Business Moneyball: Calabrio Helps a Major Insurance Customer Provide Better Service and Stay Competitive

Are credit card fees costing your business millions of dollars every year? If you’re like most companies, the answer is a resounding yes. These fees, which average from 1 to 4 percent, can keep businesses from remaining competitive, and worst of all, can attribute to the rising cost of goods and services for consumers.

At my company, a top 20 insurer in North America, we believe in providing the best possible customer experience by giving the most value to our customers for every dollar they spend. However, that value—protecting individuals and families—was starting to become more expensive every year. After we analyzed how much credit card processing fees were eating into our cost of doing business, we found that over a three-year period, these fees were adding up to an excess of $10 million for our top customers.

We knew that to continue to provide our customers with the most competitive premiums on the market, something had to be done. We also knew that eventually, these costs would be transmitted to our customers, making our products less competitive, so we decided to stop accepting credit card payments altogether.

We were very concerned about how our customers might react to this shift, as well as how our sales force and independent agencies selling our products would respond. The fear of losing customers was significant, and yet, the financial opportunity was too big to ignore.

Business Moneyball

Professionally, my inspiration is Branch Rickey. He was a businessman whose genius lay in developing the best results for the least money. He was also the father of baseball analytics, now called Sabermetrics. 

In 1947, with the Brooklyn Dodgers, he hired Major League Baseball’s first statistician, Allan Roth. With Roth’s analysis in mind, Rickey argued that on-base percentage was more important than batting average. Curiously, it wasn’t until the sixties that analytics was used in business. Though late to the game, today, data drives almost all business decisions—and with the right technology, it can create dramatic results.

Measuring Customer Sentiment with Calabrio

My team and I took a page from Rickey’s playbook and turned to data to gain insights into the customer reaction to our new credit card policy. 

With Calabrio, we set out to analyze the speech in all customer interactions and flag specific phrases related to our policy change to gain insight into how our customers would react to this adjustment. We defined a series of phrases associated with this business change, such as “I’m upset about my credit card payment,” “I can’t make a credit card payment,” “I’m frustrated,” and terms like “ridiculous.” 

We then continued to evolve the phrases and narrowed the parameters so we could capture more relevant phone calls. With Calabrio, we focused our investigation on the date the policy change went into effect, as well as added the phrase “yellow flyer.” The yellow flyer was the notification we sent to our customers describing the update to our policy.

This constant evolution and refinement led to some rather dramatic results: Overall, our customers weren’t upset about the change. In fact, the majority were happy with it. Plus, out of 5 million customers, we identified only 63 who were upset and were prepared to leave. Their biggest concern: not being able to get airline miles by using their credit card.

We created a sentiment analysis using a graphical representation of how many of these flagged phrases occurred over a period of time. From a data standpoint, once we got through the initial noise of the change, the calls just disappeared. We went from 1,000 concerns a week to almost none.

When we presented the data to our leadership team, we could identify the sources of most concern and validate that the worry was short-lived. Having the data visualization allowed leadership to quickly and easily grasp the minuscule level of apprehension in the customer base, which allowed the entire company to make decisions out of real insights rather than gut instinct or fear.

Increasing Efficiency and Ease of Business

The ease of doing business with Calabrio was extraordinary. We didn’t have to hire a specialist, and everything could be learned in less than a day.

The best part about Calabrio Analytics is it takes very little maintenance or management. It doesn’t even require a full-time role. We’ve created a phrase dashboard so every single leader in our contact centers can leverage this technology, and it takes less than 30 minutes to get an employee set up with their own Calabrio dashboard. 

With Calabrio’s economy of scale, we’re able to scrub a large amount of customer sentiment in a short amount of time. The other part of the technology that’s incredibly valuable is that you don’t have to listen to a call in its entirety; you can jump right to the problem point in the phone call and quickly identify and address the issue. 

The insights gained through Calabrio’s speech analytics software has led to a cost savings of over $3.5 million per year on credit card fees. This allows us to do business more cost effectively for our customers, and while other companies raise their rates, these insights allow us to stay competitive. 

Currently, we use Calabrio to scrub 100 percent of our phone calls. We then wrap these analytics into something meaningful—and actionable—which enables us to provide better services and save our customers money. It truly is a home run.