*My name is Susan Young and I am Doug Brown's publicist. If you have any questions, please feel free to call me at 732-613-4790.* (Do not include this in this article)As someone who has been heavily involved facilitating strategic planning processes with organizations during
last 15+ years, I often find it somewhat amusing how people answer questions I pose.
For example, if I ask people, “What is your unique differentiation in marketplace?” or “What does your organization really excel at?” They will almost always reply, “It has to be our client service.” Almost no one will admit to being “lousy” in client service, any more than they will talk about living in an average town with average kids. Instead I see “Lake Woebegone Syndrome.” In Lake Woebegone it seems all women are pretty, all men are handsome, and all kids are well above average.
If while getting to know someone’s agency or company, I ask question, “If I hauled you into a court of law and accused you of being a ‘world class’ client service provider, would there be enough evidence to convict you?” Many times, unfortunately, their answer is, “Probably not.”
Therefore, if so many people think client service and satisfaction is so critical to success of vision and execution of strategic plan, why is it not usually monitored with same intensity as financials? After all, financials are a lagging indicator (telling what happened after fact) while client satisfaction may be a leading indicator (it can be predicting what may happen in future).
Many organizations go through all sorts of trial and error and purchase various software programs to keep their finger on pulse of dollars and cents because they want to know where they are and minimize opportunity for loss. For years it has been known that “what gets measured gets done.”
If that is case, why is it that many organizations choose to almost ignore measuring client satisfaction? By doing so, they run risk of losing established clients to competition.
Client Service as Overarching Philosophy In 1960, Professor Theodore Leavitt wrote groundbreaking article, “Marketing Myopia,” in Harvard Business Review. To paraphrase, he basically concluded that purpose of all business is to attract and maintain customers while generating adequate profitability today and improved profitability in future. That balancing act still holds true today. How many organizations do you know that are masters at bringing business in front door only to lose it out back door just as quickly? We have also dealt with organizations that service their existing business so well that owners and principals “never get around to developing new business.”
Those organizations and agencies that see customer or client service as simply a department to be managed rather than a point of strategic differentiation may be looking at business through lens of short-term focus. So many people that we talk with have never calculated lifetime value of a typical insured and even those that have usually aren’t communicating that number to their staff at every level of organization on a regular basis. Knowing that number can provide a framework to make decisions for long haul and maintain client relationship rather than looking at it from a “transactional” basis.
To calculate lifetime value, take number of years that a client/insured usually stays with agency multiplied by estimated net profit per line of business (auto, P&C, E&O, DB, etc). The total dollars can give you some idea of what is at risk in future if you under serve your client base.
For example, if a typical insured stays with your agency 15 years and has 3 different policies with you each generating $200/year in profit, each new insured is worth approximately $9000 going forward (15yrs x $200/policy x 3 policies = $9000) if they are treated so well that they won’t even consider moving to someone else. Now ask yourself, how cavalierly would you treat a check written to your agency for $9000? Would you do equivalent of going into your back yard, digging a hole, burying it there and walking away from it forever? In essence that is what happens when clients are taken for granted. The cause can either be by default ie. not paying attention, understaffing by design, allowing a lack of systemic follow-up and follow-through, or it can be attributed to a management team with so strong a focus on short-term results that they become almost greedy. Does your organization have a client service strategy? If you examine your strategic plan, it’s necessary to differentiate agency strategy and plan from client service strategy. They are not identical. Organizations need to implement a “Client Bill of Rights.”
