Creating a Customer-Driven Organization“Brutal price competition is here to stay. Winning means giving customers all of what they’ll pay for--and none of what they won’t.” Statford Sherman, Forbes Magazine.
Managing the customer’s perception of service quality is the single most important issue in determining long-term profitability for an organization. Agencies must provide value for the client’s insurance dollar--and they must do it as efficiently and effectively as possible. The value of products and service provided is determined totally by the customer’s perception and what the customer determines to be fair market value. How well are we delivering on what the customer wants and needs? Unfortunately, the insurance industry in general receives very low customer satisfaction scores. According to the Quality Insurance Congress’ survey, The Voice of the Customer, only 23% of small business customers give the industry excellent or very good ratings. This compares to 48% averaged by other financial services companies. Other service industries average 43%. Obviously, there is significant room for improvement in the independent agency system--improvement that can only come about through being a customer-driven organization. Shifting to a customer-driven organization often requires a fundamental shift in the agency culture, and an agency-wide commitment. It is not necessarily easy. It takes constant, positive communication and reinforcement from top leadership within the agency to keep everyone on the team focused on the customer. There are several key steps to effectively develop and manage a customer-driven organization:  | Determine what your targeted customers value. A recent study by the Independent Insurance Agents of America found that 87% of consumers want 24-hour service; however, only a third of the agents consider this level of service to be critical. Conversely, only 8% of consumers cite "choice" as a reason for buying from an independent agency, while 40% of the agents surveyed thought choice was a high priority. We need to close that gulf between what the customer really wants and the we think they want. |
Ask all your customers--current customers, lost customers and potential customers. Solicit their input. Don't assume that you know. An effective, on-going customer feedback system is a valuable tool to improve customer service and build your agency's customer relationships.
| Create an agency-wide obsession with customer focus. The entire agency must be dedicated to managing the customer's moment of truth. Employ a unified agency approach to serving customers. Don't think of the customer as just another part of the business. Recognize that the customer is the core of the business. Let the customer drive the organization. |
| Establish service standards. Develop benchmarks which can be monitored and continuously improved. These goals should be specific, measurable and realistic. Obtain staff input on these standards in order to obtain their buy on. Tie the organization’s service standards to your customer’s expectations--and perceptions. Make customer satisfaction based performance standards a part of the overall performance review and compensation program. |
A business that clearly understands who their customers are and what they value makes better business decisions than a business that is solely concerned with short-term budget objectives. Focusing on the things that your customers and prospects really value will maximize your agency’s profitably. | 