M&A Pains Stifle Efforts To Shore Up Call Centers

Insurance Networking News, August 2007

Bob Mueller

If you think your contact center (what used to be your call center before e-mail and Web chat were added to the customer service mix) doesn't do much for sales, you might have a look at a new study from Genesys Telecommunications Laboratories Inc. The Daly City, Calif., maker of contact center software recently surveyed 500 consumers in the United States, and found that almost half placed more importance on customer service than product quality, price or the vendor's reputation when it came to loyalty. A full 40% said they'd stopped doing business with a company solely because of a bad contact center experience.

Donna Fluss, president of DMG Consulting, a West Orange, N.J., company that specializes in helping clients build contact centers, says the centers should be playing a more significant role than just keeping customers happy and loyal-especially for insurance carriers.

"Insurance companies have an opportunity a lot of other organizations only touch on," she says. "The opportunities to up-sell and cross-sell are tremendous in the insurance industry." So far, though, "it's an opportunity waiting to happen."

One reason insurance industry contact centers lag behind some other industries when it comes to exploiting that opportunity, says Fluss, is that many carriers lately are the products of mergers and acquisitions, and they're still busy consolidating all the systems and processes they've inherited. "They've had to integrate many different operating environments, businesses, systems and processes, and they're still working in that direction," she says.

Although he might not agree that his company's contact center lags behind anyone's, Bill Maurer, assistant vice president and head of a 110-employee center at AEGON USA's Annuity Products and Services (APS) Customer Center in Cedar Rapids, Iowa, is certainly wrestling with the challenges mergers and acquisitions have brought.

"Right now, my staff is being trained on four different systems," he says.

AEGON's annuities business uses the Vantage-One policy administration system from El Segundo, Calif.-based Computer Sciences Corp. (CSC). When it acquired Providian Life and Health in the 1990s, it also acquired Providian's system. And, when AEGON acquired Transamerica in 2000, it got not only Transamerica's system, but another system that went back to a third carrier Transamerica bought some years earlier.

Eventually, says Maurer, all the systems will be consolidated, but meanwhile, he's cross-training some of his more experienced customer service reps on the other systems in order to handle needs of pre-acquisition annuity holders.

COSTS OF THE CONTACT CENTER

Although customer service reps at AEGON don't do any selling, there is a small group of 13 licensed sales agents under Maurer's purview. Their job is to try to retain annuity customers brought in by agents who no longer sell AEGON's lines.

But although the group is profitable, it doesn't make enough to pay for the contact center, and although it reports to Maurer, organizationally it's not even in the same group.

"Primarily, we are a post-sale, reactive service center," Maurer says. "We are not at this point turning those customers around to sell them additional products. We do not get in the way of our banks and wire house agents [AEGON's sales channel for annuities] to do that."

At Jackson National Life Insurance, a Lansing, Mich., subsidiary of Prudential PLC in the U.K. that sells annuities and life policies, the contact center plays a similar support role. Where AEGON's service reps answer calls from both its sales channel and its end customers, Jackson's contact center concentrates on its agents and brokers.

"Our focus is to be efficient, to make it easier for the sales reps to spend more time selling," says Laura Prieskorn, Jackson National's vice president-policy owner services.

MEASURING SUCCESS

Without sales and profits to consider, both AEGON and Jackson work with customer satisfaction and contact center performance metrics. Jackson recently won "world class service provider" recognition from the Service Quality Management (SQM) Group, a designation that requires at least an 80% "very satisfied" rating from contact center users. Jackson scored 84%.

"Several of the metrics that are presented in the SQM results are aligned with goals we have in the service center," Prieskorn says. "We recognize the producers as our customers and we recognize that their time is more valuably spent with their end customers versus with us. We want to make sure that when they're calling, we're on the phone with them as little as possible; we want to make sure that our call times are short, but efficient."

Customer service goals tend to collide with budget restraints in contact centers, and AEGON uses a mix of technology and training to keep customers happy and contain costs.

Back in 2005, Maurer recalls, AEGON's service level goal-75% of calls answered within 30 seconds-was getting costly. "I was given the challenge of adjusting our service level to optimum rates while decreasing head count through attrition," he says.

One response to that challenge was a virtual queuing system from Virtual Hold Technology in Akron, Ohio. Virtual Hold uses algorithms to estimate wait times to speak with call center agents. When the wait time exceeds a threshold set by the user, Virtual Hold offers callers the option of a callback, and holds their place in the calling queue. Instead of having to stay on the line for, say, five minutes in order to speak to a rep, the system automatically calls the customer back when the next available rep can speak to him.

Customer reaction to Virtual Hold has been "incredibly positive," Maurer comments. Use of the system depends on how often calls queue and how long those queues last, but Maurer estimates that customers opt for a callback on seven to 12% of all calls to the contact center, and that 98 to 99% of those have been called back successfully.

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