Every year, the insurance products that we sell and the insurance products that are sold by our competitors become more equivalent. They are nearly the same in price and nearly the same in product scope. For a generation, we have trained our customers well to consider price the greatest differentiation in insurance products. But if price is all we have to sell, our next sale should be that of our insurance agency before its asset value disappears completely.
If we look outside of our industry, we find others in similar situations. What’s the difference between one auto dealer and another? They may sell exactly the same product line, in the same marketing area, from the same manufacturer- but some go out of business while others thrive. Why do the national payroll processing companies do well against local competitors in some areas and poorly in others?
The answer is both easy and complex. It’s easy because it’s so apparent. It is the people and the culture of the company that determines its success. However, this answer is difficult because a change of culture is much more difficult than any other change in a business.
Most companies claim to be service oriented. Everyone “says” that their people are their greatest resource. Everyone “claims” that their customers are king. But how often do we, as consumers, realize that the service and quality initiatives that are publicized by a company is only lip service?- another marketing tool to make customers believe that they’re special?
The cultural shift to a service and quality culture requires inherent changes in the way we do business. These changes can only be accomplished through the dedication, acceptance, and pro-active implementation of the owners of the business. That’s where the breakdown normally occurs. It’s been very easy for agency owners to say that service is our point of differentiation. What they mean is that service is our point of differentiation – as long as I don’t have to change to do it.
The greatest point of cultural change to differentiate your agency from that of all of your competitors is to change from a vertically managed organization to a horizontally managed organization. In its extreme fashion, this would mean that every person who touched the customer would have the authority to make any decisions affecting that customer (using their best judgement) without having to go to management for approval.
Of course any organization would be foolish to implement this type of change without having high quality service employees.
Do you remember that other well used cliche, “Our employees are our most important asset?” In horizontal organizations with a service culture, this cliche is actually the truth. Building this type of organization can only be done over time. First, the owners must stop referring to and using the service staff as “support staff”. Support staff typically responds to and supports the activities of owners and producers. Service staff responds to and supports the needs of customers. Producers (and owners) often have strong egos and feel that they control the customers. In reality, customers are only “controlled” when they feel that their needs could not be met as efficiently anywhere else but in your agency. This has more to do with how their treated on a day to day basis than it does with how they’re marketed for renewals.
In order to establish a horizontal, customer-oriented culture, you must first delegate both authority and responsibility to the service staff. Standard operating procedures (that which we can do ninety percent of the time to satisfy our customers under normal circumstances) is easy. It’s the non-standard procedures that can be quickly and efficiently decided by direct service staff or must be referred to management for handling that truly differentiates insurance agencies. If you already have trusted, confident employees, you must assure them that making decisions with respect to customer problems will not endanger their job security. Most times those decisions will be the same as yours. However, sometimes they will not. Just as you and I will make mistakes on occasion, so will your service representatives. However, if those mistakes were made in the attempt to properly service customers, you should correct them, explain how the service person should have handled the situation, and let that service person go about their business.
Remember, providing authority and responsibility to service representatives does not abrogate your right and requirement to manage the process. We are not advocating anarchy. What we’re suggesting is that if you do not have properly trained employees, you must train them or replace them. If you do have confident employees, you can imbue your company with a true service and quality culture if you allow them to perform the jobs for which they’ve been hired and serve the customers properly and efficiently without further intervention from management.