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CRM for MCOs: the full potential.

Article Excerpt
Customer relationship management (CRM) is widely employed in virtually all industries where having a "relationship" with customers can improve the performance of firms. It has three main meanings and applications:

1. Customer interaction management (CIM). Employing CRM software, systems and services to improve the marketing, sales, and customer service/support functions, mainly through learning more about individual customers and enabling contact staff to access customer data during interactions with them.

2. Customer experience management (CEM). Developing individual customer databases on each customer's preferences, likes and dislikes, to enable "customization" of each customer's experience with the firm, usually including the identification and focusing of more attention on most valuable customers (MVCs), and tiered attention to profitables, and marginals, as well as little or no focus on "losers," as well as targeting acquisition efforts to attract more new customers who are similar to more valuable customers, and avoiding those described as losers. In some cases, customer interaction and transaction experiences are managed so as to "fire" losers.

3. Customer development (CD). "Developing" or "managing" individual customers and segments in order to improve their profitability, through any combination of increasing their purchases (up- and cross-selling or frequency marketing) and decreasing the costs of serving them in order too increase their customer lifetime value (CLV) to the firm.

CIM for MCOs

There is great potential for health insurance firms and managed care organizations (MCOs) to...

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