How many times have I asked this question: ‘What makes your insurance agency different and better than the alternative?’ How many times did the answer come back, at least in part, something like this: ‘ We provide superior personal service.’ I don’t know the how often the foregoing question has been asked, but it’s a big number, and most often the ‘we provide great service’ has been a component in the answer. But do we really offer great service or is it just good enough to be better than the consumer’s most recent dissatisfaction?
In my past, I worked for a company that, like all businesses, had to grapple with budget, skill and time constraints. In any project, it seemed we could never deliver excellence. And we had good, talented people working on these projects. A running joke within our project teams went something like this: ‘We suck. But so does our competition. In order to win, we just have to suck less.’ It was an inside joke but it based on the reality of our experiences. It also betrayed a common mistake we make when deciding who we want to be and what we want to deliver – we leave what the customer wants and thinks out of the equation.
How you want your agency to be perceived, and how it is actually perceived by others, is your brand gap. Since brand encompasses several things such as name, logo, communications, product, service and people and what you stand for, it can be a challenge to actually measure that gap. But a good starting point is to gauge service satisfaction, something that can be accomplished with simple surveys.
How does your brand measure up? Start by asking how your service measures up.
Confluency Solutions’ hosted insurance agency websites include a survey that is emailed to a consumer whenever a quote or service request is submitted through an insurance agency website.* The survey, called the Insurance Service Report Card, asks just five simple questions:
- Have we clearly explained or offered to explain your insurance protection to you?
- Was your request fulfilled in a timely, professional manner?
- Did you find the program or policy quote we provided to be competitive and a good value for the level of protection and peace of mind?
- How would you rate your overall experience with our insurance agency?
- Would you be comfortable referring a friend or family member to us for their insurance needs?
Each question has two or three possible answers, with responses ranging from extremely positive to very dissatisfied. Confluency recently reviewed over 2,700 responses submitted to about 160 different insurance agencies and compiled scores based on actual answers as compared to the best possible answers. Here’s how the score distribution breaks down:
Grade Score Range Percent of Agencies
A 90% – 100% 14%
B 80% – 89% 22%
C 70% – 79% 24%
D 60% – 69% 18%
F below 60% 22%
You have to ask if there are external factors affecting satisfaction, such as volatility in the marketplace accompanied by large rate increases and negative underwriting action. But that seems not to be the case, as the A group of agents are situated in much the same regulatory environments as the F group.
There was a mix of large and small agencies within the A and B group, but no agencies with more than 30 employees. The D and F groups had a similar mix of agency sizes; however each included a few agencies with over 30 employees. So if it isn’t size or location that creates differences in consumer satisfaction, what is it?
Not surprisingly, the A group tend to have more regular, proactive communication with their clients. That communication usually includes some kind of print or e-newsletter and consistent offers to perform annual reviews. Several of the A group also have large Facebook networks with regular postings of other than hardcore insurance content. The same cannot be said for agents in the F group. Again, this is not surprising, data compiled over the years draws a strong correlation between regular communication and customer satisfaction – and it should be noted – high retention, account development and referral rates. It’s just that the communication channels are a little different today than in years gone by.
There are no absolutes within the A and F groups. Rather, there are what I would call commonalities. Commonalities within the A group have already been noted. There is one commonality within the F group that I think is significant, though I admit to a bit of conjecture in this. Several of the F group included agencies that are commercial lines focused and tend to have outside producers.
70% – 75% of website quote and service requests are related to personal insurance and small business insurance. Mid-sized and large commercial accounts are usually handled differently, with more face-to-face and phone communications. When the revenue stream for personal insurance is less important it seems to be less likely that agency management has proactive communication processes in place for those clients. In a sense, there are two tracks for service – and satisfaction – the one delivered by individual producers (good or bad) and the one delivered by the ‘agency’.
What to make of all this? In this survey, only 36% of insurance agents get a grade of A or B. And these are agencies that have put some effort into providing broader service options. I don’t think this data set is necessarily representative of the independent insurance agency universe – I think the A/B group is probably a smaller proportion than the 36% suggested in this sample. Those agencies have a good story to tell and can quantify their value proposition, for example, ‘Our customer satisfaction is 96%’ vs. ‘We provide great service.’ The first value proposition has more teeth and there is data that suggests quantifiable value propositions motivates consumers to action, never mind the correlation between client satisfaction and agency profitability.
Those agencies in the C, D and F groups need find out why customers are unhappy. Is it one employee? Or maybe it is a raft of problems created by one or two of your carriers? Step one is identifying dissatisfaction, step two is identifying the cause, step three is correcting the situation – and bridging the gap. And if you don’t know which group your agency falls into, it’s easy to find out. Just ask your customers.
* You can test drive the survey here: http://demo.cfluent.com/survey/agency-report-card