From Resource, February 2004 
Copyright by LOMA

By Tom Moormann, Ph.D., FLMI
Director, LOMA Organizational Assessment

Many companies measure customer satisfaction on a regular basis—usually every year or two—to get an idea of how well the company is doing at maintaining this important corporate asset. However, few managers would be satisfied with annual or biannual measures of performance for financial assets or human capital. If the customer is truly a strategic focus for your company, then measuring customer satisfaction and its drivers on a much more frequent basis is crucial.

One tool for measuring these factors is the tracking survey. Tracking surveys are very short surveys that are administered to the customers or prospects on a frequent basis. These surveys can be administered to randomly selected customers or to customers who have recently had some interaction with the company. The main point is that these surveys provide feedback more often, which in turn allows management to take corrective action without waiting a year or more to find out whether satisfaction has changed significantly.

For insurance companies that want to make the most of every opportunity to deliver superior customer service, customer satisfaction surveys can be an invaluable tool. Companies like AEGON Direct Marketing Services (ADMS), Mutual of Omaha, and MetLife are using these surveys in two ways: first, to measure the service their policyholders are receiving; and second, to determine a course of action based on those measurements that will improve customer service.

AEGON Direct Marketing Services (ADMS) prides itself on its top-quality customer service. According to Donna Blain, ADMS’s Customer Service Learning and Support Specialist, "In today’s strongly competitive business environment, dissatisfied customers will not hesitate to take their business to a competitor. Our goal is to use the survey information to build and implement programs that enable us to give our customers the best service possible."

ADMS has been surveying its customers for a number of years, but it recently contracted with LOMA to take over this process. ADMS was looking for an independent, external organization that would provide an impartial, objective analysis of how their customers perceive the ADMS’s service. LOMA’s reputation for quality and the ability to handle many different kinds of surveys were major factors in their decision.

ADMS has learned that its current levels of customer satisfaction are positive, although there is always room for improvement. One area highlighted by survey results is the need to improve customer service’s ability to clarify and resolve customer questions. ADMS is using survey results to identify ways to use their new administration systems to streamline processes, improve service levels, and provide continuous enrichment training for CSRs so they can provide customers with the most knowledgeable company representatives.

Mutual of Omaha Insurance Company uses a number of customer surveying tools in its efforts to manage and improve customer satisfaction. Two years ago, as part of a corporate effort to better manage relationships with key stakeholders such as customers, the company implemented a comprehensive annual customer survey. The survey was designed to accomplish three objectives: to establish an internal baseline against which improvements in customer satisfaction could be gauged; to measure customer satisfaction on an ongoing basis; and to evaluate how Mutual of Omaha compares to other insurance companies in terms of customer satisfaction. Just as important is the use of survey results to help Mutual of Omaha identify areas in which its customers believe service improvements are needed.

Mutual of Omaha selected LOMA to administer and analyze its customer survey results. The company cited three reasons for choosing LOMA: its credibility and respect within the industry, the cost-effectiveness of its products, and the benchmarking opportunities those products provide.

Mutual of Omaha has learned a great deal from this process. "We have identified areas of strength, such as the people skills of our associates," said John Wells, senior vice president for Mutual of Omaha. "Mutual continually ranks high in empathy, reliability and responsiveness, which we attribute to the service training and strong service culture within our company. We highlight strengths such as these to ensure that we continue to excel in those areas."

Mutual of Omaha has also learned that its customers view the company quite positively compared to many other insurance companies. "Results have shown that Mutual ranks substantially higher than the benchmark group when measuring customers’ opinions on whether they would purchase additional insurance or say positive things about Mutual of Omaha to other people," Wells said. "This relationship we’ve developed with our customers has proven to be key in continuing to build customer loyalty."

However, Mutual of Omaha has also identified several opportunities for improvement based on survey results. Wells outlined these opportunities as follows:

* "We have learned and are promoting that customer service is not just the responsibility of a functional area within the company; everyone in the company has a role in providing outstanding customer service."

*  "We have also learned that communication is the key to success on many levels. While communication with orphan policyholders may be a challenge, it is one that must be dealt with. Overall, it is those customers who have continued positive interactions and are kept informed who are most loyal."

Finally, when asked to elaborate on how the company has used the survey information and measured the results, Mutual of Omaha wrote: "The results of our survey have been used to measure the satisfaction levels of our customers. We baselined our current level, identified areas for improvement, and set goals to increase customer satisfaction going forward. We have used the results to measure against ourselves on an ongoing basis as we continue to improve satisfaction and build customer loyalty. We learned that overall customer satisfaction and loyalty levels are high and that Mutual of Omaha is exceeding the expectations of its policyholders."

MetLife Imonitors small and mid-market corporate client satisfaction on an ongoing basis to drive improvements to people, products and processes. MetLife client satisfaction is measured in four categories:

• the client’s relationship with and loyalty to MetLife;
• the performance of sales and service representatives;
• the performance of its service platform; and
• the effectiveness of core business processes, such as acquisition, case implementation, service, underwriting, enrollment, reporting and billing.

In addition to measuring client satisfaction, the company conducts a Competitive Benchmarking Study to benchmark its performance against key competitors in all of the above areas. "Looking at the results within a competitive context is key to accurately assess your performance and understand how wide the gulf is between your company and the competition," says Gene Lanzoni, Vice President, MetLife Market Research.

This research is conducted by an external research company and consists of continuous phone interviews at an average of 10 minutes each. All interviewers are trained and monitored during in-person briefings conducted by MetLife research personnel. Partnering with external research suppliers is key to building a successful research process. "We strive to educate our vendors on our business so they are in a better position to consult with us and add value to the work they do on our behalf," says Neil Marcus, Director, MetLife Market Research.

In the interviews, questions cover such topics as overall satisfaction with the relationship, the value of MetLife’s products, the ease of doing business with the company, the likelihood of recommending MetLife products to others, the level of satisfaction with one’s primary contact, and the level of satisfaction with core functions.

Results from this research are used on both strategic and tactical levels. Summary reports are issued quarterly to identify trends, strengths and weaknesses, and key drivers of satisfaction are used to guide process improvement efforts. On a more tactical level, individual respondent reports are created and posted to a database for those clients who agree to share their feedback (almost all do). MetLife sales and service personnel use these reports to address specific client service issues that require immediate attention, as well as account planning purposes.

If we concentrate for a moment on life insurance, one may question how important it is to provide outstanding customer service. After all, interaction with the customer is often infrequent and, in many cases, is handled by an agent or broker. A comment we often see on our customer surveys goes something like this: "I just get a bill from my company; I never talk with them about anything else."

It is this infrequency of contact that makes outstanding customer service so important for the life insurance industry. If the customer has a bad experience, he or she will tell others about it. And with few opportunities for the insurance company to recover from the bad experience, these negative comments are likely to reverberate for a much longer period of time than for other types of businesses, where interaction is more frequent. Thus, poor service can lead to the loss of an existing customer and make the job of attracting new customers much more difficult.

For other types of insurance, interactions may be more frequent, and therefore be considered an integral part of the product the customer is buying. For example, health insurance, dental insurance, and disability products may involve frequent claim payments, and group insurance products may involve frequent interactions with plan administrators to manage enrollments and billing. In these situations, the connection between the customer’s perception of service and their satisfaction is more direct, and therefore needs to be managed more closely to maintain customer loyalty.

Transaction surveys help a company gather information about its service performance during these interactions, or "moments of truth," as author Jan Carlzon called them in his best-selling book of the same name. These moments of truth are critical to maintaining customer loyalty, and so companies need to identify them so that they can measure their service performance on a frequent basis, take action to improve their service, and measure whether their improvements have actually had an impact on service levels. Mutual of Omaha, MetLife, and ADMS are improving their service operations with this kind of information, and your company can, too.

LOMA’s FOCUS® tracking system is designed to provide insurance companies with the means to measure customer opinion about a specific type of transaction, such as policy changes, claims resolution and CSR performance. Tracking can also help gauge the effect certain process changes have on a company’s ability to improve customer satisfaction.

LOMA’s FOCUS® Tracking System provides a way to continuously measure customers’ level of satisfaction within days after a transaction takes place. A short survey is mailed to a sample of customers after they have completed a transaction with the company. LOMA then compiles this information and reports back to the carrier on a continuous basis.

FOCUS® tracking surveys allow a participating company to do the following:

• maintain a cost-effective method to consistently track customer feedback regarding the level of customer service they receive;
• monitor trends to see how company initiatives have affected customer satisfaction over the duration of the survey;
• evaluate and motivate employees;
• implement new strategies based on an objective analysis of the customer feedback; and
• customize tracking functions to fit each company’s specific needs.

LOMA’s FOCUS® tracking survey measures the areas that are of greatest importance to your company, be it CSR performance, service recovery, satisfaction with claims administration, or whatever your needs may be.

Each project is customized to address a specific need—for example, which transactions are to be addressed and which areas of customer satisfaction are to be measured (e.g., timeliness, accuracy, responsiveness). In addition, the data may be analyzed to determine specific results by product line or regional office.

Contact Resource:
resource@loma.org