Product insurer

Improving sales and reducing costs

A m ajor UK product insurer runs two related businesses. One business obtains valuable customer data, full of s ales opportunity, from a wide range of product manufacturers and retailers, and creates value by executing outbound, inbound and white mail marketing campaigns from two call centres with c.700 FTE on outbound and 800 FTE on inbound selling. The second business was the provision of outsourced telemarketing services t o a range of financial service clients. Our client’s UK property estate was close to capacity, while leases on key buildings were due to expire in the next three years. Private Equity owned, with a possible exit in the next few years, management asked David to review its operations and recommend a value optimising strategy.

The team, led by David, interviewed key players, assessed facilities and analysed recordings of inbound and out bound calls. We analysed in depth performance information, from the ratio of call attempts to Decision Maker Contacts and conversion rates, to the cost drivers such as average call handling time and staff utilisation. We compared its costs against leading practice benchmarks obtained from outsource procurements David had led. David’s work identified two key opp ortunities. Firstly, there was a si gnificant prospect – c.35% – of increasing revenue, by reduci ng the revenue opportunity lost by l ess competent sales staff. Secondly costs were too high

- in excess of 30% more than best practice benchmarks. We identified the reasons underlying this inefficiency
- and developed seven initiatives focussed on delivering benefits through better management of team performance, process improvement and targeted use of outsourcing.

We also assessed risks and opportunities on the property estate, where our client had perceptions that there was a ‘burning platform’ around capacity constraints that necessitated a location move. We found the risks could be mitigated without the need for risky and costly building moves, and a location move was highly likely to destroy value. The initiatives were conservatively expected to deliver an EBITDA improvement of £10m pa from cost reduction and revenue growth. David’s work on the property decisions helped prevent unnecessary investment in a move of c.£6m.