When I was just out of college, my oldest brother sold me a life insurance policy. He needed customers and I was too naive to say no. Every year since, when that premium’s come due, I’ve cursed my brother and the company for whom he once worked. Had Net Promoter existed back then I would have been identified as a dangerous “detractor,” the kind of customer whose profit does more harm than good, and undoubtedly my brother would have been shifted out of sales sooner.
This annual experience had shaped my impression of the entire insurance industry until just recently when I had the pleasure of hearing executives from Progressive and USAA address their impressively relentless focus on customer satisfaction. These presentations were part of a two day Net Promoter conference that celebrated the power of monitoring and addressing customer satisfaction at every point of contact.
Richard Watts, General Manager at Progressive Insurance, started his talk with a family story not unlike the one I told above. Richard, being English, told of his “mum’s” disappointment when the company’s automated system deactivated her account simply because she’d forgotten to return what proved ultimately to be an unnecessary form. By simply eliminating this form, Progressive retained thousands more customers and fulfilled a new internal rallying cry, “Would you do that to your Mum?”
Then Watts delved into the math behind their extensive customer satisfaction activities. With $14 billion in annual sales, extending retention one month represents $1 billion in annual premiums. That’s big money to any company but few have integrated customer satisfaction measures to the extent of Progressive.
An employee dashboard reports real-time satisfaction by customer, by product and by region. Customer verbatims are treated like “treasures” and bonuses are awarded based on retention figures. Employees with the highest Net Promoter Scores are also celebrated at annual events.
This attention to customer satisfaction has also led to the development of new services and coverage areas. Progressive’s 52 “concierge” service centers across the country allow customers to simply drop off damaged cars, select a loaner and return when the repairs are completed. Additionally, Progressive added pet insurance, and did so much to the joy of their customer base, that can now share photos with fellow dog lovers via a community site the brand hosts. And their “name your price” offering was developed in response to customer requests via c-sat surveys.
Another insurance company that goes to extraordinary lengths to please its customer base is USAA. Focused on the needs of men and women in the armed forces, USAA has over 7 million customers, 97% of whom renew their policies each year. This puts USAA 9 percentage points ahead of its next best competitor in the insurance arena. As one happy customer put it “USAA is the best relationship (next to my wife / she’s sitting next to me) I’ve had my entire life.”
At the Net Promoter Conference, Wayne Peacock, Executive Vice President at USAA, noted that his company’s dedication to c-sat starts with their mission “to facilitate the financial security of its members” and in the process be “the provider of choice for the military community.” It’s also embedded in their tagline “we know what it means to serve.” But this dedication to extreme customer satisfaction is far more than lip service.
Mr. Peacock noted how the company stays focused on its members and integrates military life into their corporate culture. It starts with the hiring process, with almost 1 in 5 employees having served in the military or having a spouse who served. From there, new employees go through a sort of “boot camp” that includes wearing 40-pounds worth of field gear and consuming MRE (meal ready to eat) rations. Executives and employees are also encouraged to attend military events on a regular basis and “respond with empathy” to any customer inquiry.
The result of this dedication to service is the extraordinary loyalty I mentioned above and the highest Net Promoter Score across all industries according to Satmetrix’s 2009 study. With this kind of customer satisfaction, it shouldn’t be a surprise that 90% of military officers who sign up with USAA remain customers for life. Like Progressive, USAA is avoiding the “bad profits” made from poorly conceived sales efforts (like my ex-agent and brother!), insuring both short-term and long-term success.