ACG - Agency Consulting Group

The PIPELINE

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

Concepts of Producer Compensation

If we asked 100 CSRs (and we have) to rate themselves in terms of quality of work (Do you make a lot of errors?), quantity of work (Do you handle as many transactions as you should each week?) and customer care (Are you courteous, understanding and helpful to customers?) the overwhelming response is a high rating (in the mid-90’s out of a possible 100). Yet statistics continue to show that customers are leaving agencies because of mistreatment, lack of follow-through and lack of attention.

Are the customers wrong in their perceptions of the insurance agencies or are the CSRs wrong in their self-perception? Error rates can be determined through diligent management. How many billing transactions are being done for each policy handled in a month? Over 1.2 or 1.3 indicated error problems. Volume of work is also achievable by management reporting (see our articles on Management Information Systems or call us for copies). Level of customer care is subjective. But the customers do tell you how well they like your service – with their feet (as they walk out the door). If it feels as if a division of soldiers was on the march out of the agency every month – you probably have a problem. Realistically, if you consistently lose more clients than you gain, your problem is serious.

Whether wrong or right, the customer’s perception of your service quality is the one that counts because they vote with their money. They will do business with the agency with whom it is easiest to do business (even if it is not the least expensive). We often hear about customers leaving agencies because of a price difference. What we don’t hear is that customer’s perception of the treatment that (s)he received from the agency that they left.

We have done exit interviews with departing customers when the reason was ‘left for lower price’ and we found that the answers about their departure were eerily similar. The client invariably said that the service wasn’t all that good to begin with and when they were offered a better price as well, they figured, “what do I have to lose?”

We did not get a single departed client who said that they were getting excellent service but that they left for a lower service agency to save money. Even when they were not getting “poor” service from their former agent, the attitude was that all agents serviced the same way, so leaving for a better price made sense. The “Loyalty Factor” was missing.

The Loyalty Factor is established when you surprise the client with your service attitude.

The Loyalty Factor begins with the simplest of all activities --- ANSWER THE PHONE WHEN IT RINGS! The customer who is calling is not doing so because they enjoy calling their insurance agent – they need something done. I am constantly shocked by the number of insurance agencies (most of who claim to be excellent service organizations) that have Busy Rates (calls that go to voice mail or messages) in excess of 30%. That means that ONE OUT OF EVERY THREE CALLERS CANNOT SPEAK TO YOU WHEN THEY WISH. Imagine for a moment that you were on the receiving end of that kind of service. You would be looking for a new agent, as well. Excellent service agencies rarely have busy rates above 10%.

The Loyalty Factor is activated simply by answering the phone on the first ring every time with a pleasant attitude. Don’t answer with your name alone – if they are calling you, they already know your name – if they are not calling you specifically the better way of answering is “Good Morning (or Afternoon), this is Al Diamond...How can I help you?”. Make that your script – put it on the wall next to your telephone – use the same line every time – AND SMILE WHEN YOU PICK UP THE PHONE, PARTNER! Haven’t you ever experienced a pleasant voice on the other end of the phone, knowing that the person is in a good mood and must be smiling (as if (s)he were picking up a call from their best friend)? Be that person every time you answer the phone.

The Loyalty Factor is developed when you prove that you actually mean it when you ask, “How may I help you?” IF YOU CAN HELP THE PERSON TO CONCLUSION WHILE THE PERSON IS ON THE PHONE, YOU HAVE SUCCEEDED IN PROVING THAT YOU ARE THERE TO HELP THE CUSTOMER. Keep a count of the number of times you tell a customer, “Let me research that and I’ll get back to you?” Believe it or not, many customers feel that you are just getting them off the phone and unless they keep bugging you, you will NOT get back to them. And, in many cases, those customers appear to be correct. We as a service industry are terrible at communicating with our customers EVEN WHEN WE ACTUALLY DO WHAT’S ASKED. Since we are so busy, we will respond to the customer’s issue then simply forget to call and tell the customer that you have done so. We feel good that we did the requested activity at the same time that the customer feels that we have not accomplished the requested task. IF YOU MUST DELAY THE CONCLUSION OF THE TRANSACTION UNTIL AFTER THE CALL, REMEMBER TO TELL THE CUSTOMER WHEN HIS/HER REQUEST HAS BEEN CONCLUDED SUCCESSFULLY!

Far too often, CSRs get so bogged down in paperwork that they look at the phone call as an interruption instead of as their reason for being on the job. When you answer the phone in a distracted manner, the customer certainly senses that. When you “busy out” the phone or let the call go to voice mail, you cause frustration in your customers. This is NEVER a good thing. The Loyalty Factor is reinforced when calls overflow from one CSR to another so the customer is always given a chance to speak to a human being who can help him/her. Voice mail is sometimes important when the customer desires to leave a message for the employee to whom they wish to speak. It is NEVER productive when the only thing left on the voice mail is, “Have Al call me”. Some agencies have calls rotated from one CSR to another and, if all CSRs are occupied or unavailable, calls go to managers and, if all are occupied, continue to rotate right up to the agency President. Those agencies have a rigid service philosophy. They know that they work for the customers and that the most important thing they can do is to answer the call and help the customer.

Customers who have the Loyalty Factor do NOT leave the agency. As a matter of fact, they do not even shop their insurance. They know that extraordinary service is unusual and, once they find someone who delivers it, they guard their relationship jealously.

HOW TO CREATE THE LOYALTY FACTOR IN YOUR AGENCY

1. ANSWER THE PHONE WHEN IT RINGS – EVERY TIME

2. SMILE WHEN YOU ANSWER THE PHONE AND BE NICE

3. CONCLUDE 75% OF YOUR TRANSACTIONS WHILE THE CUSTOMER IS ON THE PHONE.

4. WHEN YOU MUST DELAY THE TRANSACTION UNTIL AFTER THE CALL, COMMUNICATE TO THE CUSTOMER WHEN THE SITUATION IS RESOLVED.

5. IF THE CSR IS UNAVAILABLE, HAVE THE CALL ANSWERED BY ANOTHER CSR OR BY A MANAGER – HELP THE CUSTOMER WHEN HE CALLS.