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.

---

Customer First Customer Service

The world of customer service is rapidly changing. Thirty years ago, telephones and mail services were the norm for most companies. Now, faxes, email and web sites... Read More

Take Care of Yourself Before You Take Care of Your Customer

One of the most important questions people ask when they are focused on improving their quantity and quality of business is: "What is my competitive advantage? What... Read More

Difficult Customers - Theres No Such Thing

A couple of years ago I had a call from a Customer Service Manager working in the paper industry. He wanted me to run a seminar for... Read More

How to Win the Hearts of Your Customers and Friends

Those of us doing business over the internet have to become especially adept at our listening and speaking skills since we don't have the luxury of talking... Read More

What Every Employee Should Know About Putting Positive Phrases Into Customer Service

If you were a customer on the telephone with a question or complaint and were ready to make big purchase, which of the following phrases by this... Read More

Customer Satisfaction and the Service Business

The relationship between customer satisfaction and success of a service business is a direct one. Customer satisfaction measurement, however, is a much more complex matter. Customer satisfaction... Read More

Astonish your Customers With These Customer Service Tips

Customer service today is getting worse. Win customers over and you build your business for life. Proven by the leader in the industry -- Nordstrom's. Nordstrom's customer... Read More

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

Do many of us realize that we are working an unpaid part time job for the grocery stores and some home appliance stores? We are ringing up... Read More

Listening: The Foundation of Communication

Listening is the #1 communication skill for leadership, selling, customer service, and even romance! The problem is, most of us don't listen very well. We're not trained... Read More

Be A Resource

What is one of the greatest ways to add value to your business? Nope, it's not giving away free merchandise, offering special discounts, or even creating a... Read More

Handling Customer Complaints

Even the best business will receive an occasional customer complaint. Knowing how to resolve these complaints will help you gain loyal customers who will then refer others... Read More

Stand Out in Business the Write Way

When was the last time you received a handwritten note from a business associate? It may be that it was too long ago for you to remember.... Read More

Post Office, Incredible Lady Postmaster

There are two Post Offices that I routinely visit. One is the office that delivers my mail and the other is frequently on the path of some... Read More

Make An Action Plan To Improve Customer Service

Customer Service is a critical factor for keeping your clients coming back and ensuring they'll refer you to others. Growing your business will be a difficult task... Read More

Increase in Customer Sales = Increase in Customer Service

One of the most popular questions asked in online business forums or even by my customers and subscribers is this :"How the hell can I increase my... Read More

The 7 Principles of Business Integrity

If you have integrity, nothing else matters. If you don't have integrity, nothing else matters. -- Alan K. SimpsonIf I were to ask you what attribute is... Read More

What Every Manager Should Know About How to Win the Loyalty of Customers

Dr. Michael LeBoeuf, in his cassette album entitled, Win Customers and Keep Them for Life presents twelve principles that will transform the workplace into a customer-driven, highly... Read More

4 Things Your Clients Want From Your Company

Sure, all clients are different. They have different kinds of strengths, weaknesses, cultures and goals. Even what blocks their efficiency and growth (blind spots) is different. Davis,... Read More

Do You Want More Profits? - Follow The Golden Rules Of Providing Good Customer Service

Last night I was at my computer and a Skype chat window opened up with a link in it from a stranger. I clicked the link and... Read More

5 Golden Online/Offline Business Rules To LIVE Or DIE By

Whether online or off, if you plan on running or maintaining any type of credibility within your business, there are some guidelines that are safe to say... 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 with a "can-do" attitude or dealing with a disgruntled, distracted, uninterested one, which would you choose? No... Read More

Foolproof Customer Service Strategies (That Only A Fool Would Try!)

Ever notice how customer service varies from store to store? You walk into some stores, and before you can say "Buzz off!" a salesperson asks "May I... Read More

One of the Secrets of a Great Customer Experience

A few weeks ago we conducted our annual "Customer Experience Study Tour" in London England. This is where we take delegates to visit a number of leading... Read More

Provide Exceptional Value - Grow Your Business

The primary objective of a business is to get and keep customers. Growing a profitable business requires providing exemplary customer service and products or services of exceptional... Read More

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

Traditional marketing strategies encourage business owners to continually grow their businesses by adding new customers. In today's competitive world of business, it is more important than ever... Read More

How To Handle Customer Billing Snafus

Q: I just discovered that for the past six months I have been billing a client half of what I should have been. Should I just include... Read More