Point/Counterpoint: Should Independent Agencies Keep Customer Service In-House?

Is it better for independent agencies to keep customer service in-house?

YES.

Although every agency must make decisions based on its own characteristics, keeping customer service in-house provides many advantages: It keeps the client in touch with the agency, improves retention, facilitates growth through referrals and fosters a professional atmosphere.

At my agency, customer service is part of our mission statement. We believe in treating people as we would like to be treated ourselves. I do not believe that a business that relies on people for its success can expect to prosper by cutting those people out of the equation.

Insurance agents are professionals who provide a valuable financial planning service, not clerks who fill orders without determining if the client is getting the product that they really need. That means insurance agents prosper by expanding their books of business, which naturally increases commission income.

Consumers can buy insurance from anyone, but I want them to buy it from me. And once they buy it from me, I want them to not only keep it with me, but also refer their friends and relatives.

How do I increase the likelihood of gaining their confidence? By responding to their calls, providing the services they need, demonstrating my professional skills when they have a question or a problem, and letting them know through my actions and attention that I appreciate their business.

Some large agencies may choose to divert routine customer service matters to call centers, but I find it just as easy to respond to those requests myself. Every minor transaction is an opportunity to strengthen the agent-customer relationship.

—Kelley Kimble, agent, Judy Holder Insurance

NO.

The most obvious benefit of outsourcing customer service is that while the service provider’s sales team is tracking down and assisting insureds, we’re selling other policies. Increased sales activity translates into better bonus dollars.

Plus, we all want to offer a virtual insurance agency to our clients. Outsourcing customer service gives our clients 24/7 access to live service personnel who can handle 99% of their issues on the first call. Insureds never have to leave a message and wait for us to call them back the next day.

Some would argue that a third party can never know our customers as well as we do. That’s true, individually; as trusted advisers, we know things about our customers that these companies simply cannot. But why not use that knowledge to make sure your client has proper coverage, and let the third party handle the mundane changes?

You may have customers who say they always prefer to work with you directly, and that’s fine—you can still maintain that special relationship. But don’t be surprised on a Monday morning when you discover that client bought a new car over the weekend, and the change has already downloaded into your operating system—without any input from you. You can bet your client was happy to have their auto ID cards in their pocket and on the dealer’s desk before they drove off the lot with their new car early Saturday evening.

For a fraction of the cost of one employee’s payroll and benefits, you can have a team of well-trained employees available to assist your customers around the clock—and you can grow your business without hiring additional staff to handle it.

—Stan Dreckman, CEO, Higgins Dreckman Insurance