Client Service as a Competitive Advantage

As someone who has been heavily involved facilitating strategic planning processes with organizations during the last 15+ years, I often find it somewhat amusing how people answer the questions I pose.

For example, if I ask people, "What is your unique differentiation in the 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 the "Lake Woebegone Syndrome." In Lake Woebegone it seems all the women are pretty, all the men are handsome, and all the kids are well above average.

If while getting to know someone's agency or company, I ask the 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 the success of the vision and the execution of the strategic plan, why is it not usually monitored with the same intensity as the financials? After all, financials are a lagging indicator (telling what happened after the fact) while client satisfaction may be a leading indicator (it can be predicting what may happen in the future).

Many organizations go through all sorts of trial and error and purchase various software programs to keep their finger on the 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 the case, why is it that many organizations choose to almost ignore measuring client satisfaction? By doing so, they run the risk of losing established clients to the competition.

Client Service as Overarching Philosophy In 1960, Professor Theodore Leavitt wrote the groundbreaking article, "Marketing Myopia," in the Harvard Business Review. To paraphrase, he basically concluded that the purpose of all business is to attract and maintain customers while generating adequate profitability today and improved profitability in the future. That balancing act still holds true today. How many organizations do you know that are masters at bringing business in the front door only to lose it out the back door just as quickly? We have also dealt with organizations that service their existing business so well that the 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 the business through the lens of short-term focus. So many people that we talk with have never calculated the lifetime value of a typical insured and even those that have usually aren't communicating that number to their staff at every level of the organization on a regular basis. Knowing that number can provide a framework to make decisions for the long haul and maintain the client relationship rather than looking at it from a "transactional" basis.

To calculate the lifetime value, take the number of years that a client/insured usually stays with the agency multiplied by the 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 the 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 the 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 the agency strategy and plan from the client service strategy. They are not identical. Organizations need to implement a "Client Bill of Rights."

Leaders in organizations need to ask themselves if they are willing to pay the price for excellent client service vs. good client service. Excellence costs, but it also pays off. Being even a little better than the competitor pays huge dividends. Yet many organizations are not willing to pay that price. Instead they are content with processes, technology and staff who are "good enough."

As mentioned before, "what gets measured, gets done." Client expectation measurements are important as are ways to monitor them. It is necessary for organizations to take the time to discover why a client has signed on with you and not the competition. It's also necessary to determine what they really want to have happen as part of the client experience. It is then up to you to make sure you are delivering what your client wants. Failure to do so most likely will result in the loss of that client to your competitor.

Once you determine what it is your client really desires, make sure you match those expectations in terms of pricing and service. Make sure you are not trying to sell a champagne policy to someone with a beer budget and vice versa. It's necessary to have processes in place to support excellent client service from beginning to end. That is, do you have the right amount of staffing resources to meet their needs? Make it as easy as possible for them to conduct business with you.

While having the proper talent is vital to ensuring excellence in client service, it is also known that 94% of failings are the result of process/system failures and not people failures.

My car recently broke down. While it was being towed to the dealer, the towing company damaged another part of the car. The dealer was willing to go ahead and fix the damage, but the towing company wanted the damage they caused handled by their insurance carrier. They had a local agent connected to an insurance company in Arizona. The problem was that the local agent did not have the necessary claim number or phone number for the agent handling the claim in Arizona. Therefore, the dealer, who was willing and able to fix the car, didn't have the information they needed to work with the towing company. As a result, repairs that could have been completed in 48 hours took four to six weeks.

The problem was that no one owned the entire client experience, each company only owned a piece of it. Anytime there is an opportunity for a hand-off where something can go wrong, organizations often rely on the client, who has no knowledge of the situation, to be able to handle the details. It is vital for organizations to own the entire client experience.

Of course, no matter what the situation is, things don't always go smoothly. Problems arise, that's why organizations should make sure they have a process in place for "service recovery." That is, if something goes wrong suddenly, they should be able to recover with minimal damage.

Finally, organizations should make sure their policies protect the right people. Often, they have policies in place that protect themselves against the 1% of clients who abuse the system. This makes the other 99% of their clients who play by the rules pay the price. Many organizations, unfortunately, don't look at what they are doing through the eyes of the customers. Rather, they only are looking to protect themselves.

Excellent customer service demands a price. Are you willing to pay it?

Doug Brown is the CEO and Chairman of Paradigm Associates LLC, a strategic and executive leadership development firm based in Cranford, NJ. He combines an innovative thinking style with his conversational questioning ability to help organizations recognize and breakthrough their existing paradigms. This naturally leads them to solve stubborn problems and work through difficult situations. A Certified Facilitator for the Total Quality Institute (TQI), Brown understands the distinction between simply conducting "training sessions" and facilitating meetings with potentially complex subject matter.

Visit http://www.ParadigmAssociates.US or call (908) 276-4547.

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Google News Updated : Fri, 04 Jul 2008 18:53:55 GMT Mosquito disease risk isn’t higher - Milwaukee Journal Sentinel NY1 Mosquito disease risk isn’t higher Milwaukee Journal Sentinel - 15 hours ago By JEANNINE AQUINO The swarms of mosquitoes spawned by warm weather and lingering floodwaters in Wisconsin are more blood-sucking nuisance than medical peril, health officials said Thursday. West Nile Spreads Due to Flooding, Threatens 4th of July Celebrations eFluxMedia Mosquito district warns: Watch out for West Nile Virus Sacramento Bee WJBF-TV - IdahoStatesman.com - phillyBurbs.com - Atlanta Journal Constitution all 431 news articles Publ.Date : Fri, 04 Jul 2008 03:43:41 GMT Chance discovery points to crib death cause - Reuters ChattahBox Chance discovery points to crib death cause Reuters - 21 hours ago By Michael Kahn LONDON (Reuters) - An imbalance of a key brain chemical could cause crib death, researchers said on Thursday in what they called a chance discovery. SIDS Linked to Brain Chemical Dysfunction Washington Post Brain imbalance 'cot death key' BBC News InjuryBoard.com - Los Angeles Times - WebMD - The Associated Press all 229 news articles Publ.Date : Thu, 03 Jul 2008 20:59:03 GMT Christina Applegate's Boyfriend Found Dead - FOXNews NEWS.com.au Christina Applegate's Boyfriend Found Dead FOXNews - 3 hours ago AP LOS ANGELES - "Married With Children" star Christina Applegate’s boyfriend was found dead in his apartment on Tuesday, FOX News has learned. Lee Grivas, Christina Applegate's Boyfriend, Found Dead Associated Content Christina Applegate's sometime boyfriend, Lee Grivas, found dead New York Daily News E! Online - Los Angeles Times - TheCelebrityCafe.com - TMZ.com all 112 news articles Publ.Date : Fri, 04 Jul 2008 15:22:05 GMT Borowski designated for assignment - MLB.com TSN.ca Borowski designated for assignment MLB.com - 1 hour ago By Anthony Castrovince / MLB.com Looking to repair their battered bullpen and get a better read on what the future holds, the Indians designated the veteran Borowski for assignment on Friday. Indians designate RHP Joe Borowski for assignment The Associated Press New closer alert! Borowski out in Cleveland SportingNews.com National Post - Most Valuable Network - The Plain Dealer - cleveland.com - WANE all 141 news articles Publ.Date : Fri, 04 Jul 2008 16:59:25 GMT Madge Kabbalah'd A-Rod into Submission - TMZ.com ABC News Madge Kabbalah'd A-Rod into Submission TMZ.com - 6 hours ago Madonna is using "mind control" through the power of Kabbalah to mesmerize A-Rod into making him her boytoy, according to friends of his wife. A-Rod's wife tells pals she believes Madonna lured Yank with kabbalah New York Daily News Kabbalah Kool-Aid: Madonna's 'soulmate' to divorce Monsters and Critics.com Reuters - ABC News - E! Online all 1,426 news articles Publ.Date : Fri, 04 Jul 2008 12:49:58 GMT Flames descend canyons in Santa Barbara Co. fire - San Jose Mercury News Reuters South Africa Flames descend canyons in Santa Barbara Co. fire San Jose Mercury News - 41 minutes ago AP GOLETA - A fast-moving wildfire fueled by Santa Barbara County's notorious "sundowner" winds consumed about a half-dozen outbuildings overnight, but firefighters were able to save hundreds of homes from intense flames in the pre-dawn hours, ... Firefighters hold line on two California wildfires Reuters Goleta fire doubles in size overnight Los Angeles Times Bloomberg - CNN International - San Diego Union Tribune - The Santa Barbara Independent all 399 news articles Publ.Date : Fri, 04 Jul 2008 18:12:01 GMT Obama remarks on Iraq prompts flip-flop charge - CNN Times Online Obama remarks on Iraq prompts flip-flop charge CNN - 2 hours ago (CNN) -- Sen. John McCain's campaign again called Sen. Barack Obama a flip-flopper after the Democratic candidate held a do-over news conference to clarify his remarks on the Iraq war. Analysis: Obama's shifts to center give GOP ammo The Associated Press Obama Fuels Pullout Debate With Remarks New York Times WCTV - Monsters and Critics.com - Los Angeles Times - ABC News all 1,014 news articles Publ.Date : Fri, 04 Jul 2008 16:23:39 GMT RSS to Blog RSS to HTML

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