Insurance company expects increased sales and more cross-selling opportunities

InformationWeek Staff, Contributor

September 28, 2001

4 Min Read

Customer-relationship management has lost a bit of its luster in recent months. Analyst reports and user surveys have raised questions about whether CRM systems can deliver the business value that vendors promise. Some companies are putting big-budget CRM projects on hold or scaling back on broad implementations as the economy teeters on the brink of recession.

None of that has deterred Allstate Insurance Co. from proceeding with an extensive CRM project that integrates its marketing-campaign management, sales-lead management, and call-center applications. Once the system is fully operational next year, Allstate will be able to share customer data among its various sales channels. The Northbrook, Ill., insurer is counting on the integrated CRM system to increase sales and cross-selling opportunities and improve customer satisfaction, loyalty, and retention rates.

"We want to make the right offer to the right customer through the right channel at the right time," says Allstate VP Dennison DeGregor. "That's really the Holy Grail of CRM. Like most financial-services companies, we have a wealth of customer information in our back-office systems."

Allstate's integrated CRM system, known as the E-CRM Center of Excellence, has been in the works since last September. Following months of planning, the insurance company installed Xchange Inc.'s marketing campaign management software earlier this year and more recently implemented MarketSoft Corp.'s E-Leads sales-lead management application. Allstate previously had installed and customized call-center and desktop-sales software for the insurance industry from Janna Systems Inc., which Siebel Systems Inc. acquired in September 2000. A customer database stored in IBM's DB2 database software underlies the applications.

Although those applications are all up and running, DeGregor's goal is to integrate them, making it possible for leads generated by one channel, such as Allstate's Web site or its call center, to be swiftly routed to the marketing system or a sales representative for action.

If a potential customer using Allstate's Web site inquires about life-insurance policies, for example, the request would go to the campaign-management system, which would immediately deliver the requested information via

E-mail or postal mail, boosting customer satisfaction by quickly responding. Currently, a fulfillment operation handles such requests on a batch basis--a slow process that can result in lost sales opportunities.

"The key is integrating this stuff. With the new system, it will all be automated," DeGregor says. There was much debate during the planning stages about whether to purchase an integrated CRM system from a vendor such as Siebel. But DeGregor says the best-of-breed approach won out because applications from Xchange, MarketSoft, and other independent vendors were judged to have more depth of functionality, which Allstate would have had to program into the Siebel system.

Allstate is installing SeeBeyond Technology Corp.'s enterprise application integration software to provide the links between the CRM applications. Allstate also is developing the business rules and a customer scoring system on which the entire system will operate. Such rules will automatically determine whether a sales lead generated from Allstate's call center should be routed to the campaign-management system, to an Allstate sales rep, or to an independent agent. Allstate is shopping for a business rules engine, possibly from Chordiant Software Inc. or Black Pearl Inc.

DeGregor has declined to reveal the cost of the project but says the rule of thumb for implementing such an extensive system is $100 million over three years. Making the business case for the project was relatively easy, given the potential savings and incremental revenue gains it is expected to generate and potential savings realized through operational efficiencies and productivity gains.

To help win approval from top executives, DeGregor and his staff broke the project into three phases, with each expected to produce value before the company moves on to the next phase.

However, the project's biggest challenges are cultural. Employees are going to have to change the way they work, DeGregor says. Call-center staffers, for example, are traditionally focused on efficiency and judged according to how many calls they handle. But with the integrated CRM system, call-center workers also will become revenue generators by turning calls into sales leads and cross-selling opportunities.

But the shift takes time, so Allstate is devising new metrics that combine efficiency and revenue generation for judging the performance of call-center employees, who are expected to field as many as 13 million calls next year. Individual business units will also have to more closely align their objectives with companywide performance metrics, DeGregor says.

The integrated CRM system is slated to be up and running by mid-2002. But, DeGregor says, it will take several years before it's fully deployed to tens of thousands of Allstate sales representatives, call-center workers, and other employees.

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