Software crucial to meeting customers' needs

Many businesses we come to take for granted could not exist without new and radical uses of technology.

That is the case with Activa, a subsidiary set up by health insurer Southern Cross to provide a way for people to manage all their health spending in one package.

Customers are asked to work out their usual health spending and put that sum into an interest-bearing Activa account.

They are given an eftpos card to use for all health-related transactions, including doctor visits, pharmacy spending, gym subscriptions and purchases of sports equipment.

An optional health insurance plan is attached, with discounts for non-smokers who exercise regularly. Activa is also building a partner network, which will offer benefits and discounts to people using the Activa card for their purchases.

Making everything happen is customer relationship management (CRM) software developed in Auckland by StayinFront, including sophisticated new process management and workflow technology.

Craig Grimshaw, Southern Cross' head of partner and service relations, says StayinFront CRM will handle all customer acquisition and retention, including lead generation, capture, management and conversion, whether they come by phone, the web or other channels that may be developed.

As well as holding all the customer information collected by Activa, the StayinFront CRM system links to multiple back-end systems, either directly or through the Biztalk integration layer provided by Southern Cross' outsource technology provider, Datacom.

"It means instead of having to go to multiple systems, the call centre representative has a single view of the customer," Grimshaw says.

"ASB Bank is issuing the eftpos card, so there are links to the bank, to Southern Cross, to Baycorp, to Datacom, and so on."

About 1.3 million New Zealanders are covered by private health insurance. Grimshaw says Activa is targeting those 2.8 million who are not by emphasising the spread of healthy behaviour.

It estimates New Zealanders spend $2 billion a year on health-related goods and services.

Grimshaw says the business has been built to be flexible, because Southern Cross believes the model will evolve.

"Over time, we will use the Stayinfront CRM to look at the target market and analyse the spending patterns of different segments of customers," he says.

"We can look at what constitutes healthy behaviour and target markets based on that."

Stayinfront was chosen because it has developed powerful analytical capability and because it was an extremely flexible system with support as close to hand as Ponsonby.

It was also able to cope with a tight timeframe. "Speed of implementation was important," Grimshaw says.

StayinFront is now a multinational business with a headquarters in New Jersey and customers in more than 20 countries, but most of its development is still done in Auckland.

New Zealand manager Fred de Jong says the Activa assignment played to StayinFront's strengths.

"We believe every business is different and they are all changing, those are our two key mantras," de Jong says. "If you accept those two things, you have to have a product which is flexible enough to build systems that are an exact fit but that you can change easily, and still have systems which are cost-effective."

De Jong says rather than get stuck on automating old business models, technology providers need to develop the tools to build new businesses.

He says while the company has had analytical tools for a decade, the latest StayinFront CRM 9.0 tightly integrates analytics with the core product.

Apics, the Association for Operations Management, defines CRM not as a technology but as a marketing philosophy, where information is analysed to provide marketing and sales with the necessary information to service customers' existing and potential needs.

Analyst Predrag Jakovljevic of Technology Evaluation says while many CRM software applications have focused on sales force and marketing automation, CRM must also be concerned with identifying, servicing, retaining, and increasing profitable customer relationships.

"The technologies that CRM harnesses should enable greater customer insight, increase customer access, create more effective interactions with customers and trading partners, and be integrated throughout customer channels and back-office enterprise functions," he says.