We are in the service business and one of the more interesting perspectives I see is the lack of evolution in the manner used to satisfy clients and attract new ones. We believe past success predicts future advances when largely in the world around us we expect so much more. I bought my first mobile phone, it wasn’t even called a cell phone then, to leverage my time. Since our role requires significant time away from the office, I could make valuable use of commuting time to connect and handle issues that used to require sitting at my desk. That phone was permanently installed in my vehicle and it cost a lot on money to purchase. Access to the calling network was very expensive as well. It performed the basic functions quite well. I was able to make calls and accept calls and I was now connected to my work world even when I wasn’t at the office. The value proposition was simple and fair, for the investment, I could now get things done that required a phone call and I didn’t have to be in my office. I am not really sure when I purchased that phone, but I am sure it was well after I started in this business. You know what’s funny; today you couldn’t give that phone away for free. A phone connected to your vehicle and one where there were substantial places where calls wouldn’t go through. I was at a meeting recently and many of the attendees were armed with their IPads. I felt like a little out of touch because I was taking notes on a yellow sheet of paper. At night I transferred the notes to my laptop while listening to my IPod. Throughout the day I made calls and returned e-mails on my BlackBerry. At the last meeting, there were few, if any IPads and I am willing to bet that at the next meeting IPads will be used in the majority and I can hope that I will be one of those users. This is but one example of the type of change and innovation that defines the product realm. Yet in the service industry, we act like we are immune to these same forces. We ignore the warning signs all around us and believe our industry is different.
Perhaps the evidence demands another review. The new Federal Health Insurance Mandate requires insurers to spend 85% of their income on losses. 15% is left over to run the company, make a profit and pay agents – a tight squeeze for sure. For groups of under 50 lives where every company essentially gets the same rates and there is no opportunity to add value beyond shopping for rates among the 2 or 3 options, guess what is getting squeezed out? Yes, us. Most industry experts believe that the under 50 marketplace will no longer be fertile ground for agents. For groups over 50, commissions are being cut by 15% to meet the Federal mandate so no health plan is immune to the impact of the new program. One day you make a $1,00 and the next you make 85 cents. But wait, an election passed and major changes abound. Thank goodness the republicans will save us from this incredible injustice. I am sure at the top of the republican platform is a plank to save the independent agent. And thank goodness property and casualty is different. Customers still value our professionalism and skill in placing coverage that protects their businesses. Everything works great and they still trust our industry to protect then at market rates. Yet, why do they go get other quotes? Perhaps it is because there are flaws in the industry that get exploited when a customer shops their coverage. Why do clients shop their coverage – because it works. The tangible benefits are quantifiable while we would like the intangible qualities to rule the day. It seems to me if we do the majority of our work within 90 days of the renewal and 5 or 10 days thereafter, we should expect the behavior of our clients to remain the same. We used to craft a program to be specifically designed for a client and today most insurers have target market programs with enough value added coverage included to drastically minimize the need for customization. In some respects the policies we offer have become IPads and have this discounted our intellectual contribution to the protection of our clients. So what to do?
If we take a page from Apple, we should remain relentlessly focused on the customer. If we are in the business of protecting or managing risk then we should be able to site in very short order the largest risks our clients face. It might have nothing to do with an issue that can be protected by an insurance policy directly, but with the margin of success so razor thin, perhaps it might have everything to do with the issue. Who can afford an unexpected loss, or an increasing mod rate or a deductible payment? If people are holding on to their vehicles longer, this diminishes the settlement value increasing the consequence of an auto loss. It seems to me that it is highly likely that many design choices were made at a completely different time, and under completely different circumstances. So to fight against the tide of irrelevance, perhaps the best App might be “The Ask?” Or maybe it might be “The Discarding of Assumption.” The great Jim Rohn perhaps said it best. If you don’t have a plan, then we fall victims to the plans of others and guess what they have planned for others? Not much. Even back then, cell phones made calls just like today, yet the Smartphone of today does so much more –we should too.
No comments:
Post a Comment