Competitive pricing depends heavily on the overall operational performance of your department and the accuracy of loss reserves and both loss and expense payments, all things that require technical know-how to do well. Think holistically about your role. Asking yourself if customers understood the financial ramifications of paying more than what's fair and owed on claims, as well as if they find value in our doing so will help you understand why paying the correct, honest, fair amount is important to all policyholders and not just the one at hand.

In terms of the immediate customer experience, knowledge also means quite a bit. Customers don't know a lot about claim processes, damages, lawsuits, and so on. Many an adjuster overlooks his or her own knowledge and experience and assumes that customers don't care. Well, they do care. This is why I recommend that when handling claims, adjusters calm customers down by not only mentioning their experience levels but also assuring them that everything will be done to make the process smooth. Knowledge increases customer confidence, so hand it over.

Soft Skills Matter, Too

The difference between doing "good" versus "great" often hinges on the development of soft skills as a requirement in the claim organization. In claims, everything can be done correctly from a technical standpoint, but if along the way the adjuster seemed disconnected or uncaring, then the entire claim experience might still end up being perceived as negative, impeding the chance for renewal and advocacy.

Anything technical can be learned and applied, and this is the same with soft skills. The difference is that soft skills are invisible and involve habits. This means that where technical skills are learned from scratch, soft skills often involve unlearning some habits and replacing them with others. Quite often, soft skill improvement enhances an individual's ability to manage conflict beyond the office as well as within the scope of the job at hand.

The Root Cause Not at Bayonet Level

Let's face it: insurance is all about solving problems for customers. Yet it's amazing that so many insurers struggle with solving their own problems. During my time within the claim ranks, I heard a lot of lip service about customer service. I attended the training that set an expectation for me to rush to the phone and answer with a smile. I even attended some really great training that taught me how to handle conflict and make the most out of difficult situations. What has been most interesting to me, however, is that the overwhelming responsibility of delivering the claim experience rested with the front line. That's a relatively ignorant view of reality.

Truth be told, the execution of a claim product involves a stream of processes and activities between a customer's demand and the actual delivery. In manufacturing they label this "lead time," and this concept applies to each process in service organizations as well. Great companies become adept at viewing that chain of processes from the customer's standpoint and then find ways to either improve speed or quality.

To learn more about the process of drawing a present state value stream map; identifying root causes of waste (as defined by the customer); and developing a future state value stream map, read "Learning to See," a book published by the Lean Enterprise Institute. The moment of truth for your organization will not be in the actual finding of waste -- which will surely happen -- but in what you do with the resources currently committed to wasteful work. Truly great companies understand that ongoing pursuit of waste will not occur if employees don't feel respected. Losing your job shouldn't be the result of improvements you helped bring about. On the contrary, employees' efforts should be directed at growing the company.

If employees aren't feeling respected, then the root cause may indeed be the company's culture. Leaders are responsible for culture and must examine handling processes and decisions in alignment with what customers want, with an understanding of the customers themselves. Great companies have great alignment with customer.

Satisfaction Doesn't Work

How can we know whether our efforts are properly directed when we don't ask the customer how we're doing? Moreover, how can satisfaction surveys offer us the best guidance when research shows that as much as 80 percent of customers who defect do so even after feeling either "satisfied" or "very satisfied" with the services received by their providers? Could the root cause of a company's inability to achieve greatness be in its failure to understand what customers really want?

About 6 years ago, 15 years into my claim career, my then employer asked me to improve customer retention. Lowering our prices, of course, wasn't the answer. I spent six years learning about the drivers of superior retention and customer loyalty in the insurance business and arrived at some pretty specific conclusions about what companies can do today to impact loyalty for success in the future.

My findings show that companies would be doing themselves a favor by measuring customer sentiment using something called the Net Promoter(R) Score (NPS), which requires the simple question, "Will you recommend us to family, friends and colleagues?" The responses from customers are categorized into detractors, passives, and promoters. Once that's done, the percentage of promoters minus the percentage of detractors equals your "Net Promoter(R) Score." For more about the Net Promoter Score, read "The Ultimate Question," by Fred Reichheld, or visit www.netpromoter.com.

Your goal, as an individual and an organization, is to improve your score by increasing the number of promoters and decreasing the number of detractors. It's that simple, right? Not really. While change is hard work, it is much easier when the customers are in charge rather than someone who tries to speak on their behalf, including bosses, co-workers, or you. NPS brings clarity, allowing your claim department to determine the projects and processes that require improvement. It also makes results measureable.

When I Googled "culture," I got 55,000,000 hits. The best definition I've ever heard is this: "The way we do things around here." My experience in claims and with overall customer loyalty in insurance has led me to believe that 'culture' is the root cause of both success and failure in our business...and probably any other business for that matter.

When we break the "what we do around here," we see that there are really only three things involved: people (employees), customers, and the processes and activities between the two. The company or department that wins is one that is serious about building employee knowledge (both technical and soft), fostering engagement, and continuously improving processes on behalf of customers with a focus on creating more "promoters."

After two decades within insurance operations, Bernard (Bernie) Rosauer left the industry to help lead the insurance practice Satmetrix, The Net Promoter Company. Rosauer specializes in helping insurers maximize organic growth efforts and has established himself as a thought leader in the area of customer retention, customer loyalty, and operational effectiveness in the insurance space. He can be reached at 646.675.7000.

Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld