Blogs - Insurance Services Outsourcing
| Measuring customer satisfaction is important – various approaches exist |
| By Jeremy Owenson on 10/12/2009 7:37:54 AM |
"In God we trust, all others show data." I saw this pinned on the board of a senior executive responsible for customer care many years ago. He believed that what he could not measure did not exist.
Granted, insurers spend a lot of time measuring satisfaction, either by surveying their customers following an event or by tracking the performance of their supply chain through satisfaction monitoring. There are a number of syndicates and peer review groups that benchmark performance and related customer satisfaction. However, many focus on the wrong metric—keeping score by tracking their league position year on year--rather than delving into customer insights in order to improve processes or retention.
According to a recent Datamonitor study, a well-known US-based insurance and diversified services company saw its annual premia increase by $1 million when it was able to enhance customer retention by only one per cent. Let us look at another data point: The American Consumer Satisfaction Index says:
- 26 per cent of insurance customers will switch their insurance providers, based solely on a bad experience with their call center.
- Satisfied customers are 50 per cent more likely to listen to a sales offer while dissatisfied customers are twice as likely as satisfied ones to refuse an offer after listening to it.
Given the direct impact of customer satisfaction upon sales, it is imperative that insurers maintain an exclusive focus on measuring the drivers of satisfaction.
Fundamentally, there are two ways to measure customer satisfaction. A company can opt for either a relationship survey which involves asking questions about all or many aspects of the service relationship or a transaction survey which tracks a specific interaction between the customer and the insurer. It is important for a company to select the appropriate measurement model in order to meet its customer care objectives.
Relationship surveys have several advantages. These include increasing client retention, and obtaining performance-based feedback and innovative ideas from the customers themselves. However, these surveys also have drawbacks in that the person “may not be truthful about a controversial question” and being standardized in nature, surveys are often inflexible.
A relationship survey is ideal if the transactions are simple but more frequent. These surveys are also ideal for assessing an on-going relationship that may be more important to a company than an individual transaction.
As far as transaction-specific surveys go, they accurately measure customers' perception or acceptance of processes and procedures for that particular transaction. If the transaction is complex and has to be conducted infrequently, a transaction-based survey may make sense.
A transaction survey allows the interviewer to ask open-ended questions. It also delivers more accurate information as customers’ memories tend to be better when referring to a specific transaction. Importantly, information obtained from transaction-based surveys can be linked to Six Sigma analysis.
The downside of transaction-based surveys is that they tend to be more costly than relationship surveys.
In business, the customer is king. So measuring how satisfied the customer is with the services the company provides and then working on actionable results will do wonders for your business. It is important for everyone in the company especially those in the frontline of customer service to be clued in to the customer’s voice and relay feedback to the management. Satisfied customers will stay invested in a company and be its brand ambassadors.
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