PRUPAC'S EVOLUTIONARY APPROACH TO CUSTOMER FOCUS EMPHASIZES COST REDUCTION

It may be that objectives can sometimes be approached through a grand, guiding conception, but that's not how Prudential Property and Casualty Insurance (PRUPAC) arrived at its e-commerce-based customer focus, according to John Heidelberg, vice president, e-commerce, and Maureen Areia, director, customer service, who spoke about "Defining and Achieving a Strategic Vision on Customer Service," at Insurance & Technology's Customer Service Leadership Forum on April 2 at the Roosevelt Hotel in New York.

"We didn't sit down three or four years ago and say, 'All right, what do we really want this to be in the end, what's the end-state vision?' or 'What's the architecture and how do you drive to it?'" recalled Heidelberger. "It's been more sort of feeling our way through those things: 'What's the most expensive thing we've got and how do we stop doing it?' or 'How do we make that expensive thing cheaper?'"

That most expensive thing turned out to be the telephone customer contact channel serving the company's customers, agents and third-party business partners. PRUPAC (a division of Prudential Financial, $371 billion in assets, Newark, NJ) has approximately 1.8 million policies in force and fielded roughly 3.5 million phone calls per year. "The focus for us has been to figure out cheaper ways to answer the phone or not answer it," Heidelberg commented. "Every time you pick that phone up, it's like money running out the door."

Heidelberg said he preferred the term "service focus" to service strategy because the company chose to proceed by way of "one-off initiatives" guided by a philosophy of "buying for what makes sense." PRUPAC sought to shift from the mono-channel call center to a contact center, through "giving people options, whether through the Internet or IVR, to engage us in ways they prefer and which are cheaper for us," Heidelberg said. PRUPAC also took advantage of an approach that had been more experimentation than vision. Early use of the technology "wasn't really a business decision to use the Internet to make or save money. It was more like, 'Let's try this technology and see if it's going to work for us,'" Heidelberger said. Only when that technology's feasibility was proven did the company look to adapt it to business objectives, he added.

As PRUPAC evolved its strategic focus, it was helped by partnering with New York-based IT firm Sapient, "to help us get out of our own way," remarked Heidelberger. Given the conservative nature of the insurer and an ingrained resistance to change, Sapient "worked with us, helping us figure out what our strategy should be, getting us energized around it, going out and talking to customers, talking to users, finding out from them what they wanted."

Strategic evolution was also helped by what Heidelberg termed a unique organizational model. "My organization is responsible for both the strategy, the ROI and the technological implications," he explained. "That helps me orient my technologists around understanding what the business benefits are, and have them react. On the other side, the business people in the organization understand the complexities and challenges faced by technology."

Translating plan into reality required revisiting the evolving strategic focus, according to Maureen Areia, who was responsible for implementation. "How many people have faced the challenge of picking up a project after the strategy has been developed and then having to move that through the tactical implementation process?" she asked the audience, adding, "and how many of you know how hard that is?"

As PRUPAC determined how to craft cheaper contact channels, primary challenges included arriving at an understanding of where the shifting strategic focus had arrived, and dealing with potential internal friction within the company. It was necessary to ask, "Who are the constituents within your organization that will resist change? Underwriters? Lawyers?" Areia said. "You need to engage them early in the process so that you get them on your side, or at least understand what your barriers are going to be going forward."

Externally, it was important to gain an understanding of the competitive landscape and the potential for adoption on the part of the proposed audience. The biggest challenge PRUPAC ended up facing was achieving adoption of new contact channels and self-service functionality on the part of agents. Agents often complained, "You're changing my work conditions," Areia reported, and were not receptive to partial functionality. The key, she added, was to get the early adopters within the agent community on board, and then "drag the rest along."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio