Once The Industrys Silver Bullet, CRM Is Now A Dirty Word
At the turn of this century, customer relationship management–the idea that technology will enable us to determine the wants and needs of our most profitable customers and develop products and services aimed at themwas hailed as the paradigm that would give new life to the insurance industry.
Today, following highly publicized CRM project failures in the industry, experts say the technology endures, but the term inspires fear and loathing among customers and potential customers.
“CRM is a dirty word,” declares Kimberly Harris, research director, financial services industry, for Raleigh, N.C.-based researcher Gartner. While CRM was once seen as a “silver bullet that would save the industry,” the results have been disappointing, she says.
“A lot of companies are struggling [with CRM systems],” she continues, noting several key issues:
Companies still dont agree on who the “customer” isthe insured or the agent?
CRM often is seen as an information technology (IT) purchase, rather than as a solution that involves the entire company.
In some cases where they have been implemented, CRM systems were unable to support a carriers business requirements.
On the other hand, companies still want the benefits CRM technology has promised, Harris notes. She says Gartner is seeing a “renovation” among buyers who “want to meet the CRM utopia but dont want to call it CRM.”
While CRM applications initially were sold as “horizontal” solutions that werent designed specifically for the insurance industry, that trend has changed in recent years, says Harris. “Today, [CRM buyers] want to build loyalty among their agents, or enhance their claims management functions, or make their customer information files available to the whole company,” she explains.
CRM vendors today are either “horizontal, vertical or in the middle,” Harris observes. Those in the middle “are trying to walk the insurance talk” by placing insurance terms in a horizontal product demo, she notes.
Todays vertical CRM products, she says, are able to recreate “typical” insurance processes based on best practices.
In terms of spending, Harris says the spending on “ongoing” CRM implementations has declined, while there has not yet been an “uptake” in spending on new CRM deals. While such deals still are being discussed, wary buyers have lengthened the purchase process and have placed more stringent requirements on the sellers.
“The main problem with CRM is that the category is way too broad; it encompasses many things,” says Matthew Josefowicz, an analyst with New York-based Celent Communications. The 3 main areas of focus for CRM are: contact center management, data mastery or business intelligence, and managing marketing programs, he explains.
“What we see these days in insurance is less of an interest in the broad category and more in solving specific problems,” he continues. “If the contact center system is inhibiting performance, a company will focus on that. The customer data issue has now been put in the business intelligence/data mastery box, as it should be. Customer data is no different than any other enterprise data.”