Medibank CEO: We're getting better at customer experience

Health insurer reports half-year results and highlights reduction in customer complaints, new processes for non-customer facing staff and digitisation as helping to lift customer satisfaction and arrest member attribution

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.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

Does your brand need a personality review?

There are five tell-tale signs your brand needs to take a long hard look at itself.

Charlie Rose

Senior Strategy Consultant, Principals

How to create profitable pricing

How do we price goods and services? As business leaders, we have asked ourselves this question since the history of trading.

Lee Naylor

Managing partner, The Leading Edge

Sport and sponsorship: The value of event sponsorship

Australia’s cricketers captured the nation’s attention during their recent run to the semi-final of the ICC Men’s World Cup. While the tournament ultimately ended in defeat, for over a month it provoked a sense of belonging, hope and empowerment for millions of people across Australia. Cricket, and sport in general, has a near-unique ability to empower individuals, irrelevant of their background, demographic or nationality.

Nikhil Arora

Vice-president and managing director, GoDaddy India

Thank you, so do I.

David Freeman

Sustainability of message: H2coco founder's commitment to consumers

Read more

Hi Harry, thank you for pointing this out I can confidently say both these bottles are in transition away from PET as we continue to impr...

David Freeman

Sustainability of message: H2coco founder's commitment to consumers

Read more

I’m confused. He has a giant 2l hard plastic bottle in Coles and his pink bottle is also in plastic??

Harry

Sustainability of message: H2coco founder's commitment to consumers

Read more

Great message from an Aussie company about sustainable business practices, particularly packaging. Wish more businesses would think more ...

Krisy

Sustainability of message: H2coco founder's commitment to consumers

Read more

Well, I wish we could change the situation. But I am not sure it's possible.

Patricia Miller

Does social media make astroturfing acceptable?

Read more

Latest Podcast

More podcasts

Sign in