Customer Service - Tailor it to Fit
by M. Rita Hollada, CPCU, CIC, CPIA

The recent wedding of our son made me think hard about the customer service that we offer our own insurance agency customers. It is a strange connection, I realize, but bear with me a moment and you will see how these two very diverse thoughts actually came together.

Normally, when formal attire is needed, I search the racks of the local department stores for an appropriate dress, usually "on sale," and my husband rents a tuxedo. For this special occasion, we decided to divert from this practice and go shopping with a little different criteria. I visited one of the higher end stores, known for its excellent customer service to select a dress from its special occasion line while my husband and son visited a similar men's store to purchase their tuxes. The result was not a bargain price, but rather clothing of good quality that was sized and tailored and customized to fit like a glove! We never questioned that what we got was worth every penny of the price.

This made me think about our agency customers. If we could tailor the product to fit them perfectly and customize our service to deliver exactly what was important to them in the manner that they desired, would price remain the key issue, or would great customer service prevail? Then the question became, exactly how do we find out?

So, I began to ask other agents. My request to them was "Tell me about a customer service nightmare or a customer service success story." I wanted to know not only what they had tried, but what had worked and what didn't. I can summarize their experiences by confirming that there is no such thing as "one size fits all" in either clothing or customer service. Each agency's experience confirmed to me that the majority of insurance buyers have issues that are far more important to them than price alone.

Agency owners told me some amazing tales of how personalized customer service, or the lack of it, affected the agency's bottom line. One Ohio agency manager expressed concern that they had so many customers who came to the office to pay direct billed premiums in cash that it required a part time person to simply handle the transactions. The agency principal wanted to find a way to discourage this practice. Several ideas were considered, including requiring these customers to purchase a money order or simply refusing to accept a cash transaction. Before doing anything, however, the agency manager decided to measure the impact that discontinuing this service might have. The agency calculated that the cash paying customers represented nearly $50,000 in commission income to the agency. When surveyed, these same customers rated the convenience of being able to pay in cash in their home town as a high priority. The agency wisely concluded that they would continue to accept and forward cash payments if it meant retaining this segment of their book of business.

Other agency owners relayed experiences that were not as positive. One family owned Maryland agency told of losing a long time, high value account after a claim. It was not because the claim was not handled to the client's satisfaction. The settlement had gone well and the client was satisfied with the speed and generosity of the company. The reason the customer left was that during the entire claim process, neither the owner nor any member of the family had personally contacted the client to express their concern.

The examples of personalized service are as varied as the agencies that practice them. An agent in Illinois told me that he gives his trucker clients his cell phone number so that they can reach him at any time, regardless of where or when they have a problem. A New York agency explained that they contract with a firm to do blind surveys of their client base to determine the reason that the customer chose the agency. If the survey results list "best price" too frequently, the agency reexamines its customer service to determine what additional things they can do to cement the relationship and move it away from price.

Personalized, tailored customer service does not happen by accident. It is something that requires a management philosophy and a commitment on the part of every staff member to fit their service to the client. It must become a part of the culture and the systems in an agency. For a start, the agency must develop a procedure to record customer preferences. This might be done as part of a new client orientation program during which the customer is offered a variety of services and asked to select those they prefer. For example, a quarterly newsletter might be offered or a semi-annual review suggested. Questions can be asked about the client's preferred method of communication. Some may desire e-mail while others want personal contact by telephone.

At other times, personal observation may indicate how a client prefers to be serviced. The time stressed, bottom line client will soon let you know that efficiency and promptness are a priority and that they prefer a no frills approach. The opposite might be true for the customer who drops in frequently, indicating a need for frequent contact and reinforcement.

Regardless of the way in which client preferences are identified, the agency must have a system to record and communicate them to all agency members. This can be done by utilizing a client information record, often the first screen in an automated file. Again, a commitment must be made by every member of the firm to consult this information to determine the individualized service requirements. One very impressive Georgia agency that I contacted collected the names of extended family members, designating them as first, second and third contact in case of emergency. They also recorded preferred time of day as well as home, cell or office telephone for contact. They knew workplace information, interests and hobbies of their clients. They find this information invaluable to them in solidifying customer relationships. In fact, one of their customers that I chanced to meet told me that he had an opportunity to secure very favorable business insurance through an association program, but decided against leaving this agency that knew him so well and watched out for him.

After I had selected my dress for the wedding, it looked pretty good right off the rack, but the wise sales representative suggested a few alterations. The wise insurance agent never settles for off the rack, but strives to design an insurance program and a customer service plan that is sized and altered and tailored to fit the client "like a glove."

About the author: Rita Hollada, CPCU, CIC, CPIA is an instructor for many National Alliance education programs, including their Dynamics of Service program and Certified Insurance Counselor Institutes. She has been an insurance agent in Delaware for twenty-five years and often works as an agency management consultant on practices and procedures.