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.

---

Handling Customer Complaints

Even the best business will receive an occasional customer complaint.... Read More

A New Way To Handle Complaints, Or Is It?

What a lot of money we have been wasting on... Read More

Develop Loyal Customers for a Lifetime ? part 2 (11 ? 20)

Traditional marketing strategies encourage business owners to continually grow their... Read More

Sorry, No Customer Service After 4:00 P.M.

A few months ago, I wrote about ingenious styles of... Read More

How to Retain Your Customers the Dish Network Way

Customer retention is vital to a business. If you cannot... Read More

Profit from a Customer Service Recovery Program

A client recently said to me: "Most days things seem... Read More

Why Cant Microsoft Make Soft Packaging?

Why is it that Microsoft wants you to buy its... Read More

Responding to Complaints

It's possible that in the course of your business dealings,... Read More

Dont Work with Jerks: How to Recognize a Difficult Client Early

Five minutes into the call I knew this client was... Read More

Have You Hugged a Customer Today?

It all started a couple of weeks ago when a... Read More

All of the World of Business Is a Stage

One of the basics of acting taught to me in... Read More

What Every Manager Should Know About How to Prevent Customer Service Conflicts

There are five techniques that have been proven to be... Read More

Sending Mixed Signals Can Send Your Clients Away

I call it the "wave and roll."You walk up to... Read More

Dont Be Afraid To Give Problem Customers The Boot

Q: In a recent column you made the point that... Read More

Improving Customer Service

Improving customer service starts at the top - with us... Read More

4 Myths about Customer Value

The purpose of business is to create and retain a... Read More

You MUST Sweat the Small Stuff

It's The Little Things That Make or Break a Small... Read More

What?s in a Name?

Different people call their Customers by different names. If they... Read More

Is your Online Business Customer-Friendly?

Customer service is increasingly seen as one of the most... Read More

The Sellers Creed

I will not make sales. I will make Customers.I will... Read More

Handling Angry Clients

What do you do when your client gets mad at... Read More

10 Customer Service Quality Statements to Measure up Against

It might sound quick and simple, to say how well... Read More

What Every Employee Should Know About How to See Customers Problems from Their Creative Side

Customer Service is a blessing and a curse; a blessing... Read More

To Complain and Win! - My Personal Recipe

Prime directive: Make sure your claim is reasonable! Otherwise, forget... Read More

Is Your Food Establishment Clean?

Is your restaurant, bar or hotel clean? I mean really... Read More

Reducing Customer Resistance to Your Product or Service

Resistance has to do with putting up blocks that prevent... Read More

Retail Store U-Scan Machines: Self-Serve or Voluntary Part Time Job?

Do many of us realize that we are working an... Read More

Are You Putting Technology Before Your Customers?

Which is more important the technology or the customer?The one... Read More

Customer Service - A Sweet Essence

First let us specifically define customer service. It is the... Read More

Mastering Challenging Service Situations

During the course of everyday business, many of you encounter... Read More

Learn to Anticipate Your Customers Needs

This morning I was having breakfast with my good friend... Read More

Handling Difficult Customers - 8 Strategies

In any business our customers are one of our most... Read More

Create a Positive, Upbeat, Can-Do Workforce and Dazzle the Customer with Your Caring!

Given the choice of dealing with a positive, upbeat employee... Read More