ACG - Agency Consulting Group

The PIPELINE

A national monthly newsletter for agency principals dedicated to agency management topic

Total Quality Management - Part 04: Listen to Your Customers

Tom Peters said, "Perception is all there is. There is no reality. There is only perceived reality."

While this concept is somewhat esoteric, there is a great deal of truth in the statement. You could be out-performing yourself every day. But if your boss doesn't agree, you will not get far. Similarly, if your customers don't share your confidence in your agency's ability to efficiently and effectively serve their insurance needs, you will most certainly lose more than your share to competition.

So, how do we approach this "Perception" problem?

Traditionally, you, as an agency owner, alone (or with a select group of key players -- most of whom think like you do) create service and marketing plans designed to impress the customers. The only problem is that no one told the customer that he should be impressed.

The independent insurance agent begins the process of attaining excellence from his own standpoint instead of from the customers' - and he wonders why great ideas and good intentions often don't work as well as the role models from whom the ideas were taken.

Let's go back and begin this process by looking at the steps to attaining an enhanced perception by your clients:

1. Ask the customers what they would like to see happen in order to consider you the "best" servicing agent possible.

2. Implement what the customers have suggested.

3. Tell the customers what you are doing - while you are making the changes.

4. Measure your results and publish them to your customers.

5. Go back to Step 1 and do it again. Customers' needs and perceptions are not fixed. They are moving targets. By the time you complete the changes that will satisfy your customers, their sights will rise.

Many agents feel that asking customers for their input regarding the operation of the agency is a sign of weakness -- if the customer thinks you don't know how to satisfy his needs, why should he stay with you? Well, the Fortune 500 companies all disagree with you ! Each of these companies spend more than most agencies generate (in premium) in Customer Satisfaction Surveys and Focus Groups to involve the customer in the marketing and product and service development of the company. Why? Because in competitive industries, a service strategy mistake resulting in failing to meet customers perceived needs can lose thousands of customers. The insurance agency industry, insulated from competition for 150 years is now growing so competitive that failing to meet customers' perceived needs can result in an agency's business failure. And customers who care enough to participate in satisfaction surveys and focus groups are the loyal customers who, if you satisfy their needs, will stay with you in the face of competition.

While meeting the customers needs is the one obvious key to success, it is terribly important to realize that seemingly trivial issues and minor details cause customers to make sweeping conclusions about the agency's service. An airline executive once made this observation to his staff - " Coffee stains on the flip-down trays mean that we do our engine maintenance wrong." This statement is neither logical or true. But how many times have you made assumptions about a restaurant by a quick observation of its cleanliness? Have you ever refused to shop in a store that had the appearance of disorganization and clutter? Now -- what does your agency look like to the first time visitor? What type of impression will a customer get the first time he calls your business? Is your correspondence professional looking (and free of errors)? Is the attitude of your staff always what you would like to see if you were a new customer to your agency?

Just as dirty flip-down trays are not equivalent to poor engine maintenance, messy offices and inefficient employees don't mean that your insurance programs are not up to par. However, it's perception that gets and keeps customers. Either evaluate your operational details from the standpoint of your customer or let your customers evaluate those details. While many will not know if the quality of their coverage and price of insurance is fair, they will all know if they are treated cordially and made to feel needed and appreciated when they call for service. They will also not hesitate to tell you if they feel that your agency does not look as professional as it should. If your ego can stand the strain, making your customers your evaluators will strengthen the real and perceived service levels of your agency.