Unstructure

Jeff Carlson, Executive Vice President, Chief Service & Information Officer, American General Life Companies

Thank you. I apologize; I’m going to use the podium. I just stepped out to the men’s room and I’m afraid I’ll break out in spontaneous dance. So, I need to stay behind the podium here. Let me start with the business problem we were attempting to solve. Our company is a life insurance company and our products are sold primarily through third parties —intermediaries and brokers. Much of our energy as a company has historically been focused on understanding and meeting the needs and expectations of those third-party distribution partners. So much focus on them, that we have largely ignored the end customer or the consumer or, in our case, the policy owner, the individual or the organization that ultimately writes the check for our person.

We’ve learned– sometimes painfully so, that the wants and needs and priorities of our distribution partners aren’t necessarily aligned with those of our end consumers. We’ve also learned that from the perspective of our end customers, the policy owners — that we are oftentimes not very easy to do business with.

When we started this journey, I think one of the pieces of feedback we actually received that described our service process was something to the nature of, “It was like having to crawl through glass to get a transaction process,” not, obviously, something that you want to hear from your customer. So, to ensure that we retained this very significant over $3 million customer policy base, which for us is probably our most significant financial asset, we realized that we needed to get their direct feedback on how we were doing, and then use that feedback to re-prioritize what our development agenda is.

What are the things that we’re working on that we thought were being done to improve the customer experience? We needed them to give us that direct, unfiltered feedback. Again, historically, we received most of that feedback through these third-party intermediaries who may have different agendas and priorities.

We needed ways to measure how we were doing against the feedback they gave us. And finally, we needed to ensure that we had a closed-loop process that we referred to as action alerts, to make sure that we acted upon the feedback both positive and negative, but particularly the negative. Since we admittedly didn’t have a lot of experience in this space, we sought out a business partner.

We actually chose a firm by the name of Customer SAT. They are now a market-tools company. And what Customer SAT brought to us was basically an ASP, a hosted model for implementing real-time customer surveys for developing a net-promoter score. Some of you may be familiar with net-promoter score.

It’s really a measure or indicator of customer loyalty. And they provided access to very rich data that we previously did not have along with very solid analytics and metrics. Their tools and data allowed us to develop processes for capturing feedback at the key touch-points, or moments of truth, where we interact with our customer, all the way from the very front end where they’re applying for a new policy with us, to when we’re dealing with a beneficiary on a death claim. We developed action alerts around each of those touch-points or transactions.

Whenever we receive feedback that gives us a less than sterling response, which is less than a five on a five-point or on a ten-point scale, we actually have the ability to capture that and take action on it. In many cases, it’s physically reaching out, calling that customer and trying to understand why they weren’t satisfied with that transaction.

And then ultimately, we’d been able to use this information to really translate it into our development agenda. Are we spending our precious resources on improving our operations, improving our systems so that it’s getting the biggest bang for the buck with our customer? This slide shows a very high level of the flow of our voice of the customer, Customer SAT process. It really starts with that interaction that we have with the customer.

When that transaction’s closed, generally by a CSR– customer service rep, that actually triggers an automated delivery of an e-mail survey to that customer. And each of these surveys is tailored to that touch-point. There are a standard set of questions that we ask at every touch-point. And then the remaining questions are tailored to the particular type of transaction or service that they were requesting from us.

Once we get that response, and our responses have been, frankly, better than we thought, people are very willing to give us their opinion range around the five-percent range, some transactions like the new business where they’re developing a new relationship with this, their responses tend to be a little higher than if they’re just requesting a service form. We’re able to then, through our relationship with Customer SAT, immediately access that data, understand how we’re doing, and then develop, again, this action alert process.

And we have a very small team of internal employees who we refer to as customer advocates, who actually work within the functional areas, and then have the responsibility for doing the reach-out to our customers. This may not be very easily read. But these are just some examples of what we believe the Customer SAT tool has enabled us to do.

While I think everyone would agree that getting the voice of the customer and baking that into your process is a good business practice, we also believe that it’s very important to be able to measure the benefits associated with that, particularly as we look to fund growing the program. This slide highlights just a handful of examples where we’ve either improved the customer-facing business process– the example there is first-call resolution.

We’ve very quickly learned that people’s satisfaction with our service is almost in direct correlation to the ability on our customer-service-rep’s parts to resolve that request at the point of contact. With a life insurance company, a lot of our systems environment continues to be more of a batch mode.

So, historically, we would’ve taken a call and then delayed the processing of that request by a day or even two days. What this has shown us is that we needed to improve that capability and enable our customer-service rep to actually execute the transaction when the request was made. The other key thing that it’s allowed us to do, and the e-payment example at the top there is a good one, is it has identified development opportunities that we frankly would not have realized were as important to our customers, and may have ultimately developed those capabilities.

But they’ve helped us understand that this is really important to meeting their needs so that we can now enable the ability for our customers to actually make their payments electronically, which for our industry, is not a norm versus, say, a BT where a majority of their customers do so.

So, these are just some specific examples of where we believe this program has translated not only to improving the satisfaction of our customers and their loyalty to us, but also translated into actual cost savings for the organization. In terms of where we hope to take this next– I started by talking about the relationship we have with our distribution partners. In spite of the fact that this has been so far oriented to our policy-owner customers, that relationship we have with the broker intermediary is still very important.

We think we can use the same concept, the same process, for engaging our distribution partners and making our relationship with them more sticky because they clearly sell not only our products but our competitors. And then we also intend to use the surveys to get feedback from our customers on how that producer or broker is meeting their needs on our behalf.

So, we see some real opportunities there to extend this capability and ultimately to continue to improve the experience and shape our agenda more closely aligned with our policy-owner customers. With that, I will happily take questions. Think there’s one over here, as well.

Male Voice: Hi, thank you. How did your intermediary community react to you getting involved in anything that they might have found which worked against them? You know, you’re going back to the customer for feedback; some of it may be about them. How did they react to that?

Jeff Carlson: Good question. Any of you who are familiar with the insurance business, in many ways, those intermediaries or brokers believe the policy owner is their customer, not ours. Even though the contractual relationship is between us and the end consumer, they are very wary of us doing anything that does not involve them.

So, we actually very proactively reached out to the broker community. We identified any of those brokers who didn’t want us to have an exchange with their customers. What we’ve learned very quickly is that they get something out of that as well, and that when there’s a problem, it’s in their best interest to know about it just as it is in ours. So, we’ve actually had less resistance from those intermediaries than what we thought.

We actually believe when we reach out to them to do surveys of them that that will just reinforce the value they can get. Because one of the things that it really highlighted was how important they were to the satisfaction of a policy owner about the company. So that’s where we have a mutual vested interest in understanding more quickly, before the customer actually leaves us.

And I think they’re going to see value in it, as well. That’s another area that we’re actually looking at opportunities for not only polling or surveying our existing customer base, but those who may have defected during the sales process. Were there things that we should’ve or could’ve done differently? And then those who have left us that were customers that subsequently left the organization, are there things that we could’ve done to mitigate their sense of need for going elsewhere?

Audience Member: The question I have is– in any kind of transformation program, there’s always a challenge you’ll probably hear from your partners, “We need the best people from your business.” And of course, a lot of the best people from your business are the best people ’cause they’re actually running the business in that.

In such a sea change of a program where you’re fundamentally changing not only your go-to-market strategy but the ongoing customer engagement, how do you actually get the right resources involved, and how do you then allocate the right number of resources that’ll be required to carry the program forward?

Jeff Carlson: That’s been a very interesting assessment that we’ve made. When we launched this program I think in late 2007 we kind of had it in place when the August-September of 2008 meltdown occurred. My company is actually an AIG company. So, the impact of the events of September, 2008 was exponentially impactful on us.

It created a storm in our customer base. Every time AIG was in the news, our call volumes would spike. So, we really have had to calibrate the resources that we’ve allocated to this. Initially, we had talked about developing a team of 40 people to deal with this notion of customer advocacy dealing with the backlash and negative response.

What we’ve seen over time is that we’ve been able to reduce that to a core. I would say we probably have only five to eight FTEs who work on this process full time. What we’ve been focused on is trying to make it more into our existing, functional process. So, the people on the front line feel more of a sense of, “I can take action; I need to deal with the satisfaction of the customer experience.” So, we’ve kind of transitioned from a dedicated team to more functionalizing it, which, again, helps us from a resource standpoint. Thank you.