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Simply put and to state the obviousthe customer-centric approach places the customer at the center of policy-related processes instead of the policy: As such, it may appear that this is simply an exercise in semantics; it is not. Consider a business process that sends a welcome letter to a customer the first time a policy is bound for the customer.
When business processes, and by extension, business systems are policy-centric, it is difficult to determine whether a policy has been bound for a new or an existing customer.
The result is that the welcome letter either is not sent at all or sent each time a new policy is bound. To illustrate this further, consider a surgeon and his wife who have life, health, automobile, home, and medical-liability policies.
The fact is that these policies are most likely written by at least four, and perhaps five different operating companies. In this circumstance, it would be virtually certain that this couple would receive five welcoming letters.
Now if two or more of the carriers involved belong to the same corporate parent, this customer will receive multiple letters from what appears to be the same company. If this were the extent of the problem, there would be little issue.
However, many more examples of the lack of customer focus exist. Being asked for the policy number when calling in a claim, receiving multiple bills for multiple policies from the same carrier, not automatically receiving multi-policy discounts, having to endorse five policies for a change of address — the list is actually quite long.
By contrast, if all of the related companies adopted a customer-centric policy administration model, all of the information about an individual customer would reside in one place. Not only would just one welcome letter be sent out, but the customer would actually receive thanks and discounts for buying from the same corporate entity as well.
The family in our example would receive one bill, and if they moved, they would have to make one request, not five or six, for a simple change of address. Two clarifications are needed at this point. First, we are not advocating that carriers offer all lines of business to all of their target customers simply to satisfy them.
What we are advocating is that carriers look at customer needs, and determine whether those needs are being adequately met by their current product- and service-related processes.
Who or what is the customer? To become customer-centric, it is necessary to understand customer needs, divide customers into segments based on shared needs, and finally create insurance product and service offerings that focus on each segment.
Before one can do this, however, one needs to correctly define the customer and ensure that all relevant customer attributes are captured and understood. In insurance terms, the failure to adequately understand and define the customer will cause the carrier to lack awareness of possible insurable assets, exposures, and perils.
Over time, this may lead to underwriting losses and stunt premium growth based on product and coverage extensions. This definition, however, works only in limited circumstances, most often where single people require coverage. Additionally, we have issues of family hierarchies.
A teenage child who leaves home and goes off to college with the family car introduces yet another complication. While at some level, the student is covered by policies of the parent household, she may need to eventually split off and become a new, although related, household.
Finally, we have the fact that families may own a wide variety of assets that require insurance. These include the usual homes and cars, and also include exotica such as collectible cars, RVs, mobile homes, boats, etc.
As such, when selling a liability policy to a customer, it is recommended that the insurance company be aware of these assets. Based on the above, we can identify several customer-based processes that can be initiated both by the customer and the carrier:The moment a product could be improved, but is not, the customer centric business model isn’t being followed.
Once that point of emphasis is met, there are three primary characteristics of this business model that are followed by every business . A product-centric organization is one that is focused on the products it brings to market rather than the customers that buy those products.
It looks to develop new products by leveraging technology or specialized skills that exist in the company. Customer centric is a way of doing business with your customer in a way that provides a positive customer experience before and after the sale in order to drive repeat business, customer loyalty and profits.
Cross-Selling the Right Product to the Right Customer at the Right Time Shibo Li1 Kelley School of Business Indiana University E. 10th Street.
"Product Centric Business Model & Customer Centric Business Model: A Comparative Study of Brac Bank Uploaded by Priyanka Barua Brac Bank Is a Bangladeshi first ever bank to introduce the idea of customer centric business model in the banking sector.
Anurag Wadehra -.
Anurag is the Vice President of Marketing and Product Management at Siperian Inc., developers of an award-winning, adaptive platform for customer-centric master data management. For further information, contact the author at [email protected] or visit the company's Web site.