From a performance analysis perspective, costs of alternative support channels are first evaluated, followed by the key performance indicators (KPIs) typically used in financial services organizations to measure the performance of their online initiatives, most notably, websites. Following this discussion of performance analysis there is an analysis of resource availability and allocation of resources.
From a cost-per-incident analysis, the following table presents findings from Forrester Research specifically in measuring the median internal costs companies are incurring as a result of each customer service channel. The objectives of this marketing plan specifically focus on driving user adoption while at the same time making process workflows efficient enough to attain the following best practices figures from Forrester Research.
Best Practices in Services Costs by Channel
Cost per Incident
Annual Growth Rate
Knowledge Database and Website
Source: Watson, Donnelly and Shehab (2)
These best practices benchmarks must be relied on in evaluating the success of marketing programs to increase the level of activity to drive down the cost per incident online. While the costs in the above table are significant and dramatic in their variation with one another, a critical point must be kept in mind regarding systems integration to provide each of these systems a synchronized response to each customer's request. Customers, regardless of channel used, require a consistent response, and to accomplish this there needs to be tight integration across all internal systems. While not a core message of the marketing launch, the integration of these systems will lead to a much higher level of trust being generated across the entire spectrum of applications in the self-service website. Customers will expect a 360 degree view of their activity by any form of service, whether it be self-service or a person on the telephone, or even in a chat session, so the integration costs required to make the web-based self-service website work correctly will be significant.
In addition to the costs by channel shown above there is also the need to track a series of company-specific, sales, quote and policy, customer service, and bad debt and expense reduction key performance indicators as is shown in the table, Internal Key Performance Indicators. These KPIs collectively define how the web-based service strategies collectively are changing the nature of the company's business. As part of the Marketing Plan for the initial launch of the web-based self-service website, goals also need to be defined for each of the KPIs listed in the following table based on their time horizon. The KPIs that will first reflect the effectiveness of the marketing campaign include Sales, Quote and Policy, and Customer Service, mainly because the daily activity in the insurance company impacts these metrics with every transaction completed. The KPIs that are company-specific can take up to ninety days to register any significant movement, and this is the result of both financial reporting standards and the magnitude of the figures themselves in many companies.
The success of the marketing plan however needs to be evaluated in the context of Sales, Quote and Policy, and Customer Service KPIs every ninety days to gauge the effectiveness of the launch effort in significantly changing the financial performance of the company.
Internal Key Performance Indicators (KPIs)
Areas of Measurement
Baseline: What to Measure
Example of Benefits to insurance firms
Insurance costs and expenses
Use as a baseline for defining ROI
Number of policies per year
Determine quoting's impact on policies
Current policy costs
Lifetime cost per customer; avg. deal size by customer
Policy cycle time
Policy cycle times reduction of 65% or more recorded
Cost of Sales
Days Sales Outstanding reduction from 60 to 29 days on average
Cross-sell and up-sell revenue
Increase of 33% on aggregate
Average sales price per policy
Increase from 9% to 26%
Quote and Policy
Average costs to complete policy
95% reduction in cost per policy
Special Pricing Requests for policies
Over 100% ROI on automating Special Pricing Requests
Bad or incomplete policies
Incomplete order reductions of 20%
Number of customer complaints
98% reduction in cost of simple requests
Revenue lost to churn
60% when cross-selling is used with quote-to-order for policies
Number of calls on policy status
Median level of 500 per week to 70
Bad Debt Expense Reduction
Reduction in bad debt expense
10% reduction at a minimum
Labor cost reductions
Decrease order re-work from 15% to 2%
Ultimately both sets of metrics, specifically the cost per transaction metric from Table 1, and all relevant metrics from Table 2, need to be included in a dashboard that is used for guiding the new website launch, evaluating its progress over the first full year of operation.
Resource Availability and Allocation
Project management of the web-based self-service initiative relies on a cross-functional team that will work through the entire New Product Development and Introduction (NPDI) process. This process includes defining the initial functional specifications of the website, then fine-tuning them through a series of meeting with Customer Advisory Councils with a representative set of customers. As part of the resource availability and allocation of personnel internally, there needs to be specific efforts made to create these advisory councils who will act as the Voice of the Customer (VoC) inputs into the website process. It is essential that each functional area of the organization also be included in this cross-functional team, and that they have the opportunity to learn through VoC programs what can be best done to meet customers' unmet needs.
The focus on resource availability and allocation also needs to specifically start with the CEO or C-level executive being an executive sponsor of the project as well. This ensures that there will be a higher level of participation and support through the organization.
In completing a SWOT analysis, external factors also need to specifically be defined. The impact of markets, competitors, technological infrastructure, and the value chain of the industry overall play a major role in the definition of the website marketing plan, and each of those areas are described in this section of the plan.
The primary customer segments targeted include those customers with residential and auto insurance policies, in addition to small business insurance policies. These policies form the bulk of all business for the company, yet have a high level of support needed during renewals of new car policies, and when homes are either bought, sold or refinanced. The high levels of support these segments need and the relatively thin gross contribution margins are one of the primary market drivers for creating a web-based self-service website.
Segmentation of the customer base also illustrates the need for creating more automated approaches to delivering service. With the majority of the smaller policies and their relative churn, the need for creating a high level of efficiency and a very low cost per transaction support strategy is also critical. While at the high end of the customer base, the top 10% of customers have personal support available to them due to the need for completing more complex, more expensive transactions that require face time with senior customer service representatives.
Insurance companies rapidly adopted multichannel-based service and support, and over 50% have an integrated call center and web-based self-service strategy in place. For nearly every company however there is a lack of integration across systems, making this the major weaknesses of the majority of the industry. Insurance companies beginning with Integrated Voice Response eventually integrate Web-based self-service into their service architectures. Figure 1, Industry Competitive Service Topology, illustrates the typical competitive approach to defining self-service in the context of the strategic plan of service overall. The competitive weakness of the industry is in synchronizing and working with multi-channel access that reflects the activity across all other areas of the strategic footprint shown in the following Figure. Notice also that self-service encompasses multiple channels for the majority of competitors as well, making the need for systems integration, emphasized earlier in this plan, and process workflow expertise to be combined for best practices in web self-service to be achieved.
As has been discussed throughout this marketing plan, the critical value of the web-based self-service website needs to be promoting and supporting, then illustrating very high levels of trust and accuracy in all customer interactions. To accomplish this, it is critical for there to be a strong level of integration across all systems for trust to be earned, and customers to get the same response regardless of which support channel is queried from. The technological infrastructure of the self-service website needs to be designed to specifically support a high level of integration. Figure 2, Web Self-Service Infrastructure illustrates the layered approach that is necessary for ensuring a high level of integration across all system components. Notice the heavy use of XML for data conversion, staging and distribution. This is the critical technology necessary for integration…