OTHER PAGE

It Pays to Be a Bad Customer

When I consult with agencies, I spend a lot of time with CSRs, claims personnel, marketing personnel, and the accounting and/or bookkeeping staff. I always ask one question: "Who do you spend more time with, the good customer or the bad/problem customer?" The answer is always, "The bad/problem customer." Why is that? There are several reasons....

Reason #1: Our agency has to be all things to all people.

You can't and you are foolish to try. Just as paying more attention to the bad employee and not the good employee encourages mediocrity in your agency, paying more attention to the bad/problem customer develops into mediocre customer service for all clients. It's time to fire the 1% to 2% of your customers that are using up the precious customer service time of your employees and not favoring you with sufficient commission dollars. There are other options you can also consider. You can place the difficult customers in a service center or outright sell the clients to another agent. Remember, you're in business to make a profit, not to provide insurance for every individual or business in your community.

Just ask your employees, "Which clients are your time wasters?" You can also take a hard look at those customers that are generating less than $50 of commission per year. Refer these individuals and businesses to your number one competitor and let them occupy the time of your rivals. Time is your most valuable asset. However, it's nonrenewable. Once it's spent, it's gone forever. Spend that time with your good customers. It will increase your retention and increase your profits.

Reason #2: Processing has become customer service in the minds of the employees.

I find many CSRs who can't wait to get off the phone so that they can return to customer service. That's right. There's no time for delivering on your promises of "Great Customer Service" because of the time it takes to process all the paper. There should be a balance between proactive and reactive customer service. This can only be attained by reducing the time wasters in your office. Many agencies and brokerages have found that by adopting E-Filing (click here to learn more) they can spend more time doing annual account reviews, claims follow-up, cross-selling, etc.

Reason #3: Most agencies treat all customers alike.

Very few agencies have established a differentiation of service between the VIPs and the remainder of the customers. Specific procedures should be established in personal lines for the VIP. This should include annual face-to-face reviews of exposures and needs. It can also include seminars on Long Term Care and investments.

Commercial clients should be recognized as "Exception" and "Non-Exception" accounts. By definition, the "Exception" commercial accounts are those that contribute at least 50% of the agency's income. Every agency should develop a program of additional services that they will provide these accounts.

If your independent agency is to compete with the mega-online insurance purveyors, the banks and the company direct programs available to customers today, you must provide exemplary customer service to the clients that pay for it and deserve it.