Bridging the customer relationship void

Ask any broker if they would be interested in a process that brings together useful information about customers, sales, marketing effectiveness, responsiveness and market trends and many will show interest. Yet if you want to see a broker's eyes glaze over then mention three letters: CRM.

Perhaps this is because customer relationship management conjures up images of hugely expensive and complex technology, of vast servers and techies, of call centres and financial services conglomerates as well as nonsensical jargon, all so far removed from the world of the high street broker. However, CRM in its broadest sense is relevant for all brokers and there are already some pretty smart operators in the sector.

Brokers wanting to implement a formal CRM strategy, or improve what they are already doing, need to first take some time to decide what they want to achieve. In some cases it may make sense to bring in an outside consultant, though talking behind closed doors can only go so far because it is critical that, if a new way of working is introduced, there is buy-in from staff along with plenty of communication and training.

Adrian Potter, senior consultant at management consultancy Winchester White, comments: "CRM is nothing new but if it's an area that brokers have previously discounted then it may be worth considering again; the cost of technology is no longer a barrier to entry. It is surprising that more brokers do not make use of as simple a tool as business contact manager, part of Microsoft Outlook: it's low cost and an easy way to organise customer information."

However, he adds that the most important factor, as alluded to by numerous experts, is that CRM is only as good as the effort made by employees.

Potter highlights: "A customer might contact you about insuring a horse box; based on this information, it is then possible to look at insuring the horse and offering personal accident cover. It's about talking to customers and showing that there really is a difference in personal service.

"Simply repeating the same message at renewal is pointless: that customer may no longer have the horse. Circumstances and needs change and using out-of-date information to try to sell can alienate customers and at worst, make it more likely they will go somewhere else. You have to constantly refine data and then know which customers are going to bring the highest return. My advice is to not bother investing time or money in CRM if you can't be bothered to do the work."

Andrew Linnell, director at Hansen Young Consultants, adds: "Mention CRM and brokers will switch off but they need to take time out from the day job to think about what they are doing in this area.

"Get CRM right and you should easily be able to add at least 10% more business." He says that CRM is about "working on the business rather than in the business" and involves looking at the whole service proposition: sales training; assessing ways of winning more business from existing customers; and working out which staff incentives will work.

Another consultant, Kate Penrose, director at Salient Solutions, agrees: "CRM does not need to be difficult, it's about making use of information technology but also having the personal touch. Also, rather than having to buy new technology, there could be ways of managing data far better on existing systems; brokers need to make sure their staff are trained on using them though. I also believe in proper incentives too for where staff are working with data and cross-selling."

She adds that a broker may need to take expert advice where it has made acquisitions: "Having compatibility between systems for CRM is a huge issue and if brokers are in this situation then they should be taking expert advice on resolving it."

People-centred approach

CRM does not have to involve an IT spend as David Perry, sales and marketing director at consolidator Cullum Capital Ventures, explains: "People think CRM is synonymous with software and that for brokers it's not relevant: we decided to build a strategy around our people."

He explains that, in each of CCV's branches, a CRM champion was appointed, typically who had oversight of processes and could recommend ways of working more closely with clients. The company remains on the acquisition trail and has 29 offices and around 700 employees.

Perry gives an example: "In each business we asked the CRM champion to look at the ways in which they were communicating with clients and to make sure that the information we held was up to date. For example, in one case, a couple had a 17-year-old son who was added onto the parent's policy and when he went away to university this information was not added to our records. This meant our quote appeared both expensive and inaccurate. No wonder people can want to find a cheaper quote elsewhere."

He explains that it can work in having a culture in which broking staff can talk to customers: "Allow them to spend more time chatting with customers and then ensure that information is accurately recorded. Along with improving the quality of data we held, we also rolled out a training programme to branches called Six Steps to Successful Selling."

CCV's head office surveys all employees to see if they prefer this way of working. Perry comments: "I was a bit sceptical because I know that people can't always be bothered with staff surveys but, incredibly, we found that everyone thought it was a great idea; it meant they had more support in their jobs and they liked the new way of doing business. We're keeping the CRM champions and this is now an ongoing project for us."

Yate-based the Jelf Group has made numerous high-profile acquisitions in recent years and commercial director Phil Barton explains: "CRM is a key part of the business strategy. You need to take an holistic view: people are going to be working in different locations and have different specialisms but they also have to work together."

He explains that Jelf uses Goldmine, a business contact management system, which he says is good value and can be used in conjunction with existing software, such as Acturis (for general insurance) and First (for financial services).

Barton says: "You need a database for all your clients and prospects but it goes beyond just capturing data. There has to be a relationship: too many brokers are focused on just selling products rather than the consultative approach. This means that someone who is seeing one of our financial advisers might also need high net worth household.

"Or, a broker could be talking about liability or property security with a commercial client but could also ask about key person cover. There are natural crossovers and we think it is important to reward people for introducing clients to other parts of the group - you don't want people working in silos and this is a good way of growing organically."

Broking software houses have traditionally been focused on back-office facilities but CRM is also becoming a differentiator.

Transactor, for example, works with large contact centre-based brokers such as Adrian Flux. The software company offers CRM facilities as part of its standard offering, providing tools to allow users to capture data and add new screens to existing categories within the Transactor environment. The company's managing director, Ray Vincent, says that the sector still has some way to go, though: "In terms of technology, brokers are nowhere near as advanced as the banking and credit card industries and, while some know they want to improve, there is confusion as to what they want. What type of management information are they looking for? Do they want to monitor staff? How is it going to tie into marketing activities, including e-mail and text messaging? There is a lot of potential here but it is early days."

While it may appear that CRM is more suited to high-volume commoditised business, it would seem that commercial brokers are, in fact, taking the discipline more seriously. London-based HSBC Insurance Brokers is a case-in-point: the business is corporate focused, having sold its SME book to Axa, although it still has an agreement with its banking arm to broker for its small and medium-sized enterprise customers.

HSBC product manager Adam Gray says: "We wanted to take a more sophisticated approach and, around two years ago, we went to the market to talk to companies that could help us. We were already with SSP and were open to using another provider for CRM but it came up with the best solution: we were able to add a module and not have to do any re-keying."

Head of sales at HSBC, Alastair Torbet, adds: "We were using different databases across the business and we needed to become joined-up; we wanted existing clients as well as prospects. Using the system has become a fundamental part of what we do.

"It has brought us significant benefits: you need to know who you are targeting and to develop a pipeline but any system will only work if you provide the right support and training. You cannot presume that a new system is going to be easy to use without this."

Gray says that the system now acts from cradle to grave and that it is also linked into back-office facilities like invoicing.

Meanwhile, Torbet says that the strike rate since CRM was implemented is excellent. Importantly, HSBC requires its sales and other relevant staff to use the CRM system and that their remuneration is linked to providing accurate data, both in loading and updating, to the system. Tornet adds: "It will only work if there is excellent information; we check who is providing this and also use this to assess bonuses. You need to have a strong incentive." Client information is focused on UK trade but it may be extended to international, London market business.

Integrated solution

Kevin Child, director at SSP, comments: "Brokers are realising the benefits that effective CRM can provide, both in terms of managing their prospecting activities and protecting their existing customer bases. A good CRM module eradicates the cost of a disjointed spreadsheet solution and increases the quality and quantity of the broker's communications, leading to better business performance."

Child continues: "By adopting their broking solution provider's CRM facilities, brokers are able to run their entire operation from prospecting through to claims from their broking software. Alternatively, there is the option to integrate their existing broking solution with a full-blown CRM suite, which can work well; however, if it doesn't have a two-way link then the company could end up with another data repository, which will mean re-keying data at some point. Choosing the right CRM solution for their businesses will allow the brokers to rapidly record validated new business opportunities and exploit cross-selling opportunities."

Personal lines broker BGL Group recently announced that it had selected Sword Ciboodle to implement an advanced CRM system. The business software provider has two million customers and a workforce of more than 2,000 people covering a wide variety of brands including Budget and Bennetts. It also counts aggregator comparethemarket.com among its customers, along with affinity arm Junction, which provides cover for brands such as the Post Office, Marks and Spencer, RAC and HSBC.

Legacy handling

Sword Ciboodle was selected by BGL Group to deploy its CRM platform, which allows new brands and products to be incorporated into the group's portfolio.

The software will also provide a standard interface for the company's contact centres in Peterborough, Coventry, Sunderland, Peterlee and Cape Town, South Africa, ensuring that employees have access to relevant customer information regardless of whether customers choose to interact by phone, e-mail, internet self-service or post.

The BGL project will be delivered in phases: the first is scheduled for the fourth quarter of 2009 and will see the delivery of a solution for handling new business and sales enquiries for BGL Group's home and motor insurance products. This phase will include processes-handling functions such as quote creation, quote conversion, cross-selling and correspondence creation. Subsequent phases will see the addition of customer service processes, including mid-term adjustments, renewals and cancellations.

The project will provide the BGL Group with the ability to customise business processes and rules based on variables including brand, product, marketing source, customer and adviser profile, giving the company a stronger selling point in the outsourced insurance provider market.

The product will be fully integrated with the firm's proprietary internal insurance systems as well as contact centre integration points such as computer telephony and web self-service.

Ian Henderson, operations director at Sword Ciboodle, comments: "Technology should be there to boost service and, in my experience, it is best not to take a big-bang approach. You should introduce new systems brand by brand so that they can properly bed in." He says that brokers now want to go beyond online quotes, that they also want online policy management.

He adds: "There are still brokers out there operating from limited systems on green screens but we are also finding a lot more interest in CRM from brokers now. Sword Ciboodle also works with Admiral, which has a number of different brands and wanted better integration and cross-selling opportunities."

Henderson argues that, for brokers that are serious about having advanced systems, now is the time to invest: "BGL is ahead of the curve in this area but brokers can benefit from advanced technology if they make full use of it."

Holistic offering

Looking ahead, Henderson believes that so-called life portals may become websites of choice for consumers. Life portals are websites that offer access to a range of complementary services that, alongside motor insurance for example, could also include areas such as the Driver and Vehicle Licensing Agency, HPI vehicle registration checks and car finance services. "It's going to be about integration and there could be opportunities for brokers that can add-in their services and extract data."

Richard Rickwood, BGL's associate director for IT applications and development, says: "Brokers may need to look beyond traditional software houses to boost CRM systems; Sword Ciboodle sits on top of our existing IT. We think this is a vital area to invest in because business is about being agile and responsive to change. We conducted a thorough market assessment and then did a lot of testing but the basics remain: you need good, underlying data and any system must be easy for staff to learn."

Insurers are also taking CRM seriously - and not just in direct insurance. Allianz recently announced that it was using provider Salesforce.com to enable its teams to share key broker information.

Paul Upton, chief executive at Evolution Underwriting, gives an insurer's view: "Our IT platform, Stingray, contains a CRM package we use extensively that allows us to manage our broker relationships. We have around 300 agencies, detailing e-mail and direct dial numbers. We know how much business we get from that broker and even their likes and dislikes."

Evolution's field staff enter details after every broker call and visit. Upton comments: "This is certainly something brokers could do...too many simply win business and then wait for renewal."

Upton continues: "There should be no barriers to CRM in terms of cost because packages can be web-based and low cost. What matters is making the effort. There are a lot of brokers that say client information is in their head or is in cards held in their cars; keeping and updating data so that it is of the highest quality should be done as a matter of course. It's a way of both protecting existing and winning new business. The broker that ignores this could lose out to another, more switched-on firm."

There is also a big brother aspect to CRM: managers can know who field staff are seeing and what business is being done. "When people are motivated, [surveillance] is not the primary purpose but it can be useful. Having data on a central system also helps other employees have up-to-date information if they need it," says Upton.

Meanwhile, Graeme Newman, business development director at CFC Underwriting, comments: "Making full use of Microsoft Outlook and Business Contact Manager is one of the most obvious ways for brokers to improve CRM. In a basic office package, brokers are probably using a small percentage of the software that could help them, so obtaining training in this area could be time well spent."

CFC Underwriting has its own Microsoft system and Newman says that CRM has been a core focus since he joined almost two years ago. The former Deloitte consultant says: "I wanted our data to be a lot more granular. Which of our brokers were giving us most business? With new brokers, what were our hit rates and how much more business were we doing online? This is the sort of information you need to develop business."

Staff compliance

Newman agrees that employees need to buy into the idea of CRM in order for it to succeed. "Training is absolutely crucial: you need to implement any system in an orderly way and show why capturing data and using it is so important." He says that brokers ending up with different systems as a result of acquisitions need to face the challenge by bringing in some independent and expert guidance if data is held in different locations: "You can't know your customers if there are different sets of data: there has to be integration and an effective change management programme."

A new year is fast approaching and various experts agree that now is a good time to put business processes under the spotlight. There is little doubt that brokers with desks awash with scribbled notes could do a lot better if they had a formal CRM strategy in place.

Mark Bates, chief executive officer at insurance software supplier RDT, believes that brokers need to take a fresh look at the subject: "There is a view among smaller brokers that CRM is going to cost them a lot of money. Yet the cost of software has dropped and the entry point may be lower and easier than they think. A few hundred pounds could see them up and running."

Bates continues: "If brokers want customers who care about service rather than just the lowest price then it makes sense for brokers to know what those customers are like. Brokers are often too predictable as to when they will contact their customers: if they know more about them then they should be able to do it more often and at the right time."