To begin with, a solid understanding of customer relationship management is required. At the core, CRM is the integration of systems and business processes in such a way that leverages the information that a company has about a customer to provide that customer with individually meaningful interactions in order to maximize the probability of realizing that customers full lifetime value. Or, more simply, when a customer contacts a company and the interaction is positive due to the companys recognition of that customers relationship with it, the customer is dramatically more likely to continue the relationship.

Over the last several years, there has been widespread focus primarily on the implementation of CRM systems. However, a fundamental strategy to build and strengthen customer relationships is critical to the success of any CRM system. Statistics indicate that as high as 70 percent of all CRM implementations in the last several years have failed to meet the success criteria as defined by the adopting organization.

Additionally, the typical corporation views the customer service associate as an entry level position, failing to realize that often they interact with more customers in a day than many employees will in a year. Therefore, it is especially important for the company to provide the associate the proper means to manage customer relationships to ensure retention and maximize revenue. What do customers really want and how can insurance companies profit from satisfying consumer behavior?

One trend seems clear. Customers want it to be easy to do business with their insurance company, resulting in fast, accurate, and quality resolution of questions and problems.

One strategy employed by some property and casualty insurers to exploit the claims experience is to provide “sign and drive” roadside assistance on their auto policies, versus the more traditional option of reimbursement towing and labor coverage.

Traditionally, towing and labor coverage required that the customer: identify and contact a towing or road service provider; provide payment to the service provider at the scene; submit a claim to the insurer for reimbursement; and only interact with the insurer after the “self-service” process was completed.

Because the customer makes all of the arrangements and must request reimbursement, traditional logic maintains that complaints are eliminated and costs reduced. This logic is directly counter to both common sense and hard data. After all, why would anyone want to do business with a company that takes money for a service, adds little to no value to that service, and creates obstacles to receiving reimbursement for that service?

On the other hand, “sign and drive” roadside assistance enables the customer to: interact with “their insurer” through a toll-free number; receive service via a network of service providers; sign the road service invoice; and continue on their way, with no payment required.

In addition, the insurer has the opportunity to “touch” its customers in a low-cost, low-risk, high-value stressful situation. Customers can feel comfortable that their chosen carrier will be there for them when the really big emergencies arise.

The data collected from individual interaction with customers is invaluable to understanding the entire customer base and identifying trends in behavior. As a result of the implementation of a customer relationship enhancement program such as “sign and drive” roadside assistance, real-time data provides insight into customer behavior that may not be otherwise available.

When developing a CRM strategy, consider the following: With higher insurance premiums, and increased competition, how can you offer your customers more value? Can you impact customer satisfaction by servicing customers more frequently? Will you be able to collect and leverage data as a result of the program implementation?

In the end, retaining customers is the only real measurement of a CRM solution. For insurers, this process begins by understanding the needs of the customer base and delivering solutions that meet the increasing demands of todays time-restrained consumers.

Scott Echols is vice president of Cross Country Automotive Services, based in Boston.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, January 27, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.