Customer Service Focus

Customer centric should be the focus

Maintaining high levels of service during "doing more with less" times

By Jeanette Machisic, CIC, AAI, CTM, and Matt Coleman, CPCU, ARM, AAI

Customer service is under attack, given the soft market and economic constraints that most agents and brokers face. Revenues and profits are suffering, contingency payments are down or absent, and management is re-looking at every expense and job for possible savings, with a view toward maintaining the levels of service that customers expect and deserve. It is the classic, "How do we do more with less," but this time around all the chips are on the table.

As a growth-oriented broker, my employer, HUB International is keenly aware of the need to constantly raise the bar on customer value delivery while still maintaining target margins. The agency has acquired more than 200 agencies in the past 10 years and, while that pace continues, the challenge of integrating agencies efficiently without compromising service is driving a critical evaluation of our service models.

As with most businesses, a look at our customer base would reveal that the Pareto Principle (80/20 Rule) is alive and well. Actually, in Colorado we figured out that 16% of our customers account for about 80% of our revenue. The question became, how do we provide the high levels of sales and service to the 84% of our customers that account for 20% of our revenue? The answer was to create our "Select" business unit. This high volume—and high importance—unit was designed to better serve the client and gain efficiencies in our own business.

Traditionally, insurance brokers have organized their efforts by line of insurance—commercial lines, employee benefits, surety, personal lines, etc. While there is certainly a logic to this, not the least of which is the specialized knowledge each area calls for, we could all probably agree that the model has not been "customer centric." That is, traditionally the business has been organized around us, and not the customer.

As an industry we create silos, units with defined expertise that really don't work closely with one another, and then pass the customer along, hoping for the cross-sell. Our agency has taken a new approach, organizing a "Select" unit around the needs of its customers. We house all of our support for that customer in this unit—commercial lines, group benefits, individual health, and personal lines. We sit together, plan together, work together, and continually share ideas on how we collectively can best service our common customer. Development of this unit allowed us to answer several very important questions:

• How can we make the insurance purchase experience quick and easy for the customer without compromising quality? Small business owners buy all the insurance products we have available—be it on a group or individual basis. When buying from a traditional agency, the customer would have to deal with three or four different sales units that are organized by what the agency does vs. what the customer needs. By building a multi-disciplinary team, our agency provides customers with the simplicity of dealing with a single contact/team for all of their needs. That's one-stop shopping, if you will, without having to go to "another store in the mall."

• How do we assure that our customers are receiving the best insurance products available? "Less is more; fewer are better." When I first took a look at all the insurance companies that we did business with, my eyes glazed over. More than 100 insurers and wholesalers provided services to our clients. Confusion reigned. The process of administration alone was enough to consume our staff, before they even got to the clients' needs. We made a very disciplined and conscious decision to narrow the number of insurers we represent in this business unit so that our team could focus on a handful of capable partners and their products.

At HUB, we call them "3C Carriers" or "Customer Centric Carriers," and this applies to property/casualty as well as employee benefit lines. We have national relationships for all of HUB, and each major office has regional carriers that they also work with to assure that we are able to provide the most competitive offering to our local customers. The benefits to this structure are many—strong working relationships, improved responsiveness, dedicated underwriting/service staff. All of this ultimately leads to a better customer experience.

• How do we make sure that our small business customers are being advised by some of our best talent? Small business is not the domain for the inexperienced or untrained. Indeed, for these accounts that have no traditional sales person assigned, it is critical that the individual talent level be high—both to serve the client effectively and also to avoid E&O claims, the exposure to which is significant even for comparatively small businesses.

We actually "re-interviewed" existing staff, in some instances individuals who had been with us for years, to assess if they had "the wiring" to perform effectively in the Select unit. If our Select unit staff was not well suited for their responsibilities, it would lead to multiple calls, passing the clients around, poor service, lost business and potential E&O claims. None of us can afford that at any time, especially in the current market.

Today, Hub's Select business unit handles thousands of customers and millions of dollars in revenue and is unquestionably one of the most profitable segments of our Colorado business. It's also been an opportunity for us to learn new ways of serving this customer base.

We've all heard, "If you do what you've always done, you'll get what you've always gotten." In the current economic environment that wisdom is amplified. If you do what you've always done, you might not survive the next couple of years. Ironically, what's different about our approach today is that it truly is customer-centric. Imagine that! Focusing on the customer by how we are structured and by how we deliver services really is the right answer.

The authors

Jeanette Machisic, CIC, AAI, CTM, is an assistant vice president with HUB International. She is the client services manager for the Denver Select Unit. Matt Coleman, CPCU, ARM, AAI, is a senior vice president with HUB International. He is the chief sales officer for the state of Colorado.

For information on the CISR program or Dynamics of Service conducted by The National Alliance for Insurance Education & Research, go to: www.TheNationalAlliance.com.