Dr Nigel Wigram is the client relationship manager at Old Mutual, South Africa`s largest insurance company. Old Mutual offers a wide range of products (including life assurance, group assurance, pensions and unit trusts) through a variety of direct and intermediary channels to eight million people on its client base.
"To understand our customers fully and service their needs well we need to look at data across several dimensions: the customers themselves, the products they hold or do not hold, and the sales channel," says Dr Wigram, who has served with the company for 36 years.
Up until the end of 1997, getting this sort of information was an extremely time-consuming process. "Typically sales people had to wait six weeks to get an answer to a specific query. Everybody recognized that the existing batch systems were running out of time and could not support our need to be more responsive to customers."
In July of 1997 the decision was taken to move all of Old Mutual`s customer relationship management data into SAS data sets. Proof of concept followed a month later and in December 1997 the new system was rolled out to users. "At this first stage in the new solution, query times were cut from six to one week. By the end of April 1998, we will have this reduced further to 48 hours," says Wigram. "In addition, we have made cost savings on our information delivery in the order of 200,000 to 250,000 Rand per month. What this means is that the payback period for SAS software can be measured in months or even weeks, which in my experience is quite exceptional."
Old Mutual can now more easily find out the answers to complex questions. "For example we often want to interrogate on the basis of negative as well as positive criteria - such as `which customers who meet these characteristics do not have either product X or product Y`. This used to require a complex two- or multi-stage process but now it is a greatly simplified single task," says Dr Wigram.
Clearly, an important aspect of managing a customer relationship over time is to have historic data on the customer. In December 1997 Old Mutual started integrating the SAS data sets into a more formal data warehouse structure. "Previously all we had was a monthly snapshot of our customer base. Now we have a pool of customer information that is updated on a daily or monthly basis, combining all of the product information relating to customers," says Dr Wigram.
The new data warehouse gives Old Mutual the opportunity to analyze customer information by household as well as by individual. "Such information can help us to service our customers much better, and, as a by-product, profitable sales leads will be revealed. For example, every time a customer notifies us about a change of address, we now get a full report presenting the company`s relationship with the customer across all lines of business. So we can ensure that the change of address is implemented for all the products held within the household, and tailor a suitable communication to the customers welcoming them to their new address. It is one more way in which we can demonstrate our attention to customer care at an individual level," says Dr Wigram.
Old Mutual has adopted the approach recommended in SAS Institute`s CRM Methodology: implementing the SAS Solution for CRM in a series of iterative stages, each one delivering business benefits and therefore an early return on investment. "It is an approach which helps to win and retain the support of senior management, which is essential in high-profile projects," says Dr Wigram.
In January 1998 Old Mutual started digging deeper into their customer data using SAS Institute`s new end-to-end data mining solution, SAS Enterprise Miner(tm). "Our first application was to analyze which customers were leaving and under what circumstances" says Dr Wigram. Answering this question is a challenge for all companies in the insurance and financial services sector, where high customer attrition in the first year or two is extremely costly. Enterprise Miner can reveal patterns in data that predict future losses. "We have some good pointers, in particular concerning the service from our intermediaries, and we are already taking action on this information. Next we will use Enterprise Miner to examine patterns in repeat purchasing."
Dr Wigram believes that effective customer relationship management requires flexibility in information delivery. "You need to adjust services continuously as you learn more about the customer`s changing needs." In just a few months SAS software has already paid handsome dividends in making Old Mutual more responsive to customers. South Africa`s leading insurance company is counting on the power and flexibility inherent in SAS software to deliver many more benefits in the months ahead.
Share