Small businesses place significant value in an agent’s efforts to not only completely understand their needs, but also provide knowledgeable guidance and risk management solutions, according to the inaugural 2013 J.D. Power U.S. Small Business Commercial Insurance Study released on Tuesday.
Focusing on small business commercial insurance customers with 50 or fewer employees, the study examines commercial satisfaction and shopping behavior in terms of agent interaction, policy offerings, price, billing/payment and claims. According to Jeremy Bowler, senior director of the insurance practice at J.D. Power, the survey infers the relative importance of each touch point by measuring which are more likely to predict overall satisfaction scores.
The study finds that when it comes to attracting new business, policy offerings are most important to the commercial customer—identifying an important distinction between lines of business, says Bowler.
“When you compare to personal lines coverages, commercial lines insurance customers are far more mindful of what they’re buying,” Bowler says. “It’s more important to them that their policy is tailored to their specific circumstances and risk profile.”
But among the five factors influencing customer satisfaction, interaction received the highest importance weight, with satisfaction at its best when customers engage with their agent in person rather than via email or phone.
Since agents and brokers tend to interact with larger accounts more frequently and personably—larger clients “demand more mindshare” for a variety of reasons, Bowler says—it’s no surprise that customer satisfaction levels were highest among small businesses with 11-50 employees, as opposed to those with four or fewer employees.
“You always want to make sure every customer is fully satisfied with the product you’re selling and the service you’re delivering around that product,” Bowler says. “But the question then becomes, how do you do that profitably? How do you maintain the proper level of service for even the most basic customer?”
When it comes to smaller accounts that demand less time and attention than their larger counterparts, ensuring high levels of satisfaction presents an inevitable challenge. But according to Bowler, agents can still serve customers efficiently with less frequent interactions and fewer face-to-face meetings. Whether it involves great follow-through or a dynamite office manager, making sure the customer receives timely and effective service should be top of mind.
“Who’s covering the bases when you’re not there?” Bowler asks. “Obviously, if the agent is making a visit to my place of work, I’m more likely to say my agent really understands my needs. But one could demonstrate that same depth of understanding without necessarily going to the person’s place of work each and every time.”
To accomplish that, Bowler suggests conducting periodic policy reviews to reach out and verify that nothing has changed in the customer’s underlying risk profile. “Am I making recommendations about ways they could restructure their business or insurance coverages to be more effectively insured? That kind of appointment is something an agent could plan to distribute across the year, so they don’t get hit with a bunch of them at once,” Bowler explains.
In the end, what Bowler calls “proactive outbound communication” as a source of satisfaction returns to the initial value a commercial client places on policy offerings. If an agent takes the time to revisit a customer’s options and explain the pros and cons between their choices, that education will go a long way in keeping satisfaction levels afloat.
“Giving clients a separate understanding of what it is they’re buying has a huge impact on their perception of the consultative nature of their relationship with not only the agent, but also their satisfaction with the product—and, to a lesser extent, the premium,” Bowler says. “It’s not that they want you to be salesy, but when a client feels they have a good understanding of the other products and services you have to offer, they tend to rate that relationship much more highly.”
In Bowler’s opinion, those higher levels of satisfaction correlate directly with a deeper sense of trust—which, once established, can not only make customers more receptive to their agent’s recommendations, but also secure client retention and an ongoing future relationship.
“In those agent relationships that are the strongest, the agent can direct a customer to make a switch three out of four times,” Bowler explains. “When an agent can establish that rapport and create those bonds, it will lead to much higher persistency.”
Jacquelyn Connelly is IA assistant editor.