how to determine the right channel for the right customer

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How to Determine the right Channel for the Right Customer Trond Bergestuen VP Commercial Marketing, Gjensidige (Norwegian Mutual) Vienna, 17 September 2009

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How to Determine the right Channel for the Right Customer. Trond Bergestuen VP Commercial Marketing, Gjensidige (Norwegian Mutual) Vienna, 17 September 2009. Agenda. Determine who are the decision makers in the purchase of insurance in the SMEs. - PowerPoint PPT Presentation

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Page 1: How to Determine the right Channel for the Right Customer

How to Determine the right Channel for the Right Customer

Trond Bergestuen

VP Commercial Marketing, Gjensidige (Norwegian Mutual)

Vienna, 17 September 2009

Page 2: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer2

Agenda

Determine who are the decision makers in the purchase of insurance in

the SMEs

Assess how customer channel preference varies according to the situation

Understand what factors affect their decision process

How to create the optimal customer journey

Page 3: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer3

New BusinessAreas in Norway

General Insurance Norway2,040

New Businesses753

General Insurance

Nordic/Baltic892

Total: 3,685

Customers

Leading Market

Position in Norway

Market Shares1)

• Total number of customers 992,000 (30 June, 2009)– 897,000 in the private segment– 95,000 in the commercial segment

Headcount 30 June 2009 New Businesses

• Pension and savings (Gjensidige Pensjon og Sparing)

• Online retail bank (Gjensidige Bank)

• Health care services provider (Hjelp24 NIMI)

1) The Norwegian Financial Services Association (“FNH”), general insurance per 30 June 2009. Segments are based on company definitions, but drawn directly from FNH report. Gjensidige market shares include Tennant

2) Products sold to private and agricultural customers. Product groups include: motor, property, personal accident, agriculture and other (travel insurance, leisure boats and animals)

3) Products sold to SME and corporate customers. Product groups include: motor, property, personal accident, liability and marine

Diversification into

Nordic/Baltic Region

• LF’s Baltic operations (2H-2009, contingent upon regulatory approvals)

• RESO Europa (Baltics, May-2008)

• Fair and KommuneForsikring (Denmark, Mar-2006, Jan-2007)

• Parekss (Baltics, Sep-2006)

• Tennant (Norway and Sweden, Aug-2007)

Nordic/Baltic OperationsFY2006 (GWP) 6M2009 (GWP)

Nordic/Baltic2.6%

Norway97.4%

Nordic/Baltic22.3%MNOK 2,239

Norway77.7%

MNOK 7,780

Snapshot Gjensidige

• Total Market 29.1% (#1)

– Private2)

27.7% (#1)– Commercial3)

32.5% (#1) (Same market share as If.. within Commercial)

Page 4: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer4

Key Figures (MNOK)

(259)

2.820

3.711

1.079

(432)

2006 2007 2008 1H 2008 1H 2009

860

669553

417347

2006 2007 2008 1H 2008 1H 2009

15.482

7.525 7.712

14.84813.189

2006 2007 2008 1H 2008 1H 2009

Earned premiums general insurance, net of reinsurance

Underwriting result general insurance

Net income from investmentsCombined ratio

75,9 78,6 78 76,977,4

18,9 17,5 17,4 17,717,0

94,695,496,194,8 94,4

2006 2007 2008 1H 2008 1H 2009

Loss Ratio Cost Ratio

*

*

* The 2006 and 2007 figures include net financial items in Pension and savings and Online Retail Banking. As from 2008 only financial items that relates to the return on the company portfolios in Pension and savings and Online Retail Banking are included in net income from investments (i.e operating items are included in Operating income and Claims, loss etc)

Page 5: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer5

6000

8000

10000

12000

14000

16000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008*

MN

OK

Gross Written Premiums

Cost Discipline Continuous Improvements

1400

1600

1800

2000

2200

2400

2600

2800

3000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Nu

mb

er o

f E

mp

loye

es

15

20

25

30

35

Co

st R

atio

(%

)

Employees Cost Ratio

A continuous focus on efficiency in the Norwegian general insurance operations has yielded results

• Reduction of employees in the Norwegian general insurance operations from approx. 2,750 in 1999 to 2,040 at the end of Q2 2009

• Number of branch offices in Norway reduced from 151 in 2005 to 54 at the end of Q2 2009

• Cost Ratio improvement in the Norwegian

general insurance operations in the same period; starting at 30.6% in 1999 improved to 16.4% in 2008 (16.8% as of Q2 2009)

• GWP growth from MNOK 7,000 in 1999 to 13,131 MNOK in 2008

A.D. Little: Gjensidige is among the top ten most efficient non-life players in Europe

Page 6: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer6

Agenda

Determine who are the decision makers in the purchase of insurance in

the SMEs

Assess how customer channel preference varies according to the situation

Understand what factors affect the decision process

How to create the optimal customer journey

Page 7: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer7

Decision makers in the purchase of insurance

Who is the main decision maker in the purchase of insurance in SMEs?

CEO/Owner

CFO/Business controller

HR

Other

Source: Market study SMEs, Norway, 2008

n=400

Page 8: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer8

Agenda

Determine who are the decision makers in the purchase of insurance in

the SMEs

Assess how customer channel preference varies according to the situation

Understand what factors affect the decision process

How to create the optimal customer journey

Page 9: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer9

What factors affect the decision process?

Brand

Price

Providers

industry

insight

Risk

management

advice

Key account

manager

Local branchInternet

services

Page 10: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer10

What factors affect the decision process

Source:Conjoint analysis, SME segment, NorwayPA Consulting Group, 2006n = 409

Attribute importance when purchasing insurance

0 5 10 15 20 25

Internet services

Local branch

Industry insight

Risk mgmt. advice

Brand

Key account mgr.

Price

Page 11: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer11

n= 409

Rela

tive im

port

an

ce (

sum

= 1

00

)

There are small differences in the preferences when we segment based on geography

Segmentation by geography

0

5

10

15

20

25

30P

rice

Bra

nd

Inte

rne

t se

rvic

es

Lo

cal b

ranc

h

Key

Acc

ou

nt

mg

r.

Ind

ustr

y in

sig

ht

Ris

k m

gmt.

ad

vice

East

Inland

South

West

North

Page 12: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer12

Rela

tive im

port

an

ce (

sum

= 1

00

)

The difference in preferences is noticeble when we segment based on industry

n= 409

Segmentation by industry

0

5

10

15

20

25

30

Pric

e

Bra

nd

Inte

rne

t se

rvic

es

Lo

cal b

ranc

h

Key

Acc

ou

nt

mg

r.

Ind

ustr

y in

sig

ht

Ris

k m

gmt.

ad

vice

Financial services

Healthcare services

Manufacturing Industry

Construction, transportation,communcation

Retail, hotels and restaurants

Public services and education

Primary industries

Page 13: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer13

n= 370

The differences are also noticable when we segment based on size (premium paid)

Rela

tive im

port

an

ce (

sum

= 1

00

)

Segmentation by size

0

5

10

15

20

25

30

35P

rice

Bra

nd

Inte

rne

t se

rvic

es

Lo

cal b

ranc

h

Key

Acc

ou

t m

gr.

Ind

ustr

y in

sig

ht

Ris

k m

gmt.

ad

vice

Micro

Small

Medium

Corporate

Page 14: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer14

The average decision maker does not exist!

Five needs based

segments:

Price Segment: 16%

Competence Segment: 29%

Local Relation Segment: 25%

Internet Segment: 9%

Key Account Segment: 22%

Rela

tive Im

port

an

ce (

sum

= 1

00

)

Needs based segments

0

5

10

15

20

25

30

35

Pric

e

Bra

nd

Inte

rnet

ser

vice

s

Loca

l bra

nch

Key

Acc

ount

mgr

.

Inud

stry

insi

ght

Ris

k m

gmt.

adv

ice

Price

Competence

Local relation

Internet

Key account

Source:Conjoint analysis, SME segment, NorwayPA Consulting 2006

Page 15: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer15

The Price Segment selects almost entirely based on price

Rela

tive im

port

an

ce (

sum

= 1

00

)

Price (16% of sample)Segment 1: 16% in sample

0

5

10

15

20

25

30

35

Pric

e

Bra

nd

Inte

rne

t se

rv.

Lo

cal b

ran

ch

Ke

yA

cco

un

t m

gr.

Ind

ust

ry in

sig

ht

Ris

k m

gm

t. a

dvi

ce

Source:Conjoint analysis, SME segment, NorwayPA Consulting 2006

Page 16: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer16

For the Competence Segment it is important to have a contact person that

knows the customer’s industryR

ela

tive im

port

an

ce (

sum

= 1

00

)

0

5

10

15

20

25

30

35

Pric

e

Bra

nd

Inte

rnet

ser

v.

Loca

l bra

nch

Key

Acc

ount

mgr

Indu

stry

insi

ght

Ris

k m

gmt.

adv

ice

Segment 2: 29% in sample

Source:Conjoint analysis, SME segment, NorwayPA Consulting 2006

Page 17: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer17

The Local Relation Segment prefers a contact person locally and a brand they

trustR

ela

tive im

port

an

ce (

sum

= 1

00

)

Segment 3: 25% in sample

0

5

10

15

20

25

30

35P

rice

Bra

nd

Inte

rnet

. S

erv.

Loca

l bra

nch

Key

Acc

ount

mgr

Indu

stry

insi

ght

Ris

k m

gmt.

adv

ice

Source:Conjoint analysis, SME segment, NorwayPA Consulting 2006

Page 18: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer18

For the Internet Segment price is an importance factor but internet services

are also important (self service)R

ela

tive im

port

an

ce (

sum

= 1

00

)

Source:Conjoint analysis, SME segment, NorwayPA Consulting 2006

Segment 4: 9% in sample

0

5

10

15

20

25

30

35P

rice

Bra

nd

Inte

rne

t se

rv.

Lo

cal b

ran

ch

Ke

yA

cco

un

t m

gr

Ind

ust

ry in

sig

ht

Ris

k m

gm

t. a

dvi

ce

Page 19: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer19

The Contact Person Segment would like a key account manager that can handle any

issue/situationR

ela

tiv v

ikti

gh

et

(su

m =

10

0)

Source:Conjoint analysis, SME segment, NorwayPA Consulting 2006

Segment 5: 22% in sample

0

5

10

15

20

25

30

35P

rice

Bra

nd

Inte

rnet

ser

v.

Loca

l bra

nch

Key

Acc

ount

mgr

.

Indu

stry

insi

ght

Ris

k m

gmt.

adv

ice

Page 20: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer20

Segment composition varies by population density

Needs based segments by population density

0 %

20 %

40 %

60 %

80 %

100 %

Rural Smalltown

Mediumtown

Largetown

Key account

Internet

Local relation

Competence

Price

Page 21: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer21

Agenda

Determine who are the decision makers in the purchase of insurance in

the SMEs

Assess how customer channel preference varies according to the situation

Understand what factors affect the decision process

How to create the optimal customer journey

Page 22: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer22

In order develop an effective service model we need to understand in what situations the

customer wants to use the different channels

• Up to this point we have focused on attributes when the decision maker selects a provider of insurance

• It is also important to understand the customers’ preference related to service in different situations

Situations with need for contact

Service channel

Branch Internet Phone

BuyProposal ComplaintUpdate ClaimSeek

info.

Page 23: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer23

Choice of channel depends on the situation, but calling a contact person is most often the

preferred channel

Ønske om kontakt via telefon

0 % 20 % 40 % 60 % 80 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

Klage

0 % 20 % 40 % 60 % 80 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

KlageBedriftssenter

Fast kontaktperson

Forsikringsmegler

0 % 20 % 40 % 60 % 80 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

KlageInternett

E-post

Brev/fax

0 % 20 % 40 % 60 % 80 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

Klage Kontor i nærheten

Representantbesøk

0 % 20 % 40 % 60 % 80 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

KlageBedriftssenter

Fast kontaktperson

Forsikringsmegler

0 % 20 % 40 % 60 % 80 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

KlageInternett

E-post

Brev/fax

Ønske om besøk

0 % 20 % 40 % 60 % 80 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

Klage

0 % 20 % 40 % 60 % 80 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

Klage Kontor i nærheten

Representantbesøk

Total sample

Internet/e-mail/mail Branch/Visit Phone

Complaint

Complex claim

Simple claim

Report claim

Update

Purchase

Proposal

Risk mgmt. advice

Seek information

Internet

E-mail

Letter/fax

Local branch

KAM visit

Call center

Contact person

Broker

Respondent could indicate several channels for each situation, therefore sum > 100

Page 24: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer24

Local relation and Internet segments have very different servicing preferences

0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

KlageInternett

E-post

Brev/fax

0 % 20 % 40 % 60 % 80 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

Klage

Kontor i nærheten

Representantbesøk

0 % 20 % 40 % 60 % 80 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

Klage

0 % 20 % 40 % 60 % 80 % 100 % 120 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

KlageKundesentertelefon

Fast kontaktperson

Forsikringsmegler

Lokal relation segment

0 % 20 % 40 % 60 % 80 % 100 % 120 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

KlageInternett

E-post

Brev/fax

0 % 20 % 40 % 60 % 80 % 100 % 120 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

KlageKontor i nærheten

Representantbesøk

0 % 20 % 40 % 60 % 80 % 100 % 120 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

Klage

0 % 20 % 40 % 60 % 80 % 100 % 120 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

KlageKundesentertelefon

Fast kontaktperson

Forsikringsmegler

Internet Segment

Ønske om kontakt via telefon

0 % 20 % 40 % 60 % 80 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

Klage

Ønske om besøk

0 % 20 % 40 % 60 % 80 % 100 %

Søke info

Skadeforebyggende

Tilbud

Kjøpe

Oppdatere

Melde skade

Enkelt oppgjør

Omfattende oppgjør

Klage

Internet/e-mail/mail Branch/Visit Phone

Complaint

Complex claim

Simple claim

Report claim

Update

Purchase

Proposal

Risk mgmt. advice

Seek information

Complaint

Complex claim

Simple claim

Report claim

Update

Purchase

Proposal

Risk mgmt. advice

Seek information

Page 25: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer25

Agenda

Determine who are the decision makers in the purchase of insurance in

the SMEs

Assess how customer channel preference varies according to the situation

Understand what factors affect the decision process

How to create the optimal customer journey

Page 26: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer26

The use of field sales, the phone and the internet as direct sales tools

Segment Micro Small Medium Corporate

Premium/complexity

Page 27: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer27

The use of field sales, the phone and the internet as direct sales tools

Segment Micro Small Medium Corporate

Premium/complexity

Sales/

service

Call center Corporate unitField sales

Effective sales and service channel for micro and small segment (phone, e-mail)

Tailored personal service to larger customers by local sales force

Specialist service to Corporate customers

Page 28: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer28

The use of field sales, the phone and the internet as direct sales tools

Segment Micro Small Medium Corporate

Premium/complexity

Sales/

service

Call center Corporate unitField sales

Effective sales and service channel for micro and small segment (phone, e-mail)

Tailored personal service to larger customers by local sales force

Specialist service to Corporate customers

Roles Inbound

Outbound Service consultants

Key Acc.Mgr.

Brokered customers

Key Acc.Mgr.

Service consulants

Service of indirect customers (through) brokerage houses

Page 29: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer29

The use of field sales, the phone and the internet as direct sales tools

Segment Micro Small Medium Corporate

Premium/complexity

Sales/

service

Call center Corporate unitField sales

Effective sales and service channel for micro and small segment (phone, e-mail)

Tailored personal service to larger customers by local sales force

Specialist service to Corporate customers

Roles Inbound

Outbound Service consultants

Key Acc.Mgr.

Brokered customers

Key Acc.Mgr.

Service consulants

Service of indirect customers (through) brokerage houses

Internet and Log in services

Page 30: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer30

How to create the optimal ”customer journey”

Tlf og post

Ansikt til ansikt

Nett

Kundetilfredshet nye kunder

bredde levetid

Contact: Purchase Servicing Renewal

The customer ”travels through” different channels

Face to face

Phone/mail

Internet

Customer lifetime

Customer satisfaction

Loyalty

Profitability

Example

Segment x

Page 31: How to Determine the right Channel for the Right Customer

21.04.23 How to Determine the Right Channel for the Right Customer31

Tusen takk!(A thousand thanks!)