Riding the Whirlwind

Strategic Interactive Marketing for the Insurance Industry

Key Points:

Telecommunications networks and services are growing at a tremendous rate.

In the future many appliances will be linked to the Internet.

5 .6 Telephones and Smartphones

5.6.1 The recent fiasco with the telephone renumbering schemes has highlighted the explosive growth in both personal and business telecommunications. Telephones provide access to a wide range of services, many of which are available 24 hours per day, 7 days a week. Examples are:

• literature requests in response to media advertising
• quotations and sales order processing
• home banking using either a tonephone or by speaking to a clerk.
• information services, such as unit trust (mutual fund) prices.

5.6..2 Mobile communications will continue to grow until nearly every Western citizen has their own personal communications device. Additionally, cars and home equipment will also have communications capability, with many connected to the Internet.

Smartphones will have e-mail and web capabilities.

The new facilities will be used by consumers to help manage their fragmented and complex lifestyles.

Home PCs will manage all communications into a home.

- Need to Manage Complex Lifestyles -

5.6.3 Fragmented and complex lifestyles encourages consumers to acquire more devices to handle their communications:

• videophones will continue to improve and fall in cost.
• home PCs are now able to handle telephone calls. This provides:
• individual voice and fax mail-boxes for each family member with a visual log of all calls.
• automatic voice/fax/data/e-mail/video recognition and routing to the appropriate application.
• automated handling with options to take the call, route to a voice mail-box, forward, or ignore (telesales watch out!).
• multi-media within the same call (e.g. speak to the customer, send a document and then discuss it - even annotate it to highlight specific areas).

Home PCs will become message centres.

• Smartphones will provide some of the above functions. They will have touchscreens and menu systems like ATMs.

Companies can now serve global markets, as well as serving local markets using global resources.

Voice activated services are now viable and in use by UK financial services.

5.6.4 The liberalisation of telephone markets is fuelling an explosion in global operations, at least within the English speaking world:

• global 0800 numbers smooth out capacity and bring economies of scale. They particularly suit transnational media adverting on satellite TV.
• Internet telephones bring international calls at local call prices.
• personal telephones numbers which are available for life and allow contact anywhere in the world.

5.6.5 New telecoms operators are installing the latest digital systems based on high bandwidth cable and radio technology. When linked to computer systems it greatly enhances the simple telephone system. Many of the following services are already in existence:

• voice recognition is currently used for home banking but using natural language processing will extend to switchboard operators ("I have an enquiry concerning my PEP product" will route the caller to the appropriate clerk),
• fax-back information requests
• automated voice messages activated by some event (e.g. a stock market price change; a house break-in; an appliance failure).
• the forwarding of voice messages by e-mail.

Consumers will erect electronic barriers to block unwanted communications. Strong relationships will be required to get through.

Telecentres are serving customers 24 hours per day, 7 days a week.

- Customer Manage Own Communications -

5.6.6 The business implications of these developments will be profound:

• customers will have significant control over how and from whom they'll accept external communications. True Relationship Marketing will be necessary to penetrate these electronic barriers.
• customers will expect to conduct their communications on the telephone at any time of the day or week and from any place. Internal processes will need to handle a diversity of calls and information systems will need to be continuously available to respond. Speed and transparency of internal organisational processes will be expected.
• First Direct and Halifax Direct are two examples of 24 hour / 7 days a week telephone banking.
• Safeway's customers can order by 'phone or fax using a personalised shopping list based on previous purchases.

Global operators are in an ideal position to handle demand peaks and troughs.

- Calls Handled on World-Wide Basis -

• it is already possible to distribute call handling and work processes to anywhere in the world where there is a suitable supply of skilled workers:
• Ireland now handles help desks and admin. for many European and multi-national companies.
• Matrixx uses a pan USA-UK network of 1,600 work stations able to respond to sudden surges of calls following a TV ad with an 0800 number response. They now also handle e-mail inquiries.
• eFusion allows customers to speak via an Internet phone to its call centre staff at the same time as discussing a World Wide Web screen. Soon, they will route these calls from customers direct to their client's offices.

Telesales can be handled by world-wide resources

Interviewees are very positive about telephone based selling and services.

Many consumers had embraced this medium. Some interviewees thought the whole of society would soon be using the telephone for commerce.

For some products or services the telephone will play an important but not exclusive role.

A move to telephone based processes is making significant demands on internal capabilities.

5.6.7 Interviewees are very positive about consumers expanding their use of the telephone. Whilst many remarked that it was the de-facto communications method of the young and middle-classes and above, others also said that they felt its use was permeating all segments of society. No doubt the success of the friendly-looking red phone has influenced both consumers and providers.

5.6.8 One interviewee foresaw 50% of GI products being sold direct by the year 2000 but for the more complex products such as L&P, interviewees are more sceptical. Whilst initial enquiries could well come via the telephone they believed that conversion to a sale required the presence of a FA.

5.6.9 Many companies use the telephone for a post-sales customer feedback. One bancassurer said that they had zero complaints after recently making 2,000 follow-up calls. These calls often identified further unmet needs.

5.6.10 Interviewees recognise that there needs to be a balance between quality of service and throughput, and that this relies significantly on the quality and personality of the people handling the call. Compliance was important, with some interviewees expressing concern about the possibly unfair competition and potential for poor sales from the execution only services.

5.6.11 Long term, some felt that unsolicited out-bound telesales will become unproductive as consumers became increasingly annoyed with the volume and intrusive nature of such calls.