Archive for the ‘Insurance’ Tag

Gamification boosts customer engagement at Insurance firm

What is more boring, but useful, than learning about your workplace RRSP plan? What is more fun, but useless, than playing games at work?

“We regularly look outside our industry for innovative ways to help our customers learn more about retirement savings,” says Nadia Darwish, vice president, Market Development at Sun Life Financial. “Gamification was a natural fit.”

Gamification is less convoluted than the word implies. Essentially, the idea is to combine the basic appeal of video games — purpose, competition and the desire for mastery — with behavioral psychology to increase revenue. This could mean improving productivity, enhancing engagement or increasing sales.

Ms. Darwish and her team released an online game called Money Up in late 2014. Money Up features “missions” exploring the basics of retirement planning, investment asset allocation and different financial products. Players are quizzed about what they’ve learned before they can proceed to the next level and, like a classic arcade game, there is a leaderboard so employees know how they stack up against their colleagues.

The business results exceeded management’s expectations, Ms. Darwish says, generating significant improvements in participation, contributions and product penetration. She attributes success to the game’s seamless integration with Sun Life’s broader “financial literacy” program and is particularly happy that Money Up reached “the unique Generation Y audience in a way that resonates with them.”

Making simple, functional games is easier today than ever before. With a modest investment, a behaviour-changing game can be designed, tested and released within six months. Here are five tips for developing a gamification strategy based on the experience of Ms. Darwish and her team:

Don’t treat gamification like a side project. Gamification must be considered a strategic initiative and should incorporate input from senior leaders.

  • Don’t gamify in a silo. Adopt a collaborative approach by soliciting feedback from both internal and external stakeholders at every stage of development.
  • Don’t lose sight of your goal. Work backwards from your desired result (e.g. educate customers) to ensure that your game is more than just fun.
  • Don’t lose sight of your audience. Put the needs of your potential players ahead of your messaging by developing a product for them, not you.
  • Don’t set it and forget it. Monitor performance and solicit customer feedback after launch in order to develop fixes and improvements on the fly.

When a gamification strategy fails, it’s rarely for lack of enthusiasm. Here are three common pitfalls:

  1. Uncertain ownership. It can be difficult to determine who should ‘own’ a project that necessarily spans multiple departments within an organization.
  2. Narrow thinking. It can be difficult to articulate a compelling business case for something with which an organization has no prior exposure.
  3. Lack of knowhow. It can be difficult to develop a successful gamification strategy without experience in game design and behavioural psychology.

But the potential benefits of gamification are too significant to throw the baby out with the bathwater. The trick is tempering ambitious vision with lean resource allocation and a willingness to pivot along the way to mitigate risk and keep the project within its intended scope.

For more information on our services and work, please visit the Quanta Consulting Inc. web site

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Maintaining a winning customer experience

A customer experience strategy is an amalgam of practices, systems and values that guide interactions with customers and prospects across different sales channels, platforms and geographies. In an increasingly competitive and commoditized marketplace, creating a ‘wow’ customer experience is one of the few tools left for companies to retain customers, sustain margins and build a long-term competitive advantage.

Elements of a good customer experience strategy include customer-centric process design, passion-driven employee engagement, coherent interactions across multiple touch points and operational integration. Companies as diverse as Nordstrom, Lexus, Disney and Singapore Airlines have built industry-leading market share, profitability and shareholder value by consistently delivering ‘wow’ (i.e., higher than expected) customer experiences at every interaction.

In many cases, however, designing the ideal experience is the easy part, particularly if it is built on a foundation of product, brand and service excellence. The tougher challenge is maintaining this capability over time. Companies can preserve their winning customer experience by (1) developing real-world measurement systems, (2) institutionalizing key values and (3) staying close to changing customer needs and requirements.

Dropping the ball

Ten years ago, my company worked with the functional teams of a large IT solutions company to develop a customer experience strategy for their sales, support and professional services. The model was developed by working backward from their desired client interaction, and tailored to their different segments, customer types and channels. The new customer service strategy embraced every touch point, from the sales teams scripts and customer on-boarding practices to support triaging and billing processes. After only 12 months in market, the new model was credited with boosting loyalty as well as cross selling rates.

Three years out, however, the firm’s growth stalled. The metrics showed declines in customer satisfaction, online engagement and service levels. A deeper analysis indicated that their customer experience had degraded due to a variety of factors: changing client requirements and expectations (they went higher); a lack of organizational continuity (increased turnover of front-line staff prevented the inculcation of customer experience values into new employees); and clumsy integration of new enterprise software (which reduced service levels and complicated processes). Ultimately, a gap had developed between the initial customer experience strategy and its supporting capabilities.

Sustaining your customer experience strategy

Companies can preempt these issues by better institutionalizing their customer experience management practices and values. Some ways to do this include:

  • Frequently research your customers to stay in sync with their dynamic needs and requirements as well as ensuring your customer experience is consistent through new sales and support channels.
  • Make cultural fit and internal alignment a priority. Every customer-facing employee must inculcate customer experience purpose and values (e.g., ‘the customer is always right’). Rotating customer ownership through senior leaders in key departments is a good way of keeping focus and alignment.
  • Develop early warning systems to track progress, identify problems and generate learnings that can improve existing programs. These systems should track actionable metrics that align to each department’s and individual’s performance goals.
    A Canadian leader

One company that does a good job of maintaining a compelling customer experience is Sun Life Financial. The insurance and wealth leader did all the right things when they designed their customer experience in 2012, such as linking the program to key business metrics and adopting a global and holistic business view. Moreover, Sun Life Financial did not leave the program on auto-pilot.

To ensure focus and follow through, Sun Life Financial created a global working group made up of senior leaders from many departments, including marketing, finance and operations. This group meets often to track and review a variety of customer metrics, including net promoter scores and how they are tracking against improvement measures across all lines of business, as well as to review the latest customer and brand research. Importantly, they are not a corporate rubber stamp body: Their strategic mandate includes exploring opportunities for scale economies, sharing learning between regions and businesses and recommending changes in tactics (if necessary) so that customer needs are placed first and foremost.

“Our customer experience program reinforces the philosophy that the customer is at the centre of everything we do,” says Mary De Paoli, Executive Vice-President, Public & Corporate Affairs and Chief Marketing Officer, Sun Life Financial. “Delivering exceptional customer experiences requires a commitment to asking your customers, regularly, how you can improve the products and services they depend on from you. We believe this is the number one driver of the long-term success of our business.” Although it is still early days for the working group, the program has been credited with creating a winning online experience and better enabling the channel (e.g., plan sponsors, brokers and consultants) experience.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Customer acquisition in a multi channel world

Most companies depend on some form of channel to target, sell and deliver products and services to end users.  A channel can be any intermediary such as a retailer or distributor, a sales team or a technology platform like the iPad. Recent developments are putting channel performance in executive crosshairs.  A low growth economy puts a premium on having high performance channels that drive customer acquisition and retention while maximizing efficiencies.  Secondly, the power of Web-based technologies can no longer be ignored.  Social media, e-commerce, and mobile computing already play a vital role in product purchase, research, referrals and support.

All too often, channel-focused acquisition strategies fail to achieve the desired results for the following reasons we’ll call the 5 Cs:    

Cannibalization – Customer acquisition programs in one channel end up cannibalizing another channel’s business.

Consistency – High channel complexity increases the chances that your value proposition, tactics and strategy will be inconsistently deployed.

Conflict – Misalignments in strategy and incentives triggers conflict between different channel players and the company.

Customers – Customer behavior and needs become out of sync with the channel design.

Change – Managers do not follow ‘best practices’ when making changes to strategies and structure.

Although channels are complex to manage, there is hope.  Our learnings from two industries – industrial automation and consumer insurance – highlight the fact that strategically agile firms who pay close attention to their customer and channel partner’s needs can build market share, reduce conflict and gain competitive advantage. Two examples illustrate the value of this bottom-up approach:

Industrial automation

An automation company approached us looking for help in penetrating an unexploited customer group. Management focused on 2 key questions: what was the best channel to target this new segment? How do you formulate a channel strategy that was a win-win-win for the customer, channel partner and company?

Our solution began with an exploration of the target customer’s behavior, needs etc. Secondly, we surveyed their likes/dislikes of the channel that traditionally targeted them.  Finally, we framed this research against major industry and technological trends to understand how the market was evolving. The recommended channel strategy would fall out of these purchase, market, technological and behavioral drivers. 

Our findings opened a few eyes.  Initially, the client assumed the segment could be targeted by the existing distributor and systems integrator channel, with only new and improved marketing programs.  However, we discovered that over half of these customers had a high level dissatisfaction with existing channels, both as individual firms and as a structure.  Instead, these people wanted a direct relationship with the manufacturer – if the firm could develop a functional and informative Web platform.  The research results triggered the deployment of a new e-business portal and direct marketing program.  This channel dramatically improved customer acquisition, minimized cannibalization, and increased overall customer satisfaction.

Consumer Insurance

Boston Consulting Group looked at how to win new business in a channel-reliant business –  the North American home and auto insurance industry,   BCG wanted to answer some questions essential to firms looking to profitably grow market share in a mature market.  For example, how do consumers really want to buy insurance? Do different demographic groups truly prefer different channels? Which channels will prevail in the future? And, which strategic steps should be taken to drive growth?

BCG’s research yielded some noteworthy findings, which we have validated through our Canadian insurer experience: 

  • Over 40% of consumers across all segments are channel indifferent. These consumers represent the battleground for customer acquisition.
  • One way to target these consumers is with a direct relationship using the Web.  Although insurer web channels are poised for the highest growth, current executions must become more customer-centric and functional.
  • All consumer segments value personalized advice and service delivered via agents. However, this agent channel, ideally positioned to provide advice, is not fully meeting consumer needs.
  • Strategically, managers should look to rejig their channel strategy to better drive acquisition.   They have 3 channel options:  agent-focused, direct-focused or a hybrid of the two.

In most channel-intensive markets, the key elements – consumers, technologies and channel partners – are evolving.  Companies that best understand the changes and are able to quickly and adroitly develop new channel models can outflank competition and win the battle for new customers at lower acquisition cost. 

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Social media is dead…long live social media

Over the past year, a number of much-heralded social media campaigns have floundered failing to deliver the desired results.  To wit:

  • Despite a variety of Facebook and viral marketing campaigns that generated considerable buzz, Burger King sales witnessed 6 consecutive quarters of declining sales;
  • Pepsi’s very public shift away from Super Bowl ads to Refresh Project, a social charity program, was unable to prevent the brand’s drop to the number three market share position.

In addressing these setbacks, SM boosters will argue that these initiatives surpassed their customer response and engagement goals.  As well, they contend that some failures are to be expected given the nascent state of the SM space.  Finally, apologists will blame other culprits such as the economy, pricing, and distribution that can sabotage campaign success.

In reality, these arguments are a little specious.  If a SM campaign can not directly trace to higher sales then what is the use of measuring esoteric values like a conversation and tweets in the first place? Interestingly, some SM programs have been in market for over 6 years belying the claim that the “media” is relatively new.  Finally, if other marketing or product elements mattered more than SM they should have been the focus of the program investments in the first place.

Should these poor experiences cause marketers to reconsider their ambitious SM plans?  Maybe, but not so fast.  Concurrently with the failures, there have been a many SM successes across a variety of industries including retail banking, automobiles and insurance. The aforementioned problems may have more to do with the end of SM as a fad and the emergence of SM as a serious marketing discipline.  Within many companies, there is a growing realization that SM is just one marketing tool and cannot kill traditional advertising & promotion in the same way that the arrival of the microwave didn’t kill the oven.

Some important lessons can be gleaned from these high profile failures as well as the successes:

SM has not changed people’s buying behaviour – Most people still evaluate and purchase products today the same way they did 10 or even 50 years ago. As long as the vast majority of sales occur in stores or through sales people, driving traffic to these areas should be the focus of SM programs.

Marketing integration is essential – Without the support of value-based pricing, optimal channel management and solid product quality, all SM efforts will fail to generate meaningful results.

The brand promise remains paramount – If it doesn’t reinforce a brand’s winning value proposition and character, a SM program will be nothing more than a cool (and often expensive) marketing activity.

The key metrics haven’t changed – Today, SM metrics and analytics are not ideal, being inherently qualitative and relational.  Until metrics can be linked to revenues by becoming quantitative and absolute, then there will be a challenge justifying program ROI.

Competitive matching is the last reason to deploy SM –  As the negative examples of Domino Pizza, Amazon and KFC demonstrate, SM can be a high risk activity and should not be pursued without a compelling strategic and revenue-generating rationale.

You still need to execute with excellence – Like other marketing or product initiatives, SM activities need to move beyond the creative, “cool” factor and focus on delivering marketing and operational effectiveness and efficiency.

Most pundits would agree SM’s future is bright.  It’s the short term that marketers should now focus on getting right.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.