Category Archives: Service

Why You Don’t Want Treat All Customers Equally

After weeks of studying customer service studies and talking with agents about their best practices, I stumbled upon an article in Sales & Marketing Management titled “Delighting Customers Doesn’t Pay”.  The basic premise is that customer satisfaction doesn’t always correlate with customer loyalty, and as business people we can give the concept of delighting customer an inordinate amount of energy.  

This seems to be slightly disturbing.bad customer service

Anyone who has spent time in the sales and service business often live by the phrase the customer is always right, but is he?  Is there a time you want to nix customer service? Is something else more important that trying to delight every person that comes in contact with your business.

It pays to know your customer and know yourself.

Think about Wal-Mart vs. Nordstrom.  Stories abound about Nordstrom going above and beyond in the pursuit of delighting their customers.  On the other hand, you have Wal-Mart, and rarely do you feel delight when leaving their stores.  Yet both are extremely successful around what they do.

The difference is that they know their customer and know themselves.  Wal-Mart’s goal is to bring products to consumers at the cheapest possible prices or in their words: “Saving people money so they can live better”.  Having a good experience in their stores is defined by paying less than you would at other businesses.

Nordstorm’s goal is to bring high quality products to customers creating an experience of luxury and excellence.

The key to both these businesses is knowing who they are, and part of the way you know that is by defining your target market.  We have discussed this before.  This can be difficult to determine but it becomes part of what defines you as a business and a brand in your community.

Have you done this?  Do you know what your ideal customer looks like?

If you are having trouble defining who that customer is, go negative.

Make a list of people you don’t like doing business with or who you don’t want to do business with.  You will soon find that you are narrowing the scope of your customer really quickly, but will often find that there are people in that list that are making it into your business and frustrating you and your staff.  It is time to put some stop signs in place against those you define as customer vampires draining the life from your agency.

Here’s a tool that I picked up from Michael Hyatt’s site:

customer service

This chart will begin to help you refine who your ideal customers are, allowing you to create action steps around each type, so that you can provide appropriate levels of delight and service.

Let’s take each one from the lowest priority to the highest.

Priority 4:  Low Profit/High Maintenance.  These are your dogs.  In our world of insurance, these are the people who generate the least amount of revenue for you, but create an awful lot of work.  They are never happy.  They call with billing questions constantly.  They are forever making changes to their policies, and in return offer very little back.  In the trade for value, you give way more value than they do.

Priority 3:   High Profit/High Maintenance.  These may really be the vampires inside your business.  They generate a higher amount of revenue for you, but they are hard to deal with, and drive your staff crazy. You secretly think about dumping them as a client, but the benefits they bring keep you holding on, suffering whatever abuse they continue to inflict upon you.  You remember the friend with the bad girlfriend (or boyfriend) they kept around for the status and benefits, but everyone was screaming: “Dump them!”

This one is very hard, but it is worth making a list of these folks and the value they bring to your business.  You may not let them all go, but force yourself to determine whether the abuse they offer is really worth the value you receive from them.

Priority 2:  Low Profit/Low Maintenance.  This customer doesn’t generate a lot of value for the agency, but they are so easy to work with and create very little friction in the office that you are willing to write this type of customer all day long.  Even though they don’t pay much, a lot of them become valuable because they create so little work for you.

Priority 1:  High Profit/Low Maintenance.  This customer has a high return on investment.  They generate a greater than average revenue per customer, are happy, pleasant, and create very little work with your staff.  They send referrals and never get petty or bog the office down with weird policy or billing questions.

How Do Implement This in Your Business?

  • Evaluate Current Book:  You have already been doing this.  As you have been reading through the list of priority customers, I guarantee that certain people have been coming to mind, and several you may have thought about dumping.  I bet your staff could do the same thing very quickly.

Determine what your average revenue per customer is.  Don’t get to complicated here.  Your management system can tell you average premium per customer, just use that rather than trying to parse out the individual commission rates per client.  If you can do that great, but it won’t dramatically impact your end list.

Who is below average and who is above it?  Who is in the top quarter?  Who is in the bottom?

Now you know the high and low profit customers.  Go through each one and determine who are the high and low maintenance customers.  This may be a job for your staff.  They interact with them the most, and if there is abuse, they probably take it.  

  • Create a Customer profile:  You will soon notice patterns and qualities.  Start listing out the characteristics that fits those buckets in your agency.  What does a Priority 1, 2, 3, & 4 look like in your agency.
  • Create Pre-Qualifying Strategies:  Now that you know what to look for, craft a list of pre-qualifying markers and questions to help you determine what bucket a customer fits into.  If during your initial interview with the customer, you see they are 3’s or 4’s, you begin to pass and send them down the road.
  • Align Your Sales & Marketing:  Ultimately, this will help with sales and marketing.  You have become really clear on the customers you want.  Now you can target your marketing to them.  You can learn what they like and don’t and where they are then intentionally begin building your agency with customers that fit you and your goals.

Songwriter Ed Sheeran said, “I can’t tell you the key to success, but the key to failure is trying to please everyone.”

Or simply, like your mama said, “You can’t please everybody all the time.”, BUT you can choose who you want to please and build your agency around that.

Be Productive,

Theron Mathis

photo credit: libraryman via photopin cc

How Do You Create Customer Service Goals?

medium_4929302647One big secret to creating your own brand of great customer service is to give it a goal.

It needs a target, a finish line, an image of perfection to strive toward.

Without some tangible goal, it just flounders around like some amorphous amoeba.  You can’t pick it up and look at it because it slides through your fingers. You can’t describe because it’s always shifting and changing and only broad adjectives will work.

If you give it a goal, if there are real images of the perfect customer interaction, then you have done something truly different. You have separated yourself from most businesses. You have branded yourself and you are on the path to create a different experience for your clients.

So where do you start. Let’s start with the experience you want to create for your customers

* Customer Experience: Spend some time thinking through great customer experiences you have had. They are probably few and far between. Get your staff involved, but don’t call a meeting. Give everyone a couple of days to turn in examples of great experiences they had with various businesses and what made them great. If people are struggling then have them write out the bad ones and what made those miserable. Sometimes it is just easier to know what to avoid than what to do and add.

Recently I had a great experience with a local body shop.

Unfortunately we had a handful of minor dings that needed repaired. Of course, I asked around to find someone good and fair. First this place was beautiful as body shops go. Everything was clean, and all the employees were in perfect uniforms. They didn’t talk down to me or treat me like I was stupid (because I am, knowing nothing about cars). They gave me options on fixing the damage. They gave me a time frame for completion and an estimate on price.

So the day came to take the car into the shop, and by day’s end the phone was ringing letting me know it was complete. We drove over to the shop, and there it was, no scratches, clean and shiny. Surprisingly they completely cleaned out the interior of the vehicle as well (impressive). I walked in the office to settle up, expecting the price to be a good 10% higher than they said. Of course, I thought, they found something wrong or ran into some roadblock that cost a little more money. No, no, no, it was actually less than quoted. Only by a dollar, but it was still less. We drove away happy.

On the other hand, I battled it out with a phone company recently, receiving nothing but poor service at every turn. I will spare the gory details, but I decided to change phone companies to lower some of my bills. I called and got everything setup to start. They told me it would be a week before they could make the changes, which didn’t bother me. I hung up the phone, and crossed my fingers. A day later, I had questions and thought I would ask about my order. I called back, and it took several folks before they could find it. Then I began getting different answers about whether my number would be changed. One said no, the other said yes. One did some magic button pressing and placed me on hold. Someone transferred me to the division that would get it straight, yet they couldn’t. Eventually I cancelled the order, willing to pay more with my current carrier, just because of the hassle and incompetence.

I guarantee you have had similar good and bad experiences. Spend some time collecting stores and deciding what made them good and bad and how you could apply them in forms of do’s and dont’s within your own agency.

* Agency Behaviors: After you begin to collate your experiences into a workable list, turn them into true agency behaviors that everyone can accomplish:

smiles while on the phone, don’t let the phone ring more than twice, call backs in less than 12 hours, birthday cards for all customers, proposals emailed to customers within 2 hours, etc.

Make sure they match the things that you and your people value in your own experiences. During this exercise, you can even ask every customer about their own good and bad experiences. You and your staff may value different behaviors than your customers, and ultimately it is about them.

* Service Outcomes: List out real outcomes of the service experience you want to create. What does a satisfied customer look like. Define their experience after talking with you.

Then determine what impact will this have on the agency: increase in policy counts, increase referrals, improved retention, etc.

Make things as tangible as possible so they can be evaluated for effectiveness.

After you finish this exercise you should have a clear picture of what “great customer service” means, and you have created a target for your office.

It is tangible and something everyone can grab and hold. Communicate it to the agency and even your customers. Review periodically. Don’t be afraid to be creative and even a little weird. Throw in some random surprises that you would like to do for people.

Establishing customer service goals creates a tangible brand that your people and customers can embrace with delight.

Be Productive,

Theron Mathis

photo credit: Rick Bolin (IntelGuy) via photopin cc

Does Customer Service Really Matter In Your Business?

Customer Service Everyone says they have it and it’s the key that sets them apart.  Ask an insurance agent or any small business what makes them different from another business, and you know what they will say: “Great customer service”.  I don’t think I work with one agency that doesn’t claim to have great customer service, and I agree, most do.  But is that really a differentiator, does it really set you apart, if everyone else claims to have it.

Maybe.

Let’s talk about what really “great customer service” means, because I believe this may not be what we think.

Why is it important to your agency?  This may sound like a stupid question, but it’s worth considering, because service can easily become a mundane part of the agency.  It’s easy to let this part run on auto pilot, while you worry about where to find accounts, pay the bills, deal with HR issues, worry about the building, etc.

Consider this:  your service people are the face of your agency.  Very few people in your office talk with your customers as much as the service people do.  While the salespeople may be out hunting, the service people are creating impressions by the hundreds of every week with current customers, vendors, and company people.

Whether people continue to do business with you or not is often based on the relationship they establish with your service staff.

If there is stress in your office, if your people are negative and grumpy, if working conditions are miserable that will be communicated to your customers.

We all know this is true.  Think about the times you have to call your cable or phone company.  The monotone, robotic, depressing sounds that come from the receiver tell you those people are miserable, and if you can escape from doing business with them you will.

How about visits to the DMV?  Depressing!  It’s not the customers that drive the misery.  It’s the people behind the counter.  They are bored or discontented and their attitude produces a fog of depression in every corner of the office.

Not only are your service people the face of the agency, but they have the power to create and shape the culture of the office.  The sales people are usually gone, but the service people are always there and how they interact and shapes the atmosphere in the office.

One of the quickest ways to begin to change the culture of the agency is to affect attitudes of the people talking with your customers.

I see this all the time.  My regular trips to ABC Insurance are tense and unhappy.  There are whispers and gossiping, then one day I walk in the door and attitudes are dramatically changed.  There is energy.  People are smiling.  No complaints.  What has happened?  The customers are the same, the owners are the same, the office hasn’t been redecorated.  After putting on my detective hat and asking a few questions, I discover “Suzie Q” left last week for another job.

One sour soul poisoned the agency culture, but once she left, the attitudes turned on a dime.

So great service is important.  No one would argue the point, and having great service people not only impacts customers, but infects your whole operation.

Is it enough?  I don’t think so.  It’s has become so understood, especially for the local business, that good service is the baseline.

It is necessary, but to become really great there is more.  Figuring out ways to create customer loyalty and enhancing their experience with you will really set you apart.  Very few shops don’t neglect phone timeliness and are educated enough to generate sufficient answers, but do the customers have a unique experience?

Be Productive,

 

Theron Mathis

photo credit: Lab2112 via photopin cc