Vizolution: A great way to drive sales conversions and improve the customer experience?

I have mixed relationship with corporate technology given my first hand experience of it. It is true that technology is essential and it brings many benefits. It is also true that most corporate technology is complex and expensive to set-up and operate. Last, and perhaps most important is that it does not show up as being usable nor useful to the people on the front lines that have to use the technology. Put differently, from the user perspective the disadvantages outweigh the benefits. A great example of such a technology is enterprise CRM systems. Can Vizolution prove me wrong?

I met up with Marcio Rodrigues, Customer Propositions Director, at Vizolution to learn about this technology. Here is what I learned:

  • Vizolution technology is being used by three of the top five UK banks and two of the top 5 insurance companies;
  • According to customer surveys, customers (95% of them) like the experience that is generated through Vizolution;
  • By using this technology financial services companies have increased sales conversions anywhere from 14% (mortgage conversion) to 93% (life insurance and critical illness); and
  • The folks in compliance love Vizolution as it sends/receives files using 128 bit encryption, allows complex issues to be explained properly, and enables a consistent sales process.

Ok, the banks and insurance companies like it because it improves sales conversion and improves compliance.  What I was interested in was the customer. Why do customers like it? What does Vizolution bring to the customer experience? This is what I learned:

  • By being able to see what the sales agent is talking about customers feel more engaged in the process;
  • The on screen visuals make it easier for the customer to understand the financial product being discussed; and
  • The process of signing-up for a financial product is so much easier and quicker – there is no waiting for the paperwork to arrive by post, reviewing and signing it, waiting for approval.

By now you might be wondering what is Vizolution and what does it do.  As I understand it, Vizolution:

  • Is patent pending software that allows businesses to engage their customers in sales conversations through an instant, easy, screen sharing session via the internet;
  • Is  simple and quick – with just one click the sales agent can initiate a Vizolution session and it is just as easy for the customer; and
  • bypasses the typical issues in installing screen sharing software locally and navigating around-through corporate firewalls.

My last question to Marcio was on costs: purchasing, installation, and use. What I can tell you is that the pricing showed up for me as being modest even cheap given the difference that this technology has made to sales conversion rates. At this point I could not help being a ‘strategic consultant’ and so I advised Marcio and his team to rethink the pricing!

If you want to learn more about Vizolution then I suggest that you contact Marcio. His email address is marcio.rodrigues@vizolution.co.uk

If you have used this software solution either as a manager, a sales agent or a customer then I’d love to hear from you. Please leave a comment.

Please note that I am taking a holiday over August and as such I do not expect to be writing any posts until September. I thank you for reading and hope you make August a great month for yourself and all the people you ‘touch’.

Disclosure: I am happy to write about Vizolution as it occurs to me that this is a simple useful technology. I am not being paid, in any way, for writing this post. Please note that I am not promoting Vizolution and with every technology I encourage you to do your research before you buy.

What is the Kernel of Strategy? (Part IV – Coherent Action)

This post is related to and completes the conversation started in the following posts:

Why not stop at Guiding Policy?

“Without action, the world would still be an idea.”  General Georges F. Doriot

Richard Rumelt (Good Strategy Bad Strategy) rightly points out that many equate strategy with guiding policy.  And thus the work of strategy and the strategist stops there.  He says that this is a mistake.  Why?  Because strategy is about action not ideas/concepts/theories.  Only action has an impact on the situation at hand: influences, shapes, alters that which is.  Here is what Rumelt says:

“Strategy is about action, about doing something.  The kernel of strategy must contain action.  It does not need to point to all the actions that will be taken as events unfold, but there must be enough clarity about action to bring the concepts down to earth. “

Whilst Rumelt does not mention this, I can see another advantage of moving beyond guiding policy and grappling with action.  Grappling with action allows me to grapple with feasibility and thus answer the question “Is this a bridge too far?” And thus I find that I am that much more likely to come up with a strategy that occurs as ‘doable’ as opposed to one that shows up us ‘pie in the sky’ for the people who have to enact the strategy.  A strategy that is not enacted is worthless.  A strategy that is badly enacted is not just worthless it is costly in terms of time, effort, money and depletes faith in management and strategy.

Coherent Action: action that delivers punch

Will any kind of action do?  No, serious thought is required.  Why?  Because the whole can be so much more powerful, pack more punch, than the sum of the parts.  Here is what Rumelt says:

“The actions within the kernel of strategy should be coherent.  That is the resource deployments, policies and maneuvers that are undertaken should be consistent and coordinated.  The coordination of action provides the basic source of leverage or advantage available in strategy……… The idea that coordination, by itself, can be a source of advantage is a very deep principle.

Just in case this is not clear Rumelt spells it out more bluntly:

“To have punch, actions should coordinate and build upon one another, focusing organisational energy..”

When Rumelt speaks coordination what is he referring to?  He is not talking about the commonly accepted way of thinking about coördination:  “continuing mutual adjustments among agents”.  So what is he talking about, pointing at?

“Strategic coordination, or coherence, is not ad hoc mutual adjustment.  It is coherence imposed on a system by policy and design.  More specifically, design is the engineering fit among parts, specifying how actions and resources will be combined.”

Why is coherence so powerful

Whilst this sounds easy, I can say from experience that this is one of the hardest feats to accomplish.  Whilst the talk suggest that we dealing with one/unity (one team, one organisation, one society..) the reality is that we are permeated by decentralisation/fragmentation/silos.  What does Rumelt have to say on this?

“Strategy is visible as coordinated action imposed on a system.  When I say strategy is “imposed”, I mean just that.  It is an exercise in centralised power, used to overcome the natural workings of a system.  This coordination is unnatural in the sense that it would not occur without the hand of strategy.”

Hold on, is Rumelt questioning the free market and decentralisation?  Here is what he says on the matter:

“…decentralised decision making cannot do everything. In particular, it may fail when either the costs or benefits of actions are not borne by the decentralised actors.  The split between costs and benefits may occur across organisational units or between the present and the future.  And decentralised coordination is difficult when benefits accrue only if decisions are properly coordinated.”

If you are working on customer based strategy or customer experience you should be at the edge of your seat.   Isn’t one of the key challenges that focussing on the customer does mean taking a hit now (giving up bad profits) in order to win in the longer term through generating ‘good profits’.  Isn’t another challenge that the customer orientation requires diverting funds and status from the marketing & sales functions towards the folks that come up with products and the Customer Services function?   And how is that going to happen if we leave the product guys to pursue their agenda, the marketing girls to make the numbers that matter to marketing, the sales guys to do whatever it takes to make the numbers and collect commission and we are busy swapping human beings for technology to cut customer service costs?  I do hope that you get what I am getting at.

And finally I leave you with some more wise words

“.. strategy is primarily about deciding what is truly important and focusing resources and action on that objective.  It is a hard discipline because focusing on one thing slights another….. In many situations, the main impediment to action is the forlorn hope that certain painful choices or actions can be avoided – that the long list of hoped-for “priorities” can all be achieved.  It is the handcraft of strategy to decide which priority shall take precedence.  Only then can action be taken.  And, interestingly, there is no greater tool for sharpening strategic ideas than the necessity to act.” 

As your read these words I draw your attention to the failure of the customer-centric orientation to take root and flower. And the failure of governments to do what needs to be done when it comes to banking, financial services, deficits and the structure of western economies…..

Culture Change: what does it take to change culture in a business? in the banking industry?

The ‘banking scandal’ and Ed Milliband got me thinking about culture and culture change

The latest ‘banking scandal’ and a statement from Ed Milliband (Leader of the Opposition) caught my attention and has inspired me to write about culture and the role/contribution of the CEO.  Let’s start with the statement and take it from there:

“It was clear Bob Diamond was not the man to lead the change that Barclays needed. But this is about more than one man.  This is about the culture and practices of the entire banking system which is why we need an independent, open, judge-led, public inquiry.”

I am going to start with tackling culture, then what it takes to change culture in a business organisation and I will end up with my take on what it will take to change the culture of the financial services industry.

What is culture?  And are culture and practices distinct?

A lot has been written on culture and most of it is not particularly useful – as in actionable. Some of it is even been written by people who have pretty much always swam in the one culture and/or spent their lives in the ivory tower of academia.  And I say people in academic ivory towers make stuff more complicated than is necessary or useful.  Isn’t that the job of professors, gurus and other ‘witch doctors’?

Let’s attack this question of culture differently.  How do you know that you are in presence of culture?  Put differently, how does culture manifest itself?   Look into this and you are likely to find that you and I do not have access to the ‘beliefs’, ‘shared assumptions’, ‘mental models’ of others.   No, you and I are up to our necks in language and practices.  What we notice, what impacts us, what we participate in is language and practices – we cannot escape language and practices.

Languages and practices are not neutral – they both indicate cultures and they shape/influence/change cultures.  Allow me to give you an example – the dramatic changes in the UK’s public sector.  Have you ever wondered why the ‘humanity’ / the ethos of ‘public service’ has been driven out of our public institutions in the UK?  I have traced this  to the introduction,and subsequent growth, of the ‘language of business’ into the public sector which drove out the language of ‘public service’.  And the introduction of ‘private sector management practices’ that drove out the ‘public sector administration practices’.  If you have not noticed this then let me make it clear – language and practices go together like two sides of the coin.

Culture and practices are not distinct.  Practices are culture.  Change practices – let go of existing practices, adopt/model new practices – and you change culture.  Language is a special case – an incredibly important practice.  A practice that shapes/changes other practices.  And also a practice that is in turn moulded/shaped by practices.  Just think of how the English language of today is so different to the English of Shakespeare.  Or think about ‘human rights’ – the term did not exist once upon a time.  It was invented and its invention led to practices associated with human rights.  Think about the practice of science and the conquest of nature.  When did it take off in a big way?  After Descartes changed language so that language glorified reason and science.

Who/what does it take to change the culture of a company, a business?

Lets say that you want to change the culture of your business from product-centred to customer-centred.  Or from command and control management to collaboration (social business).  Or simply from command and control to  Upside Down Management where the focus is on empowering/inspiring the front line to do what is right for the customer and delivering great customer service.  Who is the person in the business that you should entrust with this mission?  And how should this person go about it and what can this person expect?  I say it is worth listening to what John Timpson (Chairman of the high street chain Timpson) has to say in his book Upside Down Management:

“It is now 10 years since we decided to introduce Upside Down Management and it is making a massive difference.  Nevertheless, it is not easy to change culture.  Anyone who is thinking of following in our footsteps should take note of the vital ingredient that is needed to make it work: the Chief Executive must be the champion of Upside Down Management.  He or she is the only person who can make it work.  If you’re in personnel, sales or marketing, don’t dream of trying to introduce Upside Down Management until you have your CEO’s 100% commitment.  Upside Down Management is all or nothing, only the CEO can do this, and in doing so he or she must understand how it will change everyone’s job. The CEO must have the determination to replace orders, memos, KPIs and nitpicking with praise, lots of listening, and clear obstacles out of the way to give people true freedom to operate.  The Chief Executive must be on a mission to change everyone’s perception of management Doing things upside down is nothing like what they teach at management school.  In doing so, they must understand the importance of personality and identify the drongos who would obstruct progress.

Don’t expect Upside Down Management to take root overnight.  Give it plenty of time – you have got to promote it, sell it and nurture it.  Everything has to be introduced by persuasion because that is the way you run an Upside Down business.  Upside Down Management may take years to establish, but eventually it will start to work….”

In a nutshell: the CEO must be 100% committed; pick the right people to help you make it happen; no compromises – none at all; and patience – can take five years.

What will it take to change the culture of the financial services industry?

Let’s answer this question of culture change in the financial service industry through the lens of game theory and the Prisoners Dilemma. At its simplest level we can say that there is a game going on between the financial services industry and customers/society at large.   The financial services industry can choose one of two options: co-operation or defection.   The same choice falls to customers/society.   Put this way it sounds like there is a balance of power between the financial services industry and customers/society.  That is not the case and that is the heart of the issue.

The setup is such that it ALWAYS pays for the financial services industry to adopt the practice of  ‘defection’ – to pay back the co-operative behaviour of customers/society by taking advantage of it to benefit the financial services industry.   So the challenge is to shift the industry and the key players (the shareholders and the Tops) to the practice of ‘co-operation’.  How to do that?  The simple answer is to change the structure of the game between financial services and customers/industry such that the practice of ‘defection’ hurts (a lot) and the practice of ‘co-operation’ pays.  That means putting place strong penalties for the Tops (going to jail) and the shareholders (massive fines) for practices that constitute ‘defection‘.   Which in turn means getting rid of ‘light regulation’ and replacing it with ‘smart regulation’.  And it means putting teeth into the regulators – so that they have the will, the skills/expertise, the resources, the permission needed to detect and punish ‘defection’ practices.   This means more than adequate funding, it means getting rid of the conflicts of interest at the heart of regulators.  Too often the regulators are cheerleaders for the industry players.

How likely is that to happen?  Not likely.  Why?  First, there is the practice of those at the heart of government going into the financial services industry, when they are no longer in government, and making vast sums of money.  Second, there is the practice of the revolving door between those that are in/represent the financial services industry. Who was brought into advise and help deal with the mess of the credit crunch?  The people who had played a substantial role in the mess and whose careers/livelihoods were invested in the financial service industry. To effect culture change in the financial services industry would require a change in these practices.  For example, making it illegal for any person in government to work with/advise anyone in the financial service industry during their time in government plus 5 years.

Now we come to the who question: who is willing to take on that task?  Which prime minister is willing to forgo the many millions to be made through consulting/advising/sitting on the Boards of the financial giants?  Yet, I am open to surprises and being surprised.  Who would have thought that Bob Diamond would be pushed out of his role as CEO?

Summing up

Culture is constituted and shows up through language and practices.  If you change the language and the practices – and make this change stick – then you have changed the culture.  Culture is always changing because practices and language are changing.  One of the biggest drivers of change in practices and culture, today, is technology.  The reason that the financial services industry does what it does is because there are no practices in place to punish players in the financial services industry for the behaviour that costs customers, cost society at large.

Europe: what does EY’s VoC survey tell us about the needs/behaviour of non-life insurance customers? (Part I)

A week ago I summarised my take on the Global findings from Ernst & Young’s “Voice of the Customer, Time for Insurers to Rethink Their Relationships 2012″. And I promised to take a look specifically at the European customer and the European market.  This series of posts honors that promise – staring today with the first post (Part I).  Please note that I am only looking into and sharing non-life insurance and the related customer needs/behaviour.  Let’s get started.

An introduction to the survey

The basis of the European findings is survey of 8,532 consumers of life and non-life insurance products between August and October 2011.  The survey covered the following countries: France, Germany, Italy, the Netherlands, Poland, Spain, Turkey and the UK.  As you can see that whilst these countries are relatively wealth in comparison to other countries, there are considerable differences in wealth and demographics between these countries.

What Are The Key Findings for non-life insurance?

The survey addresses the following five “key myths”:The future is online; it is only about price;good claims experience builds loyalty; customers don’t respond to cross-selling; and insurers can’t influence customer retention.

The conclusion? According to E&Y: “While there is some truth in the myths around how non-life insurance products are bought and sold, the reality is more complex.” That accords with my experience – the gold, the insight, the levers for effective action are in the details. Today, let’s dig one level deeper for each of the myths to learn what E&Y has to say.

Myth 1: The future is online

Accepted wisdom: use of the internet (online channel) is growing rapidly and in the future online will be the dominant channel for both research and transactions.

Research suggests / E&Y position: use of online channels is growing rapidly and customers want access to offline channels; insurers need to put in place an integrated channel strategy to accommodate customer needs & behaviour over the customer life-cycle (from research through to renewal).

Myth 2: It is only about price

Accepted wisdom: non-life insurance products are commoditised and therefore customers buy only on price – this one factor swamps everything.

Research suggests / E&Y position: Price is an important component of value but it’s not the only one. Many customers also consider and differentiate between provider on the basis of brand (trustworthy?), product features and previous experience. The importance of price varies both by geographical market and by the type of insurance product that is being bought.  For example, when it comes to private healthcare insurance, customers look for ‘indicators suggesting quality’.

Myth 3: Good claims experience builds loyalty

Accepted wisdom: a good claims experience generates customer delight and automatically leads to higher customer loyalty and brand value

Research suggests / E&Y position: customers expect a good claims experience and do not necessarily reward it; they do punish a bad claims experience.

Myth 4: Customers don’t respond to cross-selling

Accepted wisdom: customers resent insurers selling them more products – they don’t enjoy the sales process.

Research suggests / E&Y position: customers are willing to buy multiple products from insurers provided this is done in a certain way that creates value for customers.

Myth 5: Insurers can’t influence customer retention

Accepted wisdom: insurers feel they have little influence / control over retaining customers

Research suggests / E&Y position: customers are not keen on switching as it is inconvenient; insurers can keep more of their customers if they take the right actions at the right times – in particular during the ownership stage.

In Part II, I will be talking a deeper look at both Myth 1.  Specifically, what is the reality when it customer needs and behaviour when it comes to channels.  And spell out the issues and implications for insurers(as identified by EY).

Global: what does the Voice of the Insurance Customer tell us about customer needs and behaviour?

Ernst & Young have issued a report titled “Voice of the Customer, Time for Insurers to Rethink Their Relationships 2012”.  This report is based on a survey of 27,000 customers across 7 regions and covering 23 countries.  Here is the global summary:  EY-Global-Report-Global-Consumer-Insurance-Survey-2012.    I found this report, along with the webcast I attended, interesting and as such I wish to share with you the aspects that caught my attention.

What’s new?  Consumer behaviour and expectations are changing rapidly

This is how the EY report puts it:  “Customer behavior is changing rapidly. Technology, and in particular the growth of online and social media, is driving a fundamental shift  in customer expectations in terms of how products are marketed, priced, sold and serviced, and how companies are perceived. Pure internet businesses have set new standards for customer-centricity and engagement that raise the performance bar for players in every retail business sector.”

What is the key challenge for insurers?

There is a fundamental, structural, chasm between customers and insurance companies.  Insurers are product and/or intermediary centric models.  Buyers of insurance are looking for insurance companies to be customer-centred. The key challenge for insurers is to make the transition to a customer-centric mindset, business model and operating design.  This is a big ask because insurers in the mature economies (e.g. USA and Europe) as they have ‘extensive legacy operations’.  For example, just changing the IT platform (all the IT systems including all the associated databases) to enable a customer-centred operating mode is a huge challenge.  Another challenge is gluing up the channels so as to enable the insurance buyer/customer to interact seamlessly with the insurer using channels of his/her choice – including switching channels in the midst of doing a job e.g. researching and buying.

What does the global survey tell us about the needs of insurance buyers / customers?

Whilst the majority of customers are satisfied/highly satisfied there is a sizeable minority of buyers who are not confident the product is right for them. Why?  The information that these buyers need (and the way that they need it presented) is missing.

They want to be able to trust insurance providers and build long term relationships.  Specifically, they want to be confident that the products that insurers are selling are right for them (the buyers) and meet their needs.  In other words, they want to be certain that what they think they are buying is what they are buying – no misleading words, no hidden catches and exclusions…

Insurance buyers are looking for a transparent and simple products along with a simple, transparent and convenient buying process.  Notice that the buyer wants insurers to make it easier for them to understand the products on offer, to pick the right one and then easily buy using the channels that are most convenient including switching between channels (e.g. web and call-centre or vice versa).

Customers are looking for value to be clearly demonstrated, reflecting a balance of price, product features and service tailored to their needs.  The more competitive the market the more important it becomes for insurers to demonstrate the value that they are providing other than price.  In other words answer the question “Why should I buy from you and not your competitor who has as similar product at a similar price?”

Customers expect the insurance provider to deliver against the buyers expectations of the product and of customer service.  In other words the ownership phase and associated customer experience matters to customers even if it does not rank that high for many insurers.

How well are insurers doing against these needs and expectations?  According to EY: “The survey shows that the customers’ perceptions are that the industry is failing to deliver this in some key areas.”

Are there any big differences between life and non-life insurance from a buyer / customer perspective?

I noted two big differences, in the word of EY:

“Non-life insurance lends itself more to internet purchase than life and pensions, given the higher customer familiarity and comparability of the products. In all countries we found a growing trend to use the internet to research non-life products, although levels of actual purchase vary considerably between countries.”

“In non-life insurance, price is often the main measure of value since products are more comparable and frequency of purchase drives greater customer familiarity. But in some territories, brand and reputation are more important criteria.  In highly competitive markets characterized by price transparency, there is a tendency for prices to converge. This leads to non-price factors such as brand becoming more important selection criteria as customers search for a way to differentiate between providers.”

What does EY recommend for non-life insurance?

EY advises insurers to focus on convenience and value by:

Providing a seamless customer experience by integrating online and offline channels. Thus allowing the insurance buyer / customer to  use whichever channel works for her at a particular point in time and be able to swap channels and continue where she left off, seamlessly, in the previous channel.  Notice this means integration such that any and all customer related data is shared across channels – a single view of the customer that is in operation in real-time.

Making it easy (simple, convenient) for insurance buyers to buy and for customers to renew – across whichever channel/s they choose to use. For my part I do not believe that EY go far enough.  It is also important for insurers to demonstrate value of choosing / sticking with the insurance providers.

Making the customer feel valued after he has purchased and before the renewal comes up. This has to do with useful communications from the insurer to the customer during the ownership phase AND a service culture that ensures that the customer’s experience of interacting with the insurers matches his/her expectations.  Incidentally, the research shows that a poor claims experience drives churn but a positive one does not drive loyalty – customers expect to be treated well during the ownership phase.

Segmenting the customer base and understanding the needs, behaviours and profitability of each segment. This will allow you, the insurer, to manage the risk and improve retention in a profitable manner.

Developing and manage insurance brand(s) so that the value proposition and key messages are clear and communicated effectively in/across the digital world.

What does EY recommend for life and pensions insurance?

EY advises a focus on improving customer trust and confidence by:

Putting the customer at the centre of the business model: offering the right product, at the right time, to the right customer and following through with service that matches the customers expectations and responds to his/her needs – needs change.  Clearly this means building and exploiting a customer insight capability.

Working with intermediary channels AND building a direct relationship with buyers / customers so as to generate insight, anticipate and meet their needs. The key challenge with the intermediary is to drive the right behaviour – behaviour that creates value for customers and enables longer term relationships.

Putting together a suite of simple (to understand) and transparent products that meet the needs of customers.   The idea is to enable the customers to buy easily – with confidence.

Making it easy for buyers / customers to access relevant (and easy to understand) information and products online – supported by offline personal interactions where necessary.

Building trust by crafting and delivering a great customer experience across touchpoints, across the customer journey.

Rewarding customer loyalty with incentives that recognise the worth (LTV) of the customer’s purchasing behaviour and loyalty.

Improving customer retention by doing a better job of getting at and dealing with the underlying drivers of churn.

Final Words

I will be doing a follow up post which dives specifically into the findings for Europe.  I have a vested interest in this as I believe that would be of service to a group of people that are near and dear to me.

I wonder if all categories of non-life insurance show the same customer needs and behaviour.  Might there be a category or two that is a mix of life and non-life needs?