By Thomas R. Schori, Ph.D., and Michael L. Garee, Principals, Millennium Marketing Research, 808 E. Ironwood, Normal, IL 61761-5239. Tel. 309-532-8466 -
More times than not, whenever powerful, influential forces inside a company get it in their heads that something needs to be done¾ regardless of the advisability or desirability from the customers’ perspective for doing it¾it usually ends up getting done! We have a recent, classic example of this phenomenon in mind.
Several years ago, when we were still employed in the insurance industry, we learned that a leading multipleline insurance company, i.e., one that sells virtually all the so-called "personal lines," e.g., auto, home, life, health, etc., in our market had decided to create a Customer Service Center that would be open 24-hours-a-day, seven-days-a-week, 365-days-a-year. That way, anytime a customer felt the need to get in touch with the company, he or she could be assured that that would be possible.
At first blush this might sound like a good, customer-focused idea. However, at the time, there was a substantial body of industry research (ours as well as others) that clearly and unmistakably revealed that customers felt little need or desire for such an expanded customer service facility from their insurance company.
For years, customers had repeatedly told researchers (us included) that, only in the very rarest of circumstances, did they encounter situations or problems that simply couldn’t wait until the next business day. And, most customers added, when and if they did encounter such situations or problems, they felt confident that they could get in touch with their agent (or a representative) "after hours."
Despite this, however, it was clear that the company was going to go ahead with its plans for the full-time Customer Service Center. Why? Because "key" people within the organization had determined that they, not the customer, knew what was "best" for the customer.
Soon thereafter, another, much smaller insurer in the same market decided that it, too, must set up a full-time Customer Service Center for its customers! If the BIG player in the market was doing it, then it must be the right thing to do! Those companies that didn’t "follow suit" risked being left behind, or even worse, being viewed as somewhat less than au courant.
Our instincts as researchers and marketers told us that before any insurer "leaped" into such a costly and labor-intensive venture they ought to at least "look" again at the opinions and attitudes of the intended "benefactors" of such a facility, the lowly customer! Had customers suddenly and unexpectedly perceived the need for such a service? Were they now willing to shoulder the tremendous cost of such expanded service through increased premiums? (Remember, the companies would have to pass on the cost of such an operation to someone, and guess who that "someone" would be?)
We then made it a point at every opportunity to test our cynical thesis¾that a full-time Customer Service Center quite probably had far more appeal to company bureaucrats salivating over the prospects for expanding their current "territory" than among any significant numbers of customers. But, maybe we were just being cynical. Maybe we would learn that customers had changed their minds and now wanted and felt they needed a full-time Customer Service Center! (After all, as researchers, we had to keep open minds!) Maybe, but we still seriously doubted it.
Thereafter, virtually every time it even remotely made sense, we included pertinent questions regarding the desirability of a full-time customer service center in survey questionnaires going to customers and prospective customers. In addition, during the conduct of many subsequent focus groups, we rarely failed to include questions about the concept. The overwhelming, and consistent, response remained that it was an idea of extremely limited, if not downright questionable value to the typical customer.
Somewhat predictably (remember, we spent considerable time in the "corporate world" during our careers!) and despite this additional, overwhelming evidence from customers that a full-time Customer Service Center was not all that great of an idea, the facilities nonetheless became a reality for both insurance companies! Worse yet, other insurers subsequently moved ahead with their own full-time Customer Service Centers!
We would be among the very first to admit that not every good idea or program (or even most ideas or programs) a company has necessarily originates from its customers or prospective customers. After all, that’s what customers have come to expect from the companies with which they do business! We would hasten to point out, however, that this is not the same thing as implementing ideas or programs in spite of the overwhelming resistance of customers! And that, in our opinions, is precisely what happened when the insurance companies referred to in this article implemented the concept of a full-time Customer Service Center.
Again somewhat predictably, and as is so often the case with bureaucracies, those who shepherded the idea of a full-time Customer Service Center to fruition have certainly been no "shrinking violets" when it comes to vindicating their actions, not to mention taking any steps necessary to guarantee their own continued survival.
We recently noticed that both companies (as well as some of the other insurance companies that subsequently jumped on "the bandwagon") have begun advertising the many "benefits" to customer of being able to stay in touch with their insurance companies (or agents) on a full-time basis.
Thinly veiled in these advertisements, however, is the fact that, in reality, many of the calls that normally would have gone directly to the customer’s agent are now being "intercepted" by or routed to the Customer Service Center, in order to further justify its existence and burgeoning cost.
Some of the "service centers" are even "helping" their agents by getting licensed employees involved in certain "sales and prospecting" activities, long the exclusive domain of agents!
In our opinions, it’s simply a matter of time before customers of these insurance companies, as well as the independent agents representing them, fully realize the full extent to which they’ve been had by the implementation of these full-time Customer Service Centers.
Historically, personal lines insurance companies represented by independent agents (such as the ones referred to in this article) have been able to justify (honestly, we believe) the 15% premium surcharge they pass on to customers because of the convenience (a genuine one, we also believe) of having a personal agent. If the Customer Service Centers become de facto "replacements" for the personal agent¾and we honestly believe that such a possibility exists¾then everyone, particularly the customer, stands to lose.