Emerging Insight: Why metrics matter for customer centricity
21 April 2016
MetLife’s management was determined to shift from its traditional product-centric approach to a customer-centric one. Nonetheless, this shift was to prove difficult. MetLife was a large traditional insurer, serving 110 million customers with a complex range of over 1,000 products. Furthermore, many of its processes had barely changed since it was established 147 years ago. Above all, the company culture was far from customer-centric. When staff were asked to identify the customer, they overwhelming spoke either about the sales agents, group clients, or even internal clients within the business. End clients barely featured.
A dramatic shift in culture was clearly needed. To do so, MetLife had to change the way it measured performance and incentivized results. One of the most important metrics it introduced was net promoter score – a customer loyalty metric based on asking consumers a simple question: How likely is it that you would recommend us to a friend or colleague? When MetLife first calculated their net promoter score, they found that they were at the bottom of the league in almost all their markets. This was a powerful wake-up call for anyone in the company who did not see the need for change.
MetLife also developed a more extensive dashboard of metrics, designed collaboratively but owned by country chief financial officers. This ownership was vital to make sure that the metrics were used and valued at the country level. The metrics emphasised four key changes MetLife wanted to bring about, and it has been able to achieve impressive results in all of them:
A dramatic shift in culture was clearly needed. To do so, MetLife had to change the way it measured performance and incentivized results. One of the most important metrics it introduced was net promoter score – a customer loyalty metric based on asking consumers a simple question: How likely is it that you would recommend us to a friend or colleague? When MetLife first calculated their net promoter score, they found that they were at the bottom of the league in almost all their markets. This was a powerful wake-up call for anyone in the company who did not see the need for change.
MetLife also developed a more extensive dashboard of metrics, designed collaboratively but owned by country chief financial officers. This ownership was vital to make sure that the metrics were used and valued at the country level. The metrics emphasised four key changes MetLife wanted to bring about, and it has been able to achieve impressive results in all of them:
- Reduced cost to serve: MetLife introduced simpler and better customer experiences. It believed that this would save money by reducing the need to resolve disputes and confusion. For example, it changed the way call centre staff were incentivized, rewarding them based on first-call resolution, instead of speed of completing a call, as was previously the case. As a result of such changes MetLife has seen about a 20 per cent overall reduction in costs.
- Decreased churn: MetLife took lessons from some of its best-performing markets and disseminated them to its other markets around the world. Improved efforts in retention, cross-selling and upselling resulted in an increase of US$ 300-500 million in retained premiums.
- Enhanced revenue and earnings: MetLife developed new customer-led products, designed around core human needs. As a result, it was able to increase sales revenue by around 12 per cent across their markets (compared to 3 per cent growth in the industry overall).
- Improved experiences at moments of truth: The company focused on three “moments of truth” for the customer: buying a product, interacting with the service centre, and making a claim. It improved customer experience at these moments and was able to increase net promoter score at all of them (by 25 per cent for new buyers, by 85 per cent after interaction with a service centre, and by 125 per cent after making a claim).