How Suncorp plans to reduce churn with its connected customer strategy

Insurance and banking group's chief customer officer, Mark Reinke, and CEO, Michael Cameron, set out the new business model and ambitious platform play that'll enable it to better engage customers on their terms

Suncorp’s new operating model and platform approach is about elevating customer needs and will help the banking and insurance group keep hold of some of the 125,000 members who churn each month, its CEO claims.

Suncorp CEO, Michael Cameron, told attendees at the group’s Investor Day that its ‘One Suncorp’ strategy is vital to creating “non-price value” with customers in a digitally driven marketplace.

In February, Suncorp announced its five previously separate businesses, including banking and insurance, were being united under a ‘One Suncorp’ business model. This new approach is aimed at helping the group better focus on its 9 million customers and their outcomes regardless of brand, and saw executive marketing and data leader, Mark Reinke, promoted to chief customer experience officer.

Cameron told investors Suncorp loses 125,000 customers each month, or up to 1.5 million each year. He suggested this was because the business was still competing on cost, rather than value.

According to Cameron, the solution isn’t selling cross-selling products, it’s about developing a marketplace. He said the emphasis is on increasing the number of ‘connected customers’ by meeting more of their needs, interacting with them digitally as well as physically, and by integrating third-party components.

“We are going to fill in the gaps of the customer journey and provide choice,” Cameron said. “We have moved from focusing on products to focusing on customer outcomes and getting more connected customers. This is where the basis of the marketplace we’ve been working on is so critical – to make it easier to navigate and access around Suncorp’s products and services and other value tools is critical.”

Cameron set a target of increasing the number of “connected customers” by 50,000, delivering an additional $10m in net profit each year.

How Suncorp will meet unmet customer needs

To do this, Suncorp is building a marketplace approach and developing a platforms pipeline that better connects its brands and capabilities, as well as those of third parties, from a customer perspective. This will see the group leverage real-time customer data and technology in order to meet unmet customer needs and in a way that encourages them to interact more frequently.

During investor day, Reinke presented details of this emerging customer strategy and efforts, saying two key drivers were guiding program of work. The first is that customers are no longer just in banking or insurance silos.

“The second thing that’s different is we’re creating the means with which to create scale in the way we meet customer needs,” he said. “In the past, what we’ve found is we’ve had constrained demand and in effect, had constrained supply. While we’ve had 9 million customers with an enormous range of needs, we’ve only been able to meet a subset of those needs because our brands only had the capability to meet a piece of those needs. From a supply perspective, while we had a whole range of services we could provide to our customers, in reality, we were providing only a subset of those products and services through one channel versus another channel, or one partner versus another.

“What we’re doing with our marketplace and platform approach is creating scale on the demand side, by linking our customers different to our brands, and on the supply side, by linking services and solutions we manufacturer with third-party solutions and making those available through all partners and channels.”

Underpinning Suncorp’s efforts is a repositioning around customer journeys across four categories: Home and property; mobility; self; and money, Reinke said. He cited significant investment in technology and data insight to support each of these areas.

“Take home for example – we are a credible player in this space… but we see a range of other services there including buying a home, helping people move, and as the population ages, helping people stay in their homes so they don’t have to move to aged care,” Reinke said.

For businesses, Suncorp is looking to bring together existing capabilities such as workers’compensation with health, accident and wellness programs. While in self and people, there’s a great near-term opportunity to bring together life, health and trauma into a single package, Reinke said.

“We’re going to turbocharge this with a raft of solutions, tools and apps that increase the interaction model,” he explained. “A once-a-year approach is not enough for this business. We’re developing ways to engage people with everyday services, some of which are free.”

Reinke highlighted Suncorp’s new partnership with mobile app, Trov, which launches its on-demand insurance app into the Australia market this week, as one of these ‘freemium’ examples.

An example of Suncorp’s growing platform approach, meanwhile, is Shannons’ Club concept, which has been running for the past two years. The online hub for motoring enthusiasts is driven by content and a blend of services, and sees high interactions daily from its 63,000 members, Reinke said.

“This is changing the economics of how we see that business,” he said. “Churn is significantly lower – the number of solutions those customers have is significantly higher.”

By providing more connected customer services, Suncorp becomes more relevant, customers are happier, and significant value is created for shareholders, Reinke continued. He noted a customer engaged in two of its four category buckets is four times more valuable than someone in just one.

Today, 60 per cent of Suncorp customers are sitting in just one of those four need areas.

Suncorp is pulling four big levers to achieve this. The first is real-time customer insight, and the group has been investing heavily in its business analytics and data capabilities. These are being combined with bets in priority segments such as mature lifestyle, small business and young lifestyle.

The second focus is marketplace, and the group is working to curate solutions and provide omni-channel experiences, Reinke said. Thirdly, it’s about seamless experience and simplified journeys. The fourth piece is repositioning and strengthening the masterbrand and better connecting it across Suncorp’s collection of brands.

He also flagged plans to simplify the brand portfolio.

“All of our research and feedback from customers tells us they’re excited by the future but completely underwhelmed – with change, complexity and choice. They want to make good decisions and informed ones, but the reality is there is a lack of tools to help them navigate the myriad choices out there,” Reinke said. “This has set up a transactional model and it’s very shallow and frustrating for customers. There are real, unmet needs.”

Suncorp needs to leverage all of its brands and provide simplified platforms in order to provide a more comprehensive approach for customers, Reinke said.

“Yes we have a lot of customers and great brands, but we’re now putting that together in a way that’s directly specifically to this problem,” he added. “We reduce the 125,000 customers we lose every month and quickly that adds value.”

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