A Caution On CRM Software

The study by the Hartford, Conn.-based firm, "CRM in Personal Lines Insurance," found that insurers were split on the effectiveness and usefulness of the technology. What's more, most of the challenges to implementing the software were not technology-related.

To effectively implement a customer relationship management strategy, a company must overcome the first hurdle, which has to do more with its culture than with the technology itself, said Clarence Smith, assistant vice president of Conning & Company ,and author of the study. Part of the problem, he said, is that CRM requires "that data be shared across multiple departments."

Because insurance companies have agents in the field who gather customer information, "the challenge is to make sure the information is shared across multiple platforms and multiple departments, " Mr. Smith said.

Some salespeople, he explained, are reluctant to share customer information, "so there's that challenge about who owns the customer relationship." Sharing this information, he said, is important for "strategic decisions that can be made based on the customer intelligence that can be acquired."

A company's success with CRM software largely depends on this sharing of information. "Sometimes people can be very territorial," Mr. Smith said. They want to be the so-called guardians of information."

Even then, once cultural hurdles have been overcome, he advised companies to make sure that "your business model is consistent with the CRM strategy."

Exploiting customer relationship management, Mr. Smith said, "Is about interacting with customers and gathering information; and then offering better products and better services based on customer feedback." Companies with minimal interaction with customers tend to want to learn less about their customers, he said.

For example, Mr. Smith said some companies are proactive in contacting customers before renewals to determine their needs. Others, he explained, are more reactionary, and only respond to a customer's inquiries. Even though this may be more efficient, "you won't maximize the value of CRM if you're not being proactive and interactive with customers in capturing the information that can be used in the future."

Companies that do not have agents in the field and direct all calls to a call center may have an easier time of implementing CRM software, he said. "Bringing the data and making it more consistent" is more likely to happen in a "one channel operation versus when customers are coming through multiple channels."

The study also concluded that CRM implementation must include thorough employee education. "Companies must not only effectively implement the right CRM package, but the employees must also embrace it and be trained to use it effectively," Mr. Smith said.

In addition, Conning found some property-casualty insurers had invested only in "operational" CRM and not in "analytical" CRM, leaving service representatives and field personnel collecting a great deal of data without analyzing the data to identify ways to build stronger customer relationships.

"With an incomplete or unwieldy CRM package, customer service reps do not have at their fingertips all of the data that aids in direct interaction with the customer," said Mr. Smith. "Analytical software is available but many insurers have not purchased it yet because of budgetary restrictions. Conning urges insurers to look before they leap into CRM."

The Conning study is available from the company at (888) 707-1177 or (860) 520-1521. The company's Web site is www.conning.com.