Application of CRM in the life insurance Company in China and in a company of Ping An Life Insurance of China - Dissertation Example

?Application of CRM in the life insurance Company in China and in a company of Ping An Life Insurance of China The essence of information technology revolution is providing a great opportunity for marketers to build better relationships with their customers due to quick response they can make. This strategy provides an opportunity to combine the abilities to respond directly to their customer requests hence providing the customer with a highly interactive customer experience, which is beneficial for the business (Messner, 2005). The interactive experience provided by the company has a great ability to establish, nurture and sustain long-term customer relations, enabling them to come back for more services. The goal of the company in applying CRM is to enhance the customer relationship into greater profitability by increasing repeat purchases rates and reducing customer acquisition costs that may lead to losses for the company (Vogt, 2011). CRM ensures that honesty, fairness and responsibility are enhanced in the business in order to reduce the chances of conflicts between the customer and the business. The fig. below represents the key pillars of CRM as used in Ping An Life Company. (Source: Own creation) Ping An Life Company understands customer behaviour, focus, and focus on the customers who can deliver long terms profits since they are of great benefit to the company. This company stresses much on customer retention as opposed new customer acquisition since the latter is very expensive. Studies show that retained customers generate over twice as much gross income than new customers in any business hence businesses should focus more on customer retention (Gouthier and Stefan, 2003). The considerable improvement in technology and innovation is making it possible to improve on the customer retention methods through improved customer relationship management. The first step in customer relationship management is to construct a customer database where transaction and customer contact information is accumulated to enable easier follow up on the customer behaviour with time. This task involves seeking historical customer data from operative internal sources such as accounting and customer relations, which since they already have the customer information (Ramashesham, Bejou, Subhash, Mason and Pancras, 2006). Since this company uses a web-based business, this transaction is relatively cheap when compared to other methods, which do not use web-based operations. The database collected from the customer includes the transactions, descriptive information among others. Winer (2001) argues that every satisfied customer brings at least three more while dissatisfied customers discourage at least ten more potential customers. They also assert that regular customers exhibit less price sensitivity than new customers thus customer orient companies can charge higher prices than their competitors without negatively feeling the heat of the competition. Customers expect the sales people to be accountable and continuously solve their problems. They also expect them to be accessible at all times and be creative in responding to their needs. The provision of customer relationship management offers a number of advantages and disadvantages to both the company, which carries the initiative, and the customers who enjoy the benefits, which come with the initiatives. CRM provides the company with the advantage of internal and external information flow thus enhancing the customer satisfaction with the company. Strategies of CRM used in Life Insurance Company This company is applying the new customer relationship approach, which combines advanced technology and sophisticated billing analytical identities, which secures payment before the customer reaches the collection gate. The first strategy used by this insurance company is to choose the right people for the job of customer relationship management. The people chosen for the task should be well trained so that they possess the individuals skills needed in handling the customers satisfactorily. The people chosen for the job then act as the universal agents capable of handling virtually every issue regarding customer relations. This sector requires top performers since handling customer issues are complicated. Their customer handling skills identifies the right people and they are further taught on the right methods of handing customers. The company also provides up-front and on-going training, which is tailor-made to enable the agents upgrade on their skills from time to time. They are trained to have the empathy, bridging and negotiation skills needed for close customer relation so that they can successfully negotiate and resolve all the issues affecting their customers. The on-going training enables the agents to keep abreast of the latest client offers so that they are fully aware on the best means to handle the customers (Messner, 2005). This also enables the CMR agents to know how to handle the customer payments and offer credits or offer waiver fee accordingly, depending on which type of customers they are dealing with. If the customer lost a job, the CMR agents must be able to show empathy and offer payment alternatives where necessary in accordance to the loyalty of the customer. Another strategy of the CMR used by this insurance company is to control customer service quality and performance. The CMR agents are able to offer empathy and sympathy for their customer very easily since they poses the customer data and payment habits in their screens, which enables timely and quality services. The main reason for doing this is that empathy enhances customer satisfaction and increases the likelihood of receiving payment and increasing his loyalty in the business. The insurance company also offers advantage customer data to build prevention strategies, which are beneficial for the company. The individual payment history on screen, the CMR agent is better placed to negotiate with the customer while offering suggestions on changes where necessary (Marfleet, 2004). The CMR agents also offers access to all customers contacts in offering a modern means of communication in the medium of the customer’s choice and convenience. Another strategy for this insurance company involves the delivering global consistency by implementing and enforcing a set of operating standards for all customers throughout their systems. This ensures equally trained agents with reliable service to all clients around the world with the view of offering global consistency on their customer satisfaction. This is done from a program developed from highly qualified standards developed from the global call centres, which delivers universal agents with consistent skill levels irrespective of where they come from. Currently, the company has over half million sales agents working directly for the company. The company also promotes motivational incentives as part of their CMR strategies in improving the customer loyalty. The motivational strategies are provided depending on the different needs of the customers. The CMR agents are also awarded incentives depending on the variety of client-specific compensation models to boost their morale and to encourage their quality services. Comparing the performances of applying CRM in Ping An Life Insurance Company in China The performance of the systems of operations has increased in Ping An life insurance since the initiation of CRM strategies. It has enabled the company to have various customers from various sectors within China and other foreign countries. The profit realized from wide variety of insurance services amount to millions of Yuan. The fig. below represents the customer structure of Ping An Life Insurance Company Adopted from https://publications.theseus.fi/bitstream/handle/10024/22467/Qun_Deng.pdf?sequence=1 Item Government Organizations Enterprise and Public Institutions Foreign Funded Enterprises Others Classification by character on which the company work for 12% 64% 8% 16% Item Below 10,000 Yuan 10,000 to 100, 000 Yuan 100,000 to one million Yuan Above one million Yuan Classification by annual premium 85% 11% 3% 1% Item No insurance renewing Renewing insurance for one year Renewing the insurance for two years Renewing the insurance for more than three years Classification by situation of insurance renewing 47% 36% 14% 3% Benefits of CRM be as applied in Ping an Life insurance of china The application of CRM has enabled Ping An Life Insurance to enjoy a lot of benefits in their company. The application of CRM strategy has allowed Ping An Life to Insurance to get an insight into their sales and marketing activities with close customer support in their daily transactions. This is helpful in achieving high purchase frequency for their products, which leads to increased profitability for their business. Using CRM, The Ping An Life Insurance is able to outsource certain support activities to the customers through their systems to benefit both the vendor and the customer. The application of CMR systems enables Ping An Life Insurance Company to identify both the profitable and the non-profitable customers so that the company spends more time and resources on the resourceful customers. Through this systems, they can also identify frequent and one time customers so that they balance how they relate to both of them during the customer management activities (Messner, 2005). The use of CRM has made it possible for Ping An Life insurance to integrate this system with other applications in their organizations like the accounting and logistics systems in order to simplify their processes. This technology has also enabled the Ping An Life company to integrate the CRM systems with many third party applications like Google maps to automate their processes. The company has also integrated their CRM systems with IP Telephony systems, which enables the CRM to fetch the most recent support requests transaction status when a customer is calling their business line. The CRM system offers Ping An life the greatest advantage of gaining the customer loyalty, which is less costly than acquiring a new customer for the business. It therefore helps the company to cut a lot of cost, which would otherwise be used in marketing activities like advertising. This also increases productivity of the firms since fostering the customer loyalty enables the company to save time on other projects. This use of CRM strategy enables Ping An Life Insurance Company to have a good view of the list of their company’s prospects in terms of the relationship between management and customers so that they can adjust their services when necessary. Limitations in the use of CRM as applied in Pang An Life Insurance of China The use of CRM sometimes leads to duplication of tasks, which are performed by other departments leading to wastage of time and resources in the company (Gouthier and Stefan, 2003). The software is complex and difficult to understand; hence, it requires skilled and trained personnel to handle the system so that it works successfully. This makes the Ping An Life company to undergo additional costs in continuous education of the people entrusted in managing the CRM systems. The Return on Investment is difficult to establish in the short run, hence it only profitable when used for a long period of time (Vogt, 2011). The cost of purchasing and maintaining the software is high making the company to use many funds in acquiring the systems. The evaluation process is usually difficult since there is no one factor which determines the success or the failure of the program. There are subsidizing factors that cannot be statistically measured and thus firms may find it hard in determining the true rate of its CRM programs. According to Winner (2001), CRM process attempts to target the gainful clients in order to uphold a strong relationship with them than others. This often leads to discrimination against other current and potential customers and this may be seen as unfair and can ultimately be counterproductive in building strong customer relations. Bibliography Deng, Q. 2010. Customer Relationship Management In Ping An Life Insurance Company Of China, Ltd. Savonia: University of applied Sciences. Gouthier, M and Schmid, S. 2003. Customers and Customer Relationships in Service Firms: The Perspective of the Resource-Based View. Marketing Theory; vol. 3, 1: pp. 119-143. Marfleet, J. 2004. Implementing Customer Relationship Management in JPMorgan: New Roles for Information Professionals. Business Information Review;vol. 21, 2: pp. 111-116. Messner, W. 2005. Customer relationship management technology: A commodity or distinguishing factor? Business Information Review; vol. 22, 4: pp. 253-262 Ping An. 2013. Ping An Insurance Group. [Online]. Available at Read More