Computers and artificial intelligence have come along at an exponential rate over the past few decades, from being regarded as oversized adding machines to the point where they have played integral roles in some legitimately creative endeavours.
Reducing customer complaints, digitisation, a change to executive incentives and exposing non-customer facing staff to the end consumer are all helping Medibank start to turn the corner on customer experience, its chief executive claims.
Medibank CEO, Craig Drummond, has been on a mission over the past year to reorient the health insurance business around the customer and arrest significant declines in member retention and acquisition rates by improving brand trust. To do this, Medibank is holding itself to six business-wide milestones centred on improving customer experience and satisfaction through better service, new products, transparency and efficiency.
Speaking to investors to release the health insurer’s half-yearly results today, Drummond said its quest to put customer experience at the heart of its business culture and was starting to bear – albeit small - fruit. For example, Medibank’s share of industry customer complaints reduced from 51 per cent to 48 per cent in the December quarter, while internal complaints data for January was looking “even more promising”.
“This is the result of improvements in our customer service and offering, but also our complaints handling process,” Drummond said, noting the addition of 60 new people in the customer contact centre and extended operations hours. “We’re confident we’ll get these numbers below our marketshare by December this year.”
Medibank has also rolled out Net Promoter Score (NPS) and Drummond said he was encouraged by early signs of improvements, with NPS scores in the second quarter “meaningfully better” than those recorded in the second quarter of 2015. These were also prior to issues with customer communications following the rollout of its DelPHI IT systems upgrade.
Project DelPhi was blamed for a blunder which saw millions of members without a 2015-2016 tax payment statement in time for the tax office’s deadline on 15 July.
“Service NPS, a leading indicator for brand NPS, also improved in last two months,” Drummond claimed. “Nevertheless, we have a long way to go to deliver on commitment to be best-in-class with our major peers in three years.”
Overall, Medibank reported a 2.1 per cent rise in total income to $3.47 billion, with health insurance premium revenue increasing by 1.2 per cent to $3.1bn. Group net profit was $231.9 million, a 1.9 per cent increase. Health insurance operating profits decreased to $249.4m, both as a result of IT systems investment as well as higher health claims (1.5 per cent rise to $2.59m).
While Medibank’s marketshare was down 36 basis points in the first half to 27.2 per cent, this compared with an average 43 basis points and represented an improvement over the past four halves, Drummond said.
“This reflects continuing below-market performance in new customer acquisition as well as lapses. But while early days, we are turning this around,” he said. “We know key to success is delivering for our customers. And our team is focused squarely on this objective.”
In addition to changes made to executive strategy and incentive structures, Drummond said Medibank has introduced customer best processes for non-customer facing groups. This sees teams spending 30 hours per year interacting directly with customers.
“Our intent is to roll this out to all non-customer facing employees as we continue to implement cultural changes in the company,” Drummond continued.
Getting customer experience right starts also requires digital and technological advancement, and Drummond flagged ongoing work to embed the DelPHI platform across the organisation. This had helped significantly reduce customer pain points, he said.
“Eight-five per cent of original top 50 [identified pain points] and the majority of all customer pain points have been resolved since we went into hyper care mode in 2016,” Drummond said. “This is starting to have real impact.”
Other digital innovations in the past half include improving the online Medibank customer portal and mobile app to be more user friendly and functional, as well as new features such as notifications and live limits. Drummond said another redesign of the mobile app, due to go live in March, will incorporate fingerprint login.
Medibank also introduced 24/7 Web chat in January, and reduced contact centre average speed of answer times from 6 minutes to 3 minutes between Q1, 2017 and Q2, 2017. Another customer-led digital investment is Medibank’s new partnership with NAB on the pilot of the Medipass Solutions health platform.
“We’re also accelerating the use of digital in all types of digital interactions, which will allow contact centre and retail teams spend more time servicing our customers,” Drummond said.
Through all of this, transparency is key tenet of the customer reorientation program for Medibank. Drummond revealed a new partnership with digital platform provider, Healthshare, aimed at helping customers find medical specialists supporting Medibank’s gap cover.
“This is in addition to renewed focus over last 12 months to make products simpler and easier to use,” Drummond explained. “For example, we’ve revamped our welcome experience, provide quarterly statements to remind customers of what they’re covered for, and worked to simplify more than 300 product documents.”
Drummond said there was plenty of work to still do if Medibank was to level the playing field with peers such as NIB and Bupa.
“Our near-term strategy, remains unchanged: We’re absolutely focused on strengthening our core of business by reorientation around our customer, putting value back in our products and delivering a superior value proposition,” Drummond concluded. “We’ll do this by exploring new ways to drive better patient outcomes, and pursue an expanded customer health services offer.”