I have completed my MSc in Strategic Marketing from the prestigious Cranfield School of Management with distinction. I have worked for a top financial services company as a Marketing Executive for several years.
Apart from that, I do independent Marketing Research and Consulting and have completed various research projects involving both primary and secondary research. I have written many papers as well as a 20,000 word thesis during the course. I specialise in Marketing, Business, Communications, Leisure Management and Tourism.
Customer relationship management and complaint handling – Norwich Union
Customer Relationship Management, like all the other marketing faculties, is created to achieve one of the most important objectives of creating competitive advantage. Now Vargo and Lusch (2007) argue that ‘the only true source of sustainable competitive advantage is knowledge’. Further they also suggest that organisations can no longer rely on ‘competing through service’ alone (Vargo, et al 2007). In their recent findings, they emphasise that the entire organisation that must participate in the ‘service-dominant’ logic (s-d logic); one which is built upon integrating processes among customers, partners and employees (ibid 2007). They emphasise that ‘doing things with the customer versus doing things to the customer is a hallmark of s-d logic.
Collecting vast amounts of information on the customer has become easy in information age of today, but the real challenge is analysing this information ‘to design customer experience from jobs and outcomes perspective’ (Christensen, et al 2007). Rapp (2000) suggests that ‘Starting point in CRM is the customer and the customer problems that need to be solved. Therefore, customer processes have to be analysed and subsequently the company’s business processes have to be designed to match and support the customer processes’. While information technology has afforded the ease of gathering and storing customer information, lapses in analysing that information cannot be blamed on the CRM systems. Tesco, with the aid of Dunhumby, have done a commendable job of this which shows in the success Tesco is achieving. Similarly complacency about the customer has put the likes of Dell on a difficult path to recovery.
Building on this, an attempt has been made in this report to analyse a customer experience and its associated outcomes showing:
- That mismanagement of knowledge about the customer can lead to dissatisfaction and irreprehensible damage to reputation of the organisation.
- How the participation of every individual effects the value creation and the total customer experience
- That continuous update, measurement and analysis of data and application of it to eliminate service failure is fundamental to gaining the right knowledge to achieve the sustainable competitive advantage.
It will also show how service can be improved to create a positive customer experience using various tools. The structure will include discussing the current company process map of the insurer Norwich Union for complaint handling, measuring a negative experience with Norwich Union against ‘SERVQUAL’ and ‘EXQ’ (Klaus 2007) and describing it in terms of the customer expectations-experience perspective. Finally, a discussion of the customer data management perspective, and how the company process perspective can be adapted to leverage robust CRM techniques and data to create a positive customer experience in the wake of a complaint made by the customer.
Insurance provides the peace of mind and necessary protection for individuals. It is an essential service. In the highly competitive insurance market in the UK companies need to understand not only the basic ‘Job’ customer needs them to do but also the dimensions of that job that allow that ‘Job’ to be done better. This encapsulates the logic of ‘Jobs-to-be-Done’ (Christensen, et al 2007), building on ‘Value-in-Use’ (Lusch & Vargo 2004) and the ‘SD-Logic’ (Lusch, et al 2007).
The customer in this case is trying to upgrade their insurance and the ‘Job’ she is trying to get done is better protection and greater peace of mind. The primary ‘Outcome’ here would be to ensure that the higher level of protection is achieved in the fastest time and with a hassle free transaction. For a full view of the insurance company’s customers’ ‘Jobs-to-be-Done’ Perspective, please refer to Appendix A.
Company Complaint Handling process:
Norwich Union is the number one insurance provider in the UK. They claim ‘Excellent customer service and product innovation are at the core of our general insurance business.’ (www.norwichunion.com). This company motto leads us to believe that they are a dedicated organisation caring for its customers. It has an extensive portfolio of insurance products and also has dedicated customer care lines devoted to each one of them.
Their complaint handling procedure is ‘As soon as we hear from you, we will take ownership of your complaint and do everything we can to resolve your concerns. We’ll let you know within five working days how we’re getting on. While we’re handling your complaint, we’ll always keep you informed of progress’ (www.norwichunion.com).
The promises the company makes, the profitability it achieves and the huge data that it has on its customers gives an impression that it is a totally relationship-focused company specially since it has a dedicated Customer Relationship department.
The company complaint handling process map is created to address the customer complaint in a way that shows the contact with customer is minimum after a complaint has been received. Thus it does not do justice with the company’s policy of keeping customer informed. The only contact happens when the customer is really upset and escalates the complaint. There are various levels of complaint handling which makes the process painfully slow and reduces the responsiveness. For a detailed view of this process map, please see Appendix C – Company Process Map
SERVQUAL, EXQ and the Customer Perspective
After all the promises made by Norwich Union it came as a rude shock for a customer who has a health insurance policy with the company that none of the above promises were kept by the company. The customer called to complain that after twice requesting some changes to be made in order to upgrade the existing policy to include Critical illness cover and being assured twice that the papers will arrive in five working days, a month had gone by and papers did not arrive for the customer to sign and send back. The customer complained about the situation and, unhappy with the lack of response and delay in handling the matter, asks to speak to the manager. The manager calls back and offers an apology and then a solution to the customer.
The customer’s main concern apart from not getting the desired job done is not being kept informed.
With this in mind, it is imperative to measure the experience against both SERVQUAL and EXQ measures, to understand the gap between what was anticipated and what was expected and how this affects
- Norwich Union’s reputation
- Customer expectations
- Relationship with the customers
- Creates room for further development
SERVQUAL AND EXQ together provide ‘a valuable insight to the customer experience and enables the organisation to make adjustments in the processes and utilisation of customer information in order to improve weak-links and customer satisfaction’ (Klaus 2007).
The main dimensions of both SERVQUAL and EXQ are discussed here. For further detailed outlines, please see Appendices B and D, SERVQUAL/EXQ and Customer Expectations-Experience Perspective, respectively.
The map (appendix D) shows that the entire customer experience was a very negative one with the company failing the customer in every dimension apart from assurance, which albeit positive, came late. The solution offered to the customer is that the changes will be made and a new policy document will arrive with registered post the next day. This shows that the assurance and apology offered by the manager are a positive in the customer experience.
In this experience the negatives far outweigh the positives. The very process of complaining by the customer is negative for the company’s brand reputation. The delay and especially not keeping her informed added to the negative brand reputation as to the emotions it generated. The whole process of the customer being compelled to call back for an update from a company who promises on its official website that ‘While we’re handling your complaint, we’ll always keep you informed of progress’(www.norwichunion.com) is a very significant event reflecting negatively on aspects such as emotions, reliability and outcome focus. The formal apology given by the manager did not help in the customer feeling that company understands enough of what she had gone through, hence shows negative on the common grounding as well. A personal letter of apology by the manager would have helped immensely here.
Data Management Perspective (CRM Driven)
Joe Peppard (2002) says ‘CRM is not a product to be purchased; it is a discipline, a framework and integrated approach to managing relationships with customers that continuously requires improvement’ There are many companies who can buy the software and store the data on the customer but very few who can actually use right data at right point to their own advantage.
In case of the insurance company’s customer, the CRM driven data management can immensely increase the customer satisfaction levels with respect to getting the ‘Job’ done by efficiently handling the complaint and removing the complacency displayed by the company with use of right data at right point. The CRM driven process will
enable the data to be used better by each point of customer contact from the call centre to the reporting and analysis department. With CRM driven data management, the company will be able to offer First Contact Resolution to the customer, which will prove to be one of the significant factors in creating better relationship with the customer.
Here is how the data will be used by:
1 Call Centre: Being the first point of contact for the customer, keeping up to date information about the customer and also gaining this information (e.g. change of address or tel no) from the customer is the vital job of a call centre. They can detect, in this instance, that the reason customer did not get her documents in time was an address error. They could solve the customer complaint with First Contact Resolution.
2 Tier 1 Complaint Handling: With the information available from the database about the customer’s contact details and personal profile, efficient handling of the complaint is possible. The information will prove valuable in updating the customer and keeping them informed. It will help to track the activities of the actions taken by call centre.
3 High level complaint handling: At this level quick resolution of customer complaints becomes the necessity. With information available on the actions taken so far and the actions needed to resolve the complaint, people here can offer a comprehensive solution to the customer and improve satisfaction level. This alone will create a positive assurance and responsiveness and reverse the negative effects.
4 Reporting and Analysis Department: This will play the all important role of analysing the gaps in the process of complaint handling. They will then be able to develop new robust systems to handle the complaints in order to be in line with the company’s promises, like keeping customers informed at all stages. Different measurements and surveys for gauging customer satisfaction levels and then feeding back the information to the concerned managers and ultimately to the call centre operatives will create better responsiveness, efficiency and ultimately a better relationship with the customer.
Company Process Perspective (CRM Driven)
After analysing the customer experience with the Norwich Union and looking at their complaint handling process it is quite apparent that changes are needed to improve
- Data management
- Data analysis
- Measurement and communication
- Post resolution contact
The CRM driven map shows how the main customer concern of being kept informed is resolved and that at each stage, contact for updating the customer is involved. The complaint handling is made more efficient by the reporting and analysis department, who will actually track and remove the discrepancies in the process and help in creating robust techniques to tailoring the insurance product to customer requirements and avoiding or minimising the complaints in the first place. The data gathered at various levels will be updated and kept up to date and readily available for people to use to enhance the value proposition offered to the customer. Once the complaint has been resolved contact, re-establishing the contact with the customer to bring up the relationship in order to avoid any further complaints is also addressed.
Complaint handling is a sensitive process. The very process signifies that the customer already has had a bad experience with the company on some level. Therefore care must be taken to resolve the complaint in a swift and efficient manner to minimise the damage done. An attempt has been made to analyse the complaint of a customer with regards to the insurer Norwich Union. The CRM driven data management and complaint handling maps develop a robust system that does just this.
The reporting and analysis department try to analyse where the gaps have been in the process along with the measures necessary to avoid the complaint arising in the first place.
Although complaints can never be completely avoided, relationships with customers can make or break depending on the company’s handling of them. The wise saying ‘Glory lies not in never falling but rising after every fall’applies here perfectly.
Norwich Union insurance company website: www.norwichunion.com (data appropriate as at 09/01/08)
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