid blogger and specializes in enabling socialbusiness for insurers. Akila is an electronics and communications engineer from the University of Madrasand holds a PMP, Associate in general insurance credentials. She can be reached at Sundar Nagarajan is a Principal Architect with the Insurance Future of Work Group within Cogni-zant’s Insurance Practice. He has vast experience in architecting and executing enterprise legacy mod-ernization projects for insurance carriers. Shyam’s areas of interest include application architecture,legacy modernization, Agile methodologies, SOA, GIS, LBS, LI, mobility and social. His current focusareas include envisioning future of work for insurers with redefined application architecture. Shyamholds a B.Tech degree from the Indian Institute of Technology – Banaras Hindu University and a master’sdegree in software systems from Birla Institute of Technology and Science, Pilani. He is an IBM-certifiedService Oriented Architecture Associate and TOGAF 8 Certified Enterprise Architect. He can be reachedat CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered inTeaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industryand business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50delivery centers worldwide and approximately 150,400 employees as of September 30, 2012, Cognizant is a member ofthe NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performingand fastest growing companies in the world. Visit us online at or follow us on Twitter: Cognizant. World Headquarters European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. 1 Kingdom Street #5/535, Old Mahabalipuram Road Teaneck, NJ 07666 USA Paddington Central Okkiyam Pettai, Thoraipakkam Phone: +1 201 801 0233 London W2 6BD Chennai, 600 096 India Fax: +1 201 801 0243 Phone: +44 (0) 20 7297 7600 Phone: +91 (0) 44 4209 6000 Toll Free: +1 888 937 3277 Fax: +44 (0) 20 7121 0102 Fax: +91 (0) 44 4209 6060 Email: Email: Email:©­­ Copyright 2013, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein issubject to change without notice. All other trademarks mentioned herein are the property of their respective owners.