Meeting the Needs of Customers by Providing Superior Customer Service

During a recent project, the agency owners and the staff all agreed that the key strength of the agency was “customer service.” When asked to define “customer service” most people replied with statements like: it is calling the client back, resolving issues in a timely manner and doing what the client asks.

What was evident in that agency–and in fact most agencies–is that customer service is doing what it takes to keep the client pacified. In other words, agencies do what the client thinks they want, not necessarily what the client actually needs.

That agency that thought they had great customer service in fact had a six-month backlog in getting policies back to the client. The agency sold insurance but did not provide true risk management advice. Yes, the new auto was added to the policy in a timely manner, however, the agency fell flat when it came to being professional insurance advisors.

It is also interesting that most agencies feel they provide “superior” customer service. Obviously, by definition, most agencies do not provide “superior” customer service. Most agencies provide just average customer service–only a few firms provide superior service. So what is customer service and what is “superior customer” service?

The main function of an insurance agency is to collect, compile and distribute information. The quality and significance of how information is collected, compiled and distributed will define customer service. There are three broad categories for analyzing customer service: Professional Advice, Effective Communications, and Information Collection and Processing.

Professional advice
Professional advice is a simple concept but often overlooked. It is an insurance broker that not only provides in-depth consulting before and after the sale, but also additional services throughout the relationship that help mitigate insurance costs or streamline insurance related problems. Clients (and prospects) see the organization as a resource for solving insurance related problems. It is not being an order taker or sales person but instead being the risk management consultant to the client.

“Professional” insurance organizations practice continual product improvement by evaluating the future needs of clients (and prospects), and then developing solutions to these future problems. They create new ways of exchanging pertinent information. The best firms are those that constantly improve themselves and track the ever-changing business world.

A good place to start is to always use industry specific coverage checklists. Such checklists can be obtained from PS/4, Sage, IRMI, etc. Checklists will help make sure the most of the typical risks are reviewed and discussed on new accounts and provide a good review for renewals. Customers deserve a full review of their loss exposures at least every three years, no matter the size of the account. Provide the client with benchmarks so they can compare their insurance needs with peers in the industry.

This type of customer service approach will produce additional revenues for the agency and will increase retention. At McDonald’s, the order taker will ask if customer wants fries with the hamburger–and the additional sale is often made. In a similar fashion, an insurance professional will review all risks with their client and ask if they want EPL with that CGL.

Although it is not required, specializing in just a few industries will allow the producers and CSRs to understand the terminology and unique needs of the clients. The risks and insurance needs of a dairy farmer are very different than those of a law firm. So, when the staff has worked on a few dairy farms they become familiar with the best way to service those accounts.

Effective communication
Producers and CSRs needs to be good “people” persons. They must have effective social skills and the ability to act as a go-between for the different parties: clients, other employees, underwriters and agency owners.

Producers and CSRs need to practice active listening and not just hear the client’s words, but also find out what the client is actually saying. Clients know their businesses but they do not know insurance at the same level. Good customer service means discovering the risk management needs of clients while educating them about insurance and available services.

The typical CSR spends about half of his or her time talking to clients or insurance company personnel, gathering and distributing information and problem solving. The balance of time is spent on paperwork and computer input. Ironically, some CSRs can’t wait to get off the phone with the client so they can go back to the clerical activities they often think is “customer service.”

Producers and CSRs need to always treat clients with dignity and respect. Verbal communications, on the phone or in person, need to always be professional. Management needs to help the staff improve communication skills by letting them take classes in those areas. Staff meetings can include role-playing so that all the staff in the agency can see a demonstration of management’s expectation of professional communication.

It is also important to pay attention to e-mails, letters and proposals. These documents need to be professionally written and standardized in format. Good customer service means that written documents are easy to understand and do not contain spelling or grammatical errors. Management needs to make sure updated letter templates are provided and that e-mails are periodically audited for quality assurance.

Information collection and processing
This category contains some unique elements and also some combination of the other two categories. The collection of information tends to be the most significant skill for CSRs and producers. Good customer service means knowing what information to gather and how to ask for it. Patience, determination and diplomacy are necessary whether probing the client for pertinent information to complete a claim form or getting a quotation for coverage.

Processing of information is time consuming and a part of customer service. Typically, CSRs are rated by the quantity of work they produce and not the quality. Firms that practice good customer service figure out ways to reduce the time spent on clerical activities and data processing so they can devote more quality time with the customer.

Streamlining the agency operations is the first step. Eliminate redundant steps. Incorporate staff stratification–have the staff delegate work to lower paid but qualified assistants. Going paperless will create a big improvement in productivity. Many firms are doing this even for large commercial accounts now. Management needs to make sure that the staff has the tools to operate in an efficient environment. The staff needs to focus on the customer and management needs to focus on the staff.

Superior customer service
Many clients think they know what services they want and the agent is happy to meet those minimal expectations. These are firms that think they have great customer service because they answer all calls within 24 hours. This type of business exchange satisfies the majority of those insured and is practiced by most agencies.

On the other hand, there are many clients that need, want or should have an “insurance professional.” These types of clients need and appreciate high quality professional advice and superior service.

Think of Amazon.com. If a person orders a book from them, that order can be tracked up to delivery. Most people don’t track their orders, but that service is available and can be useful from a peace-of-mind standpoint. Amazon.com also provides product reviews, offers suggestions for other products and makes sending gifts very easy. This can be considered “superior” customer service.

The client expects certificates issued in a timely manner. The client will be surprised to see a proposal that not only compares quotes, but compares the insurance coverage of that business with its peers. The client expects a helpful voice on the phone, but the client will be surprised when the person behind the voice understands the client’s industry and can speak the language. This can be considered “superior” customer service.

A final thought
Agencies that operate as insurance professionals and offer superior customer service are more productive, more profitable and have better retention than the average agency. Clients are often willing to pay a premium for this level of service. These are certainly motivating factors to investigate and perhaps adopt this approach.

However, it is not easy to reach this level. The agency must be diligent in developing, implementing and refining procedures and systems that meet the ever-changing needs and expectations of the client. Owners and management need to provide all the support the staff needs so that the staff can focus on what the customer needs. A firm that incorporates this approach has a different culture than the herd.

It is a lot of work to meet the criteria of providing “superior” customer service. If the vision is to attract large, sophisticated accounts, then the firm needs to offer large, sophisticated, superior customer service. It also takes a long time to develop the relationship and reputation that attracts such clients. But offering “superior” customer service will pay off.

Bill Schoeffler and Catherine Oak are partners at Oak & Associates. The firm specializes in financial and management consulting for independent insurance agents and brokers. They can be reached at (707) 935-6565, by e-mail at bill@oakandassociates.com, or visit www.oakandassociates.com.

Academy of Insurance Class on Improving Customer Service