Case Study Helsana
M-Commerce at Helsana Health Insurance: Mobile Premium Calculator
Annette Reichhold, Ragnar Schierholz
Institute for Information Management, University of St.Gallen
About „The Electronic Collaboration Study“
“The Electronic Collaboration Study” is a joint project of the Institute for Information Management of the University of St. Gallen (Switzerland) and the Center for Digital Stra- tegies at the Tuck School of Business at Dartmouth, Hanover, NH (USA).
Both institutions develop case studies about interorganizational electronic co-operation that demonstrate how companies are able to achieve competitive advantage by deploying information technology. The results are options for action for a successful electronic co- operation.
The scientific charge of the project is incumbent on Prof. M. Eric Johnson, PhD, director of the Center for Digital Strategies at Tuck and Prof. Dr. Hubert Österle, director of the Institute for Information Management and Chief Technology Officer of “The Information Management Group” (IMG). Further the goals of the project are supported by Prof. Dr.
Walter Brenner and Prof. Dr. Elgar Fleisch, University of St. Gallen, as well as Prof.
Hans Brechbühl and Prof. Stephen Powell, PhD, Tuck School of Business.
About the authors
Annette Reichold is Research Assistant at the Competence Center Customer Knowledge Management at the Institute for Information Management of the University of St.Gallen (Switzerland), e-mail: annette.reichold@unisg.ch
Ragnar Schierholz is Research Assistant at the Competence Center Customer > Knowl- edge > Performance at the Institute for Information Management of the University of St.Gallen (Switzerland), e-mail: ragnar.schierholz@unisg.ch
Weiterführende Links
Fallstudiendatenbank: http://cases.iwi.unisg.ch
Center for Digital Strategies: http://www.tuck.dartmouth.edu/digitalstrategies
Institut für Wirtschaftsinformatik: http://iwi.unisg.ch
Inhaltsverzeichnis iii
Inhaltsverzeichnis Zusammenfassung... iv
Abstract ... iv
1 Company and Problem... 1
2 Starting Point ... 2
3 Project ... 4
4 New Solution ... 6
5 Contextualization ... 11
Interviews... 14
Literature... 14
Zusammenfassung iv
Zusammenfassung
Seit der Einführung von auf GSM basierenden Sprachdiensten und SMS als Datendienst haben sich viele Technologien auf dem Gebiet der Mobiltechnologie entwickelt, ohne im Stande zu sein eine wesentliche Verbreitung zu erreichen. Zudem werden SMS grössten- teils für die private Kommunikation gebraucht, die gewerbliche Anwendung ist immer noch selten. Die Frage für mögliche und vorhandene Anwendungen, sowie für neue Technologien in kundenorientierten Prozessen gilt es nach wie vor zu klären. Diese Fall- studie beschreibt ein Beispiel einer Anwendung etablierter Mobilfunktechnologien im Kundenakquisitionsprozess eines Krankenkassenanbieters. Wichitge Aspekte, die sich als äusserst wichtig für den Erfolg dieses beschriebenden Projektes erwiesen haben, werden aufgezeigt
Abstract
Since the introduction of GSM based voice services and SMS as data service, many new
technologies have evolved in the field of mobile technologies, without being able to gain
a substantial spread. Additionally, the use of SMS is mainly for private communication,
commercial applications are still rare. The question for possible applications and of
existing as well as new technologies in customer oriented processes is still to be answe-
red. This case study describes an example of the application of established mobile techno-
logy in the customer acquisition process of a health insurance provider. Essential aspects,
which have proven to be crucial for success in the described project, are pointed out.
1 Company and Problem 1
1 Company and Problem
Company. The Helsana Versicherungen AG (Helsana) emerged from the merger of Hel- vetia (79%) und Artisana (21%) health insurances. Helsana offers various kinds of health insurance services. With more than 1.4 million Customers and 2,600 employees Helsana is the largest health insurance provider in Switzerland. The yearly premium yield sums up to CHF 3.8 billion (US$ 2.5 billion).
Helsana Versicherungen AG
Foundation Under the name „Helsana“ since 1997 (from the merger of Helvetia and Artisa- na)
Headquarter location Zurich, Switzerland Branch of trade Health insurance services
Business areas Health, accident and nursing care insurances
Homepage www.helsana.ch
Premium yield CHF 3.595 million (2001) 3.824 (2002) Revenue CHF -386 million (2001), 40 million (2002)
Market share 15 %
Employees 2,625 (2001) 2,335 (2002)
Customer base 1,436,357 (2001) 1,437 ,835 (2002)
Table 1-1: Short characteristics of the Helsana Versicherungen AG
Progrès Caisse Maladie (Progrès) is a regional health insurance provider in western Switzerland. Since the acquisition by Helsana, Progrès extended their coverage area to overall Switzerland. In 2001 Progrès switched to a young, modern image. Progrès merely offers basic standard health insurance plans covering the mandatory requirements by Swiss legal regulations. Additional plans are being offered by Helsana. Since late 2001 Progrès offers its customers to sign up for insurance plans through the company’s home- page. Progrès was able to extend its customer base from 37,500 customers in 2000 to 53,000 in 2001 and to over 100,000 customers in late 2002. With its image and offerings Progrès mainly addresses young customers. The average age of the customer base in 2001 was 29.9 years. The premium yield in 2001 was CHF 60.2 million (US$ 43.2 million).
Progrés Caisse Maladie
Foundation 1903
Headquarter location Le Locle (Canton Jura) Branch of trade Health insurance services
Business areas Health, accident and nursing care insurances
Homepage www.progres.ch
Premium yield CHF 60.2 million (2001) Customer base 100,000 (2002)
Table 1-2: Short characteristics of the Helsana Versicherungen AG
2 Starting Point 2
Challenges. Usually, in Switzerland, insurants can switch their health insurance provider only with an effective date of December 31st (except standard health insurance plans with a fixed franchise of CHF 230 which can be switched with an effective date of June 30 th ).
Insurants have to cancel their contract by November 30 th (May 31 st , respectively). Thus the willingness of switching and the interest in health care offerings and premium calcula- tion rises rapidly in fall. Hence health insurance providers conduct heavy marketing acti- vities trying to keep existing and acquire new customers. The time period at the end of each year is the only time where health insurance providers in Switzerland can work their customer base. It is of crucial importance for the providers to place their own offering well visible among the offerings of competitors. Therefore effective addressing of the po- tential customer base is crucial for a successful acquisition process. For this reason Hel- sana is looking for innovative ways to communicate with prospects and customers.
2 Starting Point
Strategy. Helsana cooperates with Progrès for 12 years. The Progrès brand stands for af- fordable offerings for young people, the Helsana brand symbolizes safety, reliability and tradition.
Progrès’ strategy consist of using modern technology for addressing customers and for customer interaction, embedded in a multi-channel management. By offering self-service options processes are outsourced to the customer, reducing acquisition und service costs.
For example, customers can select insurance plans and immediately sign up through the company homepage. Only the legally binding signature must still be done paper-based through traditional mail, due to legal requirements by Swiss law. A new act for the eman- cipation of digital signatures is under way though. The product selection process is sup- ported by a web-based premium calculator embedded in the company homepage. The af- fordable pricing and the online self-service options specifically attract younger people.
Strategie
Systeme
• Günstige Prämien
• Günstige Vertriebskanäle
• Junges, modernes Image
Prozess • Kundenakquisition verstärkt über das Internet
Beschreibungsebene Charakteristika
• Webbasiertes Prämienberechnungsmodul
Strategy
Systems
• Affordable Premiums
• Efficient Sales & Marketing Channels
• Young, modern brand Image
Processes • Customer acquisition mainly through Internet channel
Description layer Characteristics
• Web-based premium calculator module
Figure 2-1: Short characteristics
2 Starting Point 3
Processes. Progrès uses multiple channels in the customer acquisition process. Customer obtain offers through branch offices, field services, independent sales agents and the in- ternet. In the following the electronic acquisition process is introduced. It consists of the channels call center and internet. Customers use the web-based premium calculator modu- le to compute individual rates for different offerings and compare the plans. Therefore the required data including name, age, gender and zip code as well as employment informati- on, effective date of the contract and the desired plan need to be entered by the customer.
In a second step the customer can choose certain options available for the selected plans.
If the basic standard plan is desired, the individual premium can be computed with year of birth and zip code only. This is frequently used for sweepstakes. If a customer takes part in a sweepstake, he or she receives an individual premium information before submitting participation data.
Insurance contracts can be closed online. Customers can also contact the call center and receive individual assistance, consulting and close a contract.
Kunde Helsana / Progrés
Kunde Call Center INTERNET
Eingaben Kunde Prämien-
berechnung
Angebot prüfen
Vertragsformular bereitstellen
Alternative 1:
Anruf im Call Center
Alternative 2:
Vertrag online abschliessen Anruf Annahme
Beratung
Veranlassung Vertrags- zusendung
Veranlassung Vertrags- zusendung
Besuch von www.progres.ch
Darstellung Angebot
Anfrage formulieren
Vertrag unter- zeichnen
Angebot annehmen
Kunde Helsana / Progrés
Customer Call Center Internet
Enter data Premium
calculation
Evaluate offering
Offer contract forms online
Option 1:
Contact Call Center
Option 2:
Close contract online Consulting
Initiate mailing of complete
contract
Visit website www.progres.ch
Display result
Post request
Mail signed contract Accept offer Receive Call
Initiate mailing of contract
forms
Figure 2-2: Process Online Acquisition
3 Project 4
Systems. Core component of the supporting systems in the online acquisition process is the web-based premium calculator module which is embedded in the Progrès homepage.
Trigger. The success of the brand Progrès since the introduction of the new homepage in 2001 has proven the potential of the Internet channel. Helsana has not yet gained any ex- periences with a mobile channel, but is willing to explore the possible applications and potentials of this innovative sales and marketing channel. Helsana decided to take first steps towards m-commerce. This innovation was planned to be used by the Progrès brand first in order to achieve a further differentiation of the brands Helsana and Progrès. Also, a higher response premium was expected from the target group of Progrès as compared to the Helsana customers.
3 Project
Goals. Initiator of the project was the e-commerce group in the sales and marketing de- partment. After implementation customers were supposed to be able to request an indivi- dual premium offering at any time from any location by triggering the web-based premi- um calculator using a cellular phone.
The primary goals of the project have been:
• Innovation. One goal was to gain experiences with the mobile technologies and to eva- luate the potentials of the mobile channel. The solution to be developed was supposed to be simple in handling for both the company and the customers.
• Support of the acquisition process. Application of the mobile channel in marketing ac- tivities during the peak season of switching health insurance plans was planned. The new technology was supposed to create attention and raise customers’ interest in the Progrès brand. Once this goal is achieved the customers follow the already existing ac- quisition process. The existing sales infrastructure wasn’t supposed to be redesigned by the introduction of the mobile channel, but to be extended by it.
• Low costs. In order to realize the project in an efficient and timely manner, existing re- sources were supposed to be used wherever possible. Thus the effort was to reuse the existing web-based premium calculator module in the mobile channel as well. In order to be able to convince prospective customers through individual consulting the call cen- ter was to be involved also.
Implementation. The project was launched in June 2002 and was under time pressure in order to allow for the usage of the new system in the marketing campaigns during the peak season in October through December. The project team consisted of eight members.
The project management was outsourced to the Novawind company (marketing, e-
3 Project 5
commerce and m-commerce consulting) due to lack of internal capacity and know-how.
Project manager was Mr. Gilli Cegla. On behalf of Helsana Erik Krumdieck, head of the e-commerce group, took the role of the steering committee. Furthermore the project team included a Helsana technician, an employee of Softcon, provider of the web-based premi- um calculator module and an employee of Mobile Solutions (Wireless ASP). Mobile So- lutions realized the forwarding of incoming mobile requests to the web-based premium calculator. The design of the business process was assigned to a member of the sales and marketing department and a member of the call center team. The marketing of the mobile premium calculation offering was left to the marketing department.
The project spanned a time frame of four months with only partial utilization of the team members. The fields of technical issues, process design and marketing each required one person week.
Following the advice of the external project manager, Helsana chose GSM/SMS as the base technology. Reasons for this decision were operational availability, general availabi- lity of appliances on customers’ side and simplicity of the SMS technology. SMS is a standard feature of GSM based cellular phones and members of the target group are very familiar with the use of SMS. Another strength of SMS is its performance and reliability.
SMS messages are limited to 160 characters, which both limits the content of delivered messages and also leads to simple data input.
In order to be able to make use of the web-based premium calculator module, incoming SMS requests need to be translated into web requests. In return, the resulting premium needs to be formatted and sent to the requestor as an SMS message. The transformation of the web-based premium calculation to cellular phones is realized through an SMS gate- way. The entire transformation process was outsourced to Mobile Solutions for a monthly license fee. The provider guarantees availability of the service for customers of all Swiss cellular providers (Swisscom, Orange, Sunrise).
During the project planning phase the decision was taken to exclusively promote the mo-
bile premium calculator through offline marketing activities. Chosen message carriers
included posters, handout flyers in trains and busses, table flyers in restaurants and give-
away items such as jelly baby packets. The conveyed messages describe the offering and
the process to obtain a mobile premium offering. The marketing concept follows an acce-
lerated „AIDA“ approach (Attraction, Interest, Desire, Action) [Kotler and Bliemel 1995,
S. 916 ff]. The marketing campaign attracts the attention of the customer, the innovative
technology raises the interest, the affordable premium convinces the customer, who final-
ly decides to take the action and close a contract. Thus, the innovative acquisition channel
supports the process steps of “attraction” and “interest”.
4 New Solution 6
Prospective customers are forwarded to the call center in order to have a personal contact with the customer during contract closure. The responsible call center agents received a one-day training to be informed about the accompanying marketing activities and to get an overview over the process steps the customer has gone through in order to receive a premium offering. For the call center a service level agreement was made. A customer requesting a call-back by the call center is supposed to receive the call-back within a time frame of 10 minutes. After all, the mobile premium offering usually is requested as a spontaneous reaction to a marketing activity, thus the response time needs to be low to be able to leverage the spontaneity. The customer needs to be reached in the same situation in which he or she is already focused on the offering.
Critical Success Factors. The lean and timely realization of the project was critical to the success of the project. This was achieved by reusing existing resources such as the web- based premium calculator and the already existing premium calculation of the basic insu- rance plan as well as by outsourcing the project management and the transformation pro- cess.
The project was aimed at the evaluation of potentials of the mobile channel, not at a final, full scale implementation. By reusing resources costs could be kept at a minimum level.
This way the support of crucial groups inside the company such as general management could be gained. Another important factor for building a lean solution was the restriction to a single standardized plan on which the calculated premium was based. All customers were offered the same plan, without further options.
The timely realization of the project was absolutely necessary and critical in order to have a working solution up and running in time for the peak season and to be able to evaluate the mobile channel. Therefore Helsana decided to reduce its own role to the one of the project steering committee and to outsource the project management. Also, the technical implementation of the solution was assigned to an external contractor. This way Helsana only pays for the actual usage of the system based on a monthly license fee, which can be purchased as needed. Thus fixed costs could be avoided.
4 New Solution
Strategy. M-commerce as well as e-commerce isn’t considered a self-contained business model at Helsana but rather as an additional channel within a multi-channel-management.
Multi-channel-management is an activity within customer relationship management,
which targets the design and management of customer interaction ([Cespedes 1988],
[Wirtz 2002]).
4 New Solution 7
The mobile offering was implemented for the Progrès brand first of all in order to stress the brand’s innovative image and also in order to achieve a differentiation between the brands Helsana and Progrès. It was available in 8 German-speaking cities and 3 French- speaking cities. To make the process of a mobile premium request as simple as possible, a standard basic plan was chosen. The customers weren’t given any choices (e.g. semi- private or private insurance with choice of franchise). Those options could be chosen though, if the customer later on chose to contact the call center to close the contract. Cus- tomers could request individual rates via SMS from October through December. Helsana wanted to attract the attention of customers who were willing to switch their health insur- ance plans. The required support with marketing campaigns the necessary license fees for the SMS gateway gave reason for restricting the systems availability to this time frame.
Strategie
Prozess
Systeme
Beschreibungsebene Charakteristika neu Charakteristika alt
• Potential der mobilen Technologie anhand des Akquisitionsprozesses getestet
• Unterstützung des innovativen Images
• Einbindung des mobilen Kanals in den Akquisitionsprozess über das Call Center
• Vermarktungsmassnahmen
• Nutzung der SMS Basistechnologie
• SMS - Gateway zur Transformation zwischen SMS und Web
• Günstige Prämien
• Günstige Vertriebskanäle
• Junges, modernes Image
• Kundenakquisition verstärkt über das Internet
• Webbasiertes Prämienberechnungsmodul
Strategy
Processes
Systems
Description layer Characteristics after project Characteristics before project
• Evaluation of the potential of the mobile channel in the acquisition process
• Emphasizing the modern, innovative brand image
• Integration of the mobile channel into the acquisition process
• Accompanying marketing activities
• Use of SMS as base technology
• SMS gateway for transformation between web and mobile
• Affordable premiums
• Efficient sales & marketing channels
• Young, modern brand I
• Customer acquisition mainly through Internet channel
• Web-based premium calculator module
Figure 4-1: Comparative short characteristics
Processes. Existing processes were extended by the new system, not redesigned. Custo- mers can still communicate with the company through all previously available channels.
The mobile premium calculation offering is merely a new way of generating a new lead.
It is completely integrated into the existing processes.
Customers’ attention is caught by offline marketing activities. Posters, table flyers etc.
and several promotion activities in October, including distribution of give-aways to by- passing pedestrians, informed customers about the offering and the required steps to take advantage of it.
Customers submit a request for an individual premium via an SMS message consisting of
12 characters, e.g. PD 1968_8001. The 12 characters consist of a 2 letter program identi-
fication code, in the example “PD“ for “Progrés Deutsch“ (“Progrès German”), year of
birth and zip code. The marketing messages also conveyed the short and memorable pho-
ne number 20120, which is usually reserved for special activities and sweepstakes. The
4 New Solution 8
SMS message is first sent to Mobile Solutions. Mobile Solutions translates the SMS mes- sage into format readable by the web-based premium calculator. This request is then sub- mitted to the premium calculator which performs the premium calculation based on year of birth and zip code. The premium is sent back to Mobile Solutions, is translated into an SMS message and then sent back to the requestor. The entire process is performed in a very short time (1-5 sec). The premium is based on a minimal insurance plan at ca. CHF 150 with a fixed franchise of CHF 600. If the offer arises the customer’s attention, he or she can contact the call center. According to Helsana’s creed the contract closure requires personal interaction. Two options are available for customer’s choice. The customer can request a call-back by the call center. To do so, he or she replies to the SMS message with the premium information with a message “PDJ” (J for “Ja”, yes). Mobile Solutions for- wards this message to the call center so they can call the customer on his or her cellular phone. Only in this case the call center receives the customer’s cellular phone number, which is done in order to comply with Swiss data protection law. Alternatively customers can call a free 1-800 number and contact the call center in this manner. In personal con- tact with a call center agent a contract based on the offering as given in the SMS message can be closed. Additionally extensions and modified options can be included according to the customer’s needs as determined in consulting by the call center agent.
Call center agents are available Monday through Friday, 8 am through 8 pm.
Systems. The web-based premium calculator module could also be used as a base for the
mobile premium calculator. Thus the efforts for additional systems and customizing could
be kept at a minimum. Just for the transformation of the SMS message into a format that
is readable for the web-based calculator a customized solution had to be licensed from the
wireless ASP. This solution is written as a Java application. The input is the SMS mes-
sage as delivered from the cellular network operator. The body of this message is parsed
to extract the year of birth and zip code. This data is then translated into an HTTP request
which is submitted to the web-based premium calculator. The HTTP response is retrieved
and again parsed to extract the result of the premium calculation. The premium is inserted
into an SMS message template which is then sent to the cellular network operator for de-
livery to the requestor.
4 New Solution 9
Helsana / Progrés Helsana / Progrés
Kunde Kunde Call Center Internet Mobile Solutions
Angebot wahrnehmen
Prämien- berechnung
Angebot prüfen
Alternative 1:
Rück- sendung SMS SMS
transformieren
Alternative 2:
Anruf CallCenter über 0800-Nr.
Vertrag unterzeichnen Annahme SMS
Rückruf
Web Request tranformieren
SMS verfassen/
versenden
Versendung Angebot
Weiterleitung mit Tel.Nr.
Annahme des Angebots Annahme Anruf
Annahme Anruf
Veranlassung Vertrags- zusendung
Beratung Anfrage
formulieren
