The Insurance Agency Quest for Efficiency vs. Customer Experience

This blog post is bound to sound preachy to some, but we don't mean it that way. Let's face it, the independent insurance agency business is rife with the threat - and reality - of inefficiencies. It's the nature of the beast when you represent multiple insurance companies that all do business a little differently. It's easy to fall into the trap of a single minded quest for efficiency. After all, you have to maintain sanity and that can easily turn into job one. What gets lost when that happens is the customer experience.

Because our days often go from zero to crazy in less than 4.3 seconds we forget to put the customer at the center of the business operation decisions we make.

Once upon a time there was a company that Confluency Solutions worked alongside that advocated for training clients to communicate through email vs. phone calls.

Much more efficient that way.

But training a client on how to communicate with your insurance agency is much different than providing a preferred option. Today, some clients will want to talk, chat, email, text or call. The same client who may prefer email for some communications may want to hop on a phone or Zoom call for others. People will want to communicate how they want to, your agency's 'training' notwithstanding.

An insurance agency that puts the customer at the center of their business decisions will provide as many options as possible as a first step toward a positive customer experience. Promoting several communication options doesn't have to be inefficient.

There are technology solutions that combine multiple communication channels into one platform (think Facebook Messenger, web chat, text, all in one place). There are calendar tools that allow your clients and prospects to set appointments on your calendar and automatically set up Zoom, Google Meet or other web meetings.

Operational efficiency and a great client experience are not mutually exclusive.

What are the benefits of delivering a superior customer experience?

• Increased profit. This may seem counter-intuitive. After all, making process and technology decisions should beget reduced costs, an obvious profit component. But a better customer experience will lead to better retention, and as has been pointed out in a study by Bain and Company, a five-percent improvement in retention can lead to a 95% increase in profitability over five years.
• More referrals. Happy clients are far more likely to refer others to your insurance agency. Lead generating marketing activities cost money and the average client acquisition cost in the insurance industry ranges from nearly $500 to about $900. The cost of referrals is considerably below this range, and according to Trusted Choice, the close rate for referral leads is higher than from any other source at 50%.
• More glowing online reviews. Taking a gander at online reviews, particularly the Google variety, is something 88% of consumers will do before buying anything. Reviews older than 90 days are considered stale and unrepresentative of what today's customer experience will be like. Consumers seldom look beyond the most recent six reviews so what your insurance agency needs is a monthly refresh of at least two to four reviews. Clients basking in the glow of a great customer experience are far more likely to provide these.
• Better employee retention. We're going out on a limb here without data but bear with us. Nobody wants to stay in a job or career where, every weekday morning the morning cup of coffee is accompanied by the sense of dread that comes from the prospect of dealing with sour clients. Happy, well satisfied customers exude positive vibes when working with agency staff. Miserable clients make that first cup of morning coffee taste bad. We can't think of a more awful crime.

Four common 'efficiency' mistakes to avoid.

• Voicemail jail. Automated phone systems can be helpful for everyone, clients and staff alike. But when phone systems are over-engineered, forcing any caller to listen to five or six options before being whisked away to someone's voicemail inbox to leave a message, they start any caller off with a bad attitude. When possible, shorten the phone path to your humans.
• Self-service websites. Offering some level of self-service is table stakes for some clients but don't be overly aggressive by forcing self-service on all your clients. And definitely don't assume that, since you offer self-service, you can cut back on staff availability.
• Making the client or prospect do the work. This is sort of a corollary to the self-service pitfall. When you make clients fill out lengthy forms to get a quote or for an annual review, you are making them work. It's great in theory to transfer the mindless labor involved in form completion but at what cost? How many people will bail out and never request a quote or follow through with an annual review? Think carefully about form design and length, provide other options, and be sure to let people know what to expect once a form is completed.
• Offering limited communication options. Here's a couple of statistics to chew on... 89% of consumers prefer texting with a business over any other form of communication and 63% say they would switch to a business that did offer this option. Here's another statistic: 40% of consumers expect a website to have a chat option; this number climbs to 50% for consumers using a mobile device. If your insurance agency isn't offering both of these options you aren't delivering an optimal customer experience.

On a positive note...

You can't do everything for everybody all the time. You will lose your mind or go broke. The only mystery is which will happen first. All we are suggesting here is that, if you haven' already done so, put the customer experience at the center of your business processes and technology in your agency. You may not be able to offer all the options that create a truly superior customer experience right away but likely you can take some steps that move your insurance agency toward that goal more quickly.