HMS NATIONAL, INC.
REDEFINING THE CUSTOMER EXPERIENCE ACROSS MULTIPLE CHANNELS PER THE VOICE OF THE CUSTOMER
Company Background
- 31 year old privately held company.
- Market and sell home warranties through real estate agents.
- Use direct marketing to renew home warranties when the one year contract, initiated during purchase of the home, is approaching expiration.
Industry Background
- A home warranty helps homeowners avoid unexpected home repairs which are often expensive.
- The warranty provides coverage against mechanical failures for many major systems and appliances, coverage that is not provided by most homeowners' insurance policies.
- The term of the warranty is typically one year.
- Traditionally, Home Warranties cover many systems and appliances, including:
- Air Conditioning and Heating Systems.
- Refrigerators.
- Water Heaters.
- Washers / Dryers.
- Ovens / Ranges.
- Electrical Systems.
- Etc.
Goals of the VoC
- Significantly improve renewal rates.
- Improve the customer experience across channels.
3-Step Marketing Process
- Know Much More About Our Customer’s Needs. . . And Use This to Drive Our Marketing.
- Establish Meaningful Opt-In Preference-Based Relationships.
- Deploy Our Multichannel Mix Per Opt-In Preferences.
Know Much More About Our
Customer’s Needs … and Use This to Drive Our Marketing
VoC Research
- Research Objectives
- Stimulate greater renewal rates.
- Identify what home warranty means to customers.
- Determine how customers define the value of HMS.
- Evaluate claim experiences: strengths and weaknesses.
- Measure level of satisfaction with HMS.
- Analyze perception of marketing communications.
- Gain insights into product enhancements.
- Determine willingness to Opt-In and self-profile preferences to drive targeted communications.
- Research Sample:
- Customers Who Renewed.
- Customers Who Did Not Renew.
- Segments:
- Home Buyers Who Purchased Home Warranty.
- Home Sellers Who Purchased Home Warranty.
- Filed Claim / Did Not File Claim.
- VoC Learnings:
- Regardless of who purchased the warranty, i.e., Home Seller or Home Buyer, engagement is low.
- The customer experience, not just the amount of claims paid, significantly impacts renewal behavior.
- Real estate agents often drive the customer’s perception of the value of renewing.
- Customers often calculate the value of the warranty if they consider renewing.
- Service enhancement opportunities identified: focus on the end-to-end customer experience.
- Customers expect HMS to be proactive throughout the claims handling process.
- Customers are receptive to self-profiling their interests and preferences.
Establish Meaningful Opt-In Preference-Based Relationships
Opting-In
- Customers are willing to share information regarding their homes, interests and preferences if this is used in a valuable and respectful manner.
- Customers can understand the value they will receive from populating the Opt-In database with their preference information.
- Customers expect that this information will be used to drive relevant and personally useful information.
- Preferred communications include:
- Maintenance Tips.
- Newsletters.
Deploy Our Multichannel
Mix Per Opt-In Preferences
VoC Driven Strategies
- VoC learnings helped develop more effective
strategies for:
- How to engage customers throughout the customer lifecycle including during the renewal process e.g. telemarketing, direct marketing, auto renewal.
- Which products to offer e.g. cross-sell or up-sell.
- What additional information to offer regarding home repair and maintenance.
- Phased implementation began in 2009.
Implementation Per VoC Research
Pre-VoC, our initial touch point with our customers was informational without being engaging.
Post-VoC we are leveraging this early touch point to immediately engage each customer. (Launched Oct 2009)
Implementation Per VoC Research
To successfully engage customers, several elements are incorporated from VoC learnings.
- Customer engagement through a relationship oriented call.
- Pre-VoC, multi-touch renewal process was direct mail driven.
- In the VoC, customers shared their openness to and need for dialogue with us.
- Post-VoC, we have piloted service-oriented TM and the results are as positive as the VoC projected.
- Customer engagement through a relationship oriented call (cont’d)
- The VoC has enabled multi-channel marketing that is driving incremental sales.
- The cost of telemarketing is several times higher than direct mail, but the incremental sales offset the expense and optimize profitability.
Results
- 20% increase in average renewal rates.
- 75% increase in certain segments.
VoC #2 – B2B
In Q4 2008, HMS implemented VoC research for its sales channel: real estate professionals.
This was a logical next step to understanding the entire B2B and B2C process.
- Research Objectives were to Determine:
- Real estate agent’s awareness of home warranty.
- Perception of the value / lack of value of home warranty.
- Level of understanding of home warranty coverage.
- Understanding of the value of home warranty as a renewable product (as identified in VoC #1).
- Strengths and weaknesses of the relationship with HMS.
- Obstacles the Agent has to overcome in offering home warranty to the consumer.
- Strengths / weaknesses of HMS sales efforts and marketing communications.
- Viability of new product offerings.
- Findings, Implementation and Results:
- Findings and recommendations completed in 2008.
- Implementation efforts began in 2009.
- Informed new sales strategy and redefined priorities.
- Specified guidelines for point of sale print material and video presentation.
- A breadth of results have been achieved, these include having a highly motivated sales team in a down-market due to best-in-class sales tools that are driving response, and closing large deals due to the strategic and customer-centric approach that HMS exemplifies.
Post B2C – VoC
The Good.
- Improved the effectiveness of marketing and customer service efforts by providing a roadmap for how to meet customer’s expectations as defined by the customer.
- Re-think product offers and marketing so they provide greater value as defined by the voice of the customer.
- Gained knowledge regarding which improvements will be valued and which will be superfluous.
- In addition to learning ‘what’ to change to improve results, we also gained in-depth guidance regarding ‘how’ to make those improvements.
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Customer engagement messaging in upfront sales collateral.
- Relationship oriented Renewal offerings and touch points.
- Customer service refinements
-
Increased value and effectiveness of communications due to Relationship Engagement focus.
- Customer receptiveness to personalized communications.
- Effectiveness of engaging, rather than transactional mail.
- Increased effectiveness of mail as part of an integrated multi-channel, multi-touch engagement strategy.
Post B2C – VoC
The Challenging
- Need to balance the relationship enhancements that may drive renewals with the offset of potential additional claims losses.
- Regardless of our new knowledge about what and where to make improvements in the upfront sale, our sales channel is independent and therefore changes and enhancements happen slowly.
- Organizational inertia is hard to overcome for all companies, especially those that have been successfully executing a model for many years… so change takes work – hard work.
