Medibank customer service overhaul
In a recent article in CMO the Medibank CEO Craig Drummond has announced a Medibank Customer service overhaul in response to increasing customer frustration and the resultant customer churn.
One particular pain point noted in the article is the poor contact centre experience with wait times “doubling from three minutes to six minutes in the past six months”.
According to some customers, however, even that is a little optimistic – ‘sjc’ commented that “Medibank is still in denial.
Drummond is either lying or being lied to. Telephone waiting times are 30 to 60 minutes, not 3 to 6 minutes”.
In addition to updating some infrastructure in a $150m project, Drummond has also announced plans to introduce Net Promoter Scores (NPS) across the organisation.
Whilst he is to be commended on finally shifting the focus to the customer experience, NPS is hardly the silver bullet that is going to fix all their problems.
Medibank has also had a long association with outsourcing components of their contact centre however there was no mention of any changes to this position.
No doubt an interesting space to watch.
Medibank CEO admits customer experience failings
Medibanks number one priority must be to prioritise customers needs and outcomes if it’s to restore brand trust and halt member attrition, its CEO says.
The private health insurance giant announced its full-year results today, reporting a group net profit of $417.6 million, up 46.4 per cent year-on-year, as well as an increase in operating profit to $510.7m.
Despite these solid results, it was evident throughout the financial report and statements that Medibanks brand is struggling to relate to modern customers, and the group has seen its market share in terms of policyholders decline in recent years.
In particular, challenges include negative perceptions around lack of customer centricity and value for money, the group stated.
While Medibank has paid $5.1 billion in claims this year on behalf of our customers, some challenges remain with the value we offer to our customers, its newly installed CEO, Craig Drummond, said.
What is clear is that we need to put our customers at the centre of everything we do.
Customers needs and outcomes have to be our number one priority. Of most importance is putting customers at the heart of every decision the group makes, Drummond said.
He admitted customer service, experience and value is not where it needs to be for Medibank.
We have to halt customer attrition in the Medibank brand, he said.
To do this, we know we have to get the basics right we have to build trust and simply do a better job for the customer.
Drummond noted several organisational pain points and strategies impinging on the efficient and effective delivery of Medibanks offering.
These must be addressed in order to remove primary customer friction points.
We have identified these primary frustration points and the accountable executives inside the company to fix them, he said.
These will be fixed methodically and with a new sense of urgency.
Technology and digital are seen as key to achieving improved value and experience, and Medibank is hoping its significant investment into a core policy management system overhaul will make it a much easier organisation to deal with.
Codenamed Project DelPhi, the $150 million, core IT systems upgrade will not only see legacy claims processing systems replaced, it also brings in new digital sales and systems capability, improvements to its data warehouse, and business intelligence systems.
The project was initially due for completion in 2016. However, while all customer records have now been migrated across, it will take another 6-12 months to optimise, Drummond said.
In the meantime, there have been plenty of hiccups, and Project DelPhi most recently blamed for a blunder which saw millions of members without a 2015-2016 tax payment statement in time for the tax offices deadline on 15 July.
In his address to investors, Drummond said the final residual tax statements would be sent to those last customers in coming days.
Its now clear the impact of early teething problems have been greater than anticipated and taking our time to address, he said, adding the recent tax statement debacle had a major customer impact.
Im initiating a review to ensure lessons are learned.
Updated Digital Program
Medibank also highlighted strengthening member engagement through digital and Drummond pointed to a reinvigorated digital program.
Initially, this is a catch-up program, but funding is very much focused on customer outcomes, he said.
Big data is a further area of opportunity, and Drummond said theres potential for greater insight and benefit in that area.
A major customer area of frustration also on the top of the priority list is average call waiting times.
Drummond pointed out waiting times had doubled from three minutes to six minutes over the past six months.
This is simply unacceptable, he said.
We also need to make claiming easier and to do this, online tracking and ancillary limit availability is essential.
We have to improve the digital and online offer.
This will take considerable pressure off the call centre while strengthening engagement with our members, and we’re working on the right cover and out-of-pocket calculators now.
On top of this, Medibank is set to formally announce a new customer product investment program next month, again another step in lifting its customer emphasis.
Introduction of Net Promoter Score
Appropriate measurement and incentives are vital to making all of this happen, and Drummond said Medibank will be rolling out Net Promoter Score from 2017 to reinforce its increased focus on customers.
NPS will be used as a key metric for determining short-term incentives for all senior execs to reinforce the focus on customers, he said.
At the same time, Drummond said Medibanks dual-brand strategy in health insurance would continue.
The dual brand strategy does make sense with dual offers and AHM acting as a challenger brand, he commented.
Of course, operational delivery isnt just about front-end dynamics, it involves change management and an organisation structure rethink, something Drummond also put on the table.
We have work to do to deliver execution quality thats clearer on our priorities, outcomes and most importantly, our accountabilities, he said.
Im under no allusions a lot of work to be done to improve and lift performance to levels expected of this company, he concluded.
We must deliver on the promises implicit in our brand.
In November 2016, Medibank’s Chief Customer Officer announced a further $6M investment that includes, amongst other things, a 205 increase in staffing levels for the Melbourne based contact centre.
It would appear that the investment in starting to pay off, in July 2017 Medibank announced that it was ” pleased to see the improvements it has made for its customers reflected in its falling share of Private Health Insurance Ombudsman industry complaints – down by more than a third, from 60.7 per cent in September 2016, to 37.8 per cent in the latest quarter”.
Initiatives specifically related to the call centre included:
- Reducing its average call wait time from 6 minutes to 3 minutes and falling
- Hiring 60 additional contact centre employees
- Launching 24/7 online customer service and opening contact centre on Saturdays
- Launching a new and improved version of its app
There is still some way to go through.
In a 2018 Commonwealth Ombudsman report, Medibank (AHM) received the most complaints for all Health Insurance Providers although the percentage of disputes was significantly better than their main Competitor BUPA (12.5% compared to 30.8%).
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