Do you remember the last time you received really great or really bad customer service? Think about those interactions. How did they make you feel about the company? Were you more or less likely to stay with the company? Would you tell others about your experience? Would you recommend the company?
It is well established that customer satisfaction is a leading indicator of future sales. And it stands to reason. Satisfied customers are more likely to stay with you, spend more money and promote your company. The J.D. Power and Assocs. 2010 U.S. Insurance Shopping Study found that past service quality experience plays a “considerable role” in customer retention.
According to the Word of Mouth Marketing Assn., people have a “natural desire to share their experiences with family, friends and colleagues.” J.D. Power reinforces this point in its 2007 Homeowners Insurance Study, which found that satisfied customers report a much higher intent to both renew and recommend to friends. By providing excellent customer service, you provide positive experiences for customers to share.
However, even the best agencies and brokerages can lose sight of service. Especially in a down economy, they're naturally tempted to focus on parts of the business that contribute most visibly to the top line: marketing and production. Although those functions are critical to your business and must be developed, once the policy is bound, customer service plays a critical role of keeping the customer that marketing and production worked so hard to find.
Read Anita Bourke's previous Sounding Board column, “Talent for the 21st Century.”
The J.D. Power 2007 Homeowners Insurance Study confirmed that negative perceptions of insurance are strongly linked to “lack of timeliness in resolving customer issues.” Another J.D. Power study of auto insurance customers found that Gen Y customers (the single largest generation, born 1977 to 1994) are particularly critical of insurance providers whose personnel do not provide clear policy explanations.
The message behind these results is clear: Customers evaluate every interaction with your agency or brokerage. Each interaction that delivers an excellent customer experience, increases the likelihood that you will not only retain a customer, but gain customers through referrals. To deliver the excellent service that today's insurance customer demands requires knowledgeable staff who can answer detailed technical insurance questions while delivering efficient and timely service.
With all this in mind, go back to the first paragraph and ask those same questions about your organization. What are your customers saying about you? Do you like the answer? If not, an investment in the skills and technical insurance knowledge of your customer service professionals can help you increase customer satisfaction and retention.
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