The Hazards of Indifferent Service

I fired my insurance agent this week…and hired a new one! The old insurance agent did absolutely nothing bad and his office clerk was always friendly if I called. He just never did anything other than write my insurance policies and send me annual premiums. He never called to thank me for my business, opting instead for a form letter only at renewal time. And, this is a small insurance office in a small town, not some mega-business with a gazillion customers!

The straw that broke the camel’s back was when I called one Wednesday afternoon just minutes past noon to inquire about getting a new umbrella policy. I received a phone recording stating that the agency office always closed at noon on Wednesday but would reopen at 9am on Thursday. There was no answering service to channel my call should this have been an insurance emergency. So, I considered sending an e-mail. I Googled the agency name only to find they had no website; there was no e-mail address on any correspondence. If this were 1950 such practices might have made more sense.

My new insurance agent (from the same insurance carrier, mind you) is always available. In our first phone call he took a quick look at my five policies—home, two cars, a boat, and a valuables policy—and informed me that the homeowners policy I had was an old one and he could provide me a newer policy with better features and a 40% reduction in my premium. He also indicated that my boat policy was based on the purchase price value and had depreciated by 30% dictating lower coverage and a lower premium. Then, he backed up his words with a detailed e-mail. I wondered why my “terminated” agent never bothered to shift me to these better offerings. Maybe he was busy out getting new customers while letting his old ones sneak away to a competitor.

Today’s customers expect value for their hard earned, ever challenged income. That value not only applies to product, it applies to their experience. And, when they fail to get the value they expect, they exit. Convergys 2010 Scorecard Series research indicates that 44% of customers that have a bad experience leave and another 15% exit when they fulfill their contractual obligations. When customers fail to get the value they expect, they also tell others directly or indirectly through social media.

Eight percent of customers broadcast their displeasure. The really bad news, according to Convergys research, is that 62% of customers who hear or read about the displeasure from others will either stop doing business with or avoid doing business with the offending company. In this era of “everyone is everyone’s consumer’s report,” a company can go from champ to chump overnight from the viral effect of “word of mouse.”

When customer acquisition costs are many times greater than customer retention costs, failing to invest in your current customers is downright foolish. Are you showing your customers perpetual TLC or do they only get your indifference? In today’s highly competitive world, indifferent service is no longer considered by customers to be neutral or plain vanilla. Their expectations for value have put “ho hum service” in the “bad service” category. Take your customers for granted and they will be vulnerable to the Sirens call of the competitor nearby.