Insurance is frequently a complicated product to buy as well as to use. So, it’s not exactly shocking when a prospect or an insured complains. These events are a permanent part of the insurance reality. The complaints are irritating and tend to place the person receiving them on the defensive. Yet as annoying as they are, they are also indispensable to a P&C agency’s growth. Complaints, when delivered for cause, are direct demands for help. In the heat of the moment, the agency staffer who receives this demand may not always recognize it as such.
When an individual complaint is taken personally, what might otherwise be a minor concern can escalate into a major issue. The next level result is an unhappy person and a lost account. Arithmetically, it’s 3-to-5 times more costly to attract and book a new insured than it is to keep an existing one. Therefore, it’s important to the bottom line that management and staff regard each complaint as a valuable heads up, instead of just some wacko letting off steam. Agencies can ignore their insureds’ cries for help and pay the price, or heed them and reap the rewards. Here’s how agencies can better manage complaints.
The secret to listening to a complaint is remaining quiet enough to actually hear the entire concern, one time, without interruption. Cutting off an irate insured in mid-complaint unnecessarily adds fuel to the fire. Trying to impose a remedy before reaching this point is futile. Moreover, the mere act of listening is beneficial, even when the person’s perceived problem cannot be favorably resolved. The simple pleasure of being heard allows the complaining party to hang up, emotionally satisfied, at least to some extent.
Agencies are fortunate when unhappy clients and prospects reasonably criticize their office procedures and the actions of their personnel. That’s because if current and potential buyers don’t complain, then policies cancel or non-renew and new proposals are rejected — all without a revealing explanation. If agency actions are to be corrected, the root cause of this terminal dissatisfaction must be learned. Grievances, regardless of their ultimate validity, are usually well worth exploring, if only to understand how some insureds and prospects perceive a particular sales or service issue. One beneficial side effect of these complaints is that no one in the office wants to hear the same ones over and over again. This, in turn, motivates staff and management to take note of the core problems, investigate them, and to ultimately make adjustments.
Management must constantly search for dangerous and favorable trends of client satisfaction. Surveys are popular avenues to this information, but they seldom take into account frustration that’s explosive enough to cost an existing client or a new sale. That’s why agencies need to cull complaints from multiple sources of entry. Encourage this unhappy flow of data by making it simple for insureds to register their concerns. Below are five common approaches to collecting complaints.
Make one person in the agency responsible for collecting and analyzing all complaints. Without someone in charge, the CSR or producer who caused the original problem is the one who tries to remedy it. This is not advisable for a variety of reasons. Prominent among them is that a formal complaint demands at least cursory investigation from a non-involved party. Rotate the difficult position of Complaint Executive among your senior stafff to avoid burnout and favoritism.
The data that’s gathered from the collection sites may be stored in a spreadsheet, database, or commercially available complaint software. The exec’s analysis can be as basic as noting numerous complaints about a specific employee or carrier, by a particular insured, or resonating due to a specific cause, such as a missed coverage. Even this simple scrutiny can be illuminating. The current executive must also act as the firm’s primary complaint contact person for staff, carriers, clients, and prospects.
Analysis and benefits
Collecting, analyzing, and acting upon agency complaints are all beneficial for an agency’s growth. The following six reasons provide additional motivation for taking them seriously.
Unhappy clients spread the wrong word. According to legend, one discontented customer tells nine friends and colleagues about each bad business experience. Dissatisfied insureds are far more likely to talk about you than happy ones. What they say in anger won’t exactly enhance an agency’s image.
Build long-term client loyalty. Many clients will stick with their agency even if they’ve been accidentally under-quoted or suffered a minor uncovered loss. All they ask is that their complaint be willingly heard and rapidly rectified when possible. Customers who complain and have their concern quickly and reasonably addressed may actually be more satisfied than those who never have complained at all. Tip: Contented complainers are ideal candidates to ask for referrals, although not during the actual resolution of their concern.
Discover missing coverages and make extra sales. Example: Several agency insureds who are involved in collisions complain that they weren’t told about rental reimbursement coverage and must pay to rent a car themselves. The agency has uncovered, and must remedy, the sales and communications problems that initiated these complaints. As a bonus, the agency has also discovered a marketing opportunity. Cite these actual claims (anonymously) in a point-of-purchase sales memo to auto clients who don’t carry rental reimbursement. Explain why this option is so important. Present a premium estimate for the coverage. Provide a postpaid envelope and option order form, with room for your insured’s approving signature. Include a CSR’s phone number and the URL of an explanatory Web page in case there are questions.
Complaints can document a carrier’s shortcomings. Sometimes the root cause for an insured’s complaint isn’t your office; it’s the insurer. Yet, the agent is the one who has to take the blame and manage the problem. One way to deal with this issue is to maintain a cumulative record of company complaints, then present them at the right time to the insurer. This data can also help the carrier improve its own operations. Used judiciously, it may also serve as a “get out of jail free card” to help forgive some small problem caused by the agency.
Recover lost business. If a known grievance caused the loss of an account, there is a solid shot at getting it back. This is another good reason to maintain a complaint database. With access to inside knowledge about the former insured’s concern, an agency can tailor a resolicitation to the precise reason the person left in the first place. Often people do want to come back, but are hesitant, and are secretly hoping to be asked. Send a carefully crafted resolicitation letter, memo, or a more creative device to each lost insured. Follow up with a phone call, when permitted by the FTC’s Do Not Call regulations.
Know which CSRs and producers need more training. Regular complaints about the same individual are an easy tip-off that someone needs extra education or supervision.
Principals must never automatically assume that the complaining party is always correct and the agency staffer is mistaken. If the customer was always right, premiums would go down by half every year and every claim would be instantly paid. Instead, management needs to allow its people to make minor mistakes and take the needed actions to correct them. Careful record keeping of every gripe should be maintained to spot trends, to provide market research, and to help train agency personnel. As with anything operational, the tone is set by upper management and enforced at the supervisory level. Misunderstandings are a natural part of the intangible known as insurance, and handled correctly, they can actually help improve an agency’s procedures, retention, and more.
Alan Shulman, CPCU, is the publisher of Agency Ideas, a subscription-only sales and marketing newsletter. He is also the author of the 1001 Agency Ideas book series and other popular P/C sales resources. He may be reached at (800) 724-1435, email@example.com,
or visit: www.agencyideas.com.