https://completemarkets.com/Article/article-post/975/AGENCY-COMPENSATION-SURVEY-2/
Agency Compensation Survey 2
AGENCY COMPENSATION SURVEY by Carol Hammes As of this writing, the government has determined that the insurance industry as a whole has 2.2 million workers who earn an average of $37,864. The Property/Casualty industry employs 1,340,500 people at an average salary of $37,844. The various P/C insurance companies have a total of 634,800 people earning an average of $41,273 per year. Agents and brokers employ 705,700 people and pay an average of $35,000 per year, which includes the return on ownership generally taken out by principals of privately held firms. Although the rate of increase in employment for insurance agencies has been comparable to the nation as a whole in the past decade (3.7%), the Alliance of American Insurers believes that the increase in available agency jobs will steadily decrease until 2005, when it will be only 0.2%. Advances in technology and office automation as well as business combinations are cited as the major reasons for the projected decrease in the employment growth rate. The projected decrease in jobs over the next several years will have relatively little impact at the individual agency level, except perhaps in the largest brokerage firms. Agency principals will continue to be faced with attracting and retaining good producers and service reps. Even in areas where insurance company mergers and layoffs have put a number of insurance professionals out on the street, finding people with agency sales and service experience is difficult and often very expensive. In the scramble to find someone who knows how to analyze risks and communicate insurance terminology to clients, many agency principals and managers are tempted to offer more than they believe the job is worth. The result can be inequities in agency pay scales, with loyal employees who have been there for several years receiving salaries lower than those paid to the new hires. To avoid the inevitable morale problems and additional turnover caused by such a situation, it's necessary to establish a compensation plan with salary ranges, bonuses, and commissions that are competitive and yet still reflective of the functions and level of responsibility handled by each employee. Written job descriptions should include not only the responsibilities and functions to be performed but also qualifications for education and experience. Salary ranges and bonus programs should be tied to the job positions and the individual's eventual level of performance. Job responsibilities may change over time as automation is enhanced or the organizational structure is revised, so both the job descriptions and the salary ranges should be reviewed each year. For more than 15 years, my firm has been conducting national compensation surveys that give agency managers an idea of what other firms are paying for comparable positions. The information can be used with local salary comparisons to facilitate the annual review. This article presents survey results divided into rural and suburban/urban groups. These results represent averages, not medians, and are comprised of agencies located throughout the United States. Other than for management positions, agency size has very little bearing on the results, since smaller agencies in a marketing area have to compete salary-wise with the larger ones. Adjustments must be made, however, for nontraditional job descriptions as well as for geographic location. The Department of Labor salary data indicates that a number of states have average per capita incomes that are significantly higher or lower than the norm. Here are the national results of the survey. States not shown have per-capita incomes within 5% on either side of the median level. +20% CT DC MA NJ NY +10% CA DE IL MD NH NV 10% AZ IA IN ME NC NE SD TN TX VT WY 20% AL AR ID KY LA MS MT ND NM OK SC UT WV GENERAL AGENCY COMPENSATION INFORMATION The average rural agency responding to the survey had $511,636 in total revenues generated by 7.1 employees including the owners. The urban agencies had an average of $1,480,993 in revenues, with a head count of 15.4. Revenues per employee ranged from $72,061 in the rural agencies to $96,168 in metropolitan firms. There were 1.6 agency principals in the rural firms and 2.2 in the urban firms. In the total group of respondent agencies, sales functions were handled by 24% of the employees, management tasks were assigned to 16%, and service and support personnel made up 40% of the employee group. The rural firms reported a pretax profit of 7.0%, with the owners taking out another 29.4% in W-2 income. This puts the ownership return ratio at 36.4% of revenues. Urban owners had an average profit margin of 8.6%, compensation of 24.3%, and a return ratio at 32.9% of revenues. Non-owner producers were paid 15.7% of total revenues in rural agencies and 13.6% of revenues in metropolitan firms. Non-owner managers and staff received 21% to 21.7% of total revenues. Average wage increases for insurance agency employees were 4.7% for the rural firms and 4.0% for the urban firms. This is higher than the increases reported over the past several years and above the national average for all types of businesses. Almost half of the rural firms have an incentive plan, and 70% of urban firms reward employees based on some definition of agency results. In both locations, the most popular criteria for determining the incentive payments is agency profitability. Revenue growth and increased productivity are also used by many agencies to create the bonus pool. Splitting contingent income has traditionally been one way of rewarding employees, and almost 10% of firms still use that relatively simple method of providing extra income. Most agencies provide Group Health insurance for their employees, with close to 100% of the employee's coverage paid by the agency and 32% to 43% of the dependent's premiums. Among the rural agencies, 60% have some sort of retirement plan, with half in IRA/Keogh/SEP programs. Only 8% of these firms have a qualified profit-sharing plan. In contrast, 89% of the urban agencies have retirement programs; 42% have chosen the 401(k) option. Another 24% have profit-sharing plans, and 16% make IRA/Keogh/SEP programs available. SERVICE STAFF COMPENSATION The following charts present the most recent average salary ranges for the major service positions in insurance agencies. Most of the ranges have increased slightly over the past several years, although not at the rates we were seeing in the early years of this decade. The entry-level commercial CSR and the employee benefits CSR have remained steady. Rural Agency Service Rep Salary Ranges Position Salary Range Personal CSR -- 2+ years $19,764 - $24,230 Personal CSR-under 2 years $15,397 - $18,118 Commercial CSR -- 7+ years $27,441 - $33,155 Commercial CSR -- 2 to 7 years $21,452 - $24,860 Commercial CSR-under 2 years $16,894 - $20,386 Employee Benefits CSR $18,880 - $25,940 Urban Agency Service Rep Salary Ranges Position Salary Range Personal CSR -- 2+ years $23,289 - $28,301 Personal CSR-under 2 years $18,612 - $20,745 Commercial CSR -- 7+ years $31,110 - $38,542 Commercial CSR -- 2 to 7 years $25,538 - $29,061 Commercial CSR-under 2 years $20,873 - $24,069 Employee Benefits CSR $25,944 - $33,920 These are the national averages, which must be adjusted for regional variations. For example, if the agency is located in a metropolitan area in Illinois, you should take the +10% factor just shown and apply this to the national salary range. To adjust the salary range for an experienced commercial CSR, the computations would be: 1.10 x $31,110 - $38,542 = $34,221 - $42,396. A number of firms use the size of the book of business to determine the salary for Personal Lines CSRs. For example, CSRs handling $125,000 in commissions might get a salary of 20% of that book, or $25,000. If they were to increase the book to $130,000 during the year through expansion and the production of new business, their salary for the next year would be $26,000. In many agencies, Personal Lines CSRs also receive additional compensation for selling new business and expanding existing accounts. Among rural firms, 44% have some type of incentive. This ranges from an average of $11 per policy to 37% of the first-year commissions. More than half of the urban agencies (58%) have such programs, paying either an average of $17 per policy or 37% of new commissions and 5% on renewal. SALES COMPENSATION Producers in rural agencies tend to have less correlation between performance and compensation than their counterparts in the cities. More than one-third of them receive a straight salary, as opposed to only 10% in urban agencies. When there's a connection between sales and compensation, the most popular way to determine the salary level is as a percentage of the previous year's production. Among the rural producers, 37% get commissions or production bonuses in addition to salaries, while 31% of the metropolitan salespeople receive a salary plus incentive compensation. Location apparently makes a big difference in determining who gets either straight commissions or a salary as a draw against commissions. Only 26% of the rural producers have such a plan, whereas 57% of the urban salespeople do. For those who are paid on a commission basis, the following charts present the current average rates. Note that these are nationwide averages and not recommended sales compensation percentages. They may indeed be too high for most firms if there's little house business or if the owners expect the agency to produce a reasonable profit. Some agencies provide little or no backup support to producers, while others have technically proficient CSRs, sales centers, and marketing assistance. These extra support expenses must be taken into account when analyzing sales compensation levels. Rural Agencies Personal Lines New - 43%/Renewal - 25% Small Commercial New - 48%/Renewal - 35% Regular Commercial New - 48%/Renewal - 35% Group New - 51%/Renewal - 35% Life New - 60%/Renewal - 18% Handling Others' Accts 28% Suburban/Urban Agencies Personal Lines New - 45%/Renewal - 26% Small Commercial New - 45%/Renewal - 30% Regular Commercial New - 46%/Renewal - 34% Group New - 49%/Renewal - 38% Life New - 55%/Renewal - 16% Handling Others' Accts 24% In addition to the base compensation most agencies pay for education, Group insurance and business travel, in rural areas 44% provide a car and another 24% give a car allowance averaging $200 per month. Urban agencies provide a car only 18% of the time, although 39% have a monthly allowance averaging $322. Entertainment expenses are covered by 24% of rural agencies and 39% of metropolitan firms. There has been a significant increase in the number of agencies that have employment contracts with their producers. Now 62% of rural agencies report having contracts (up from 53% two years ago), and 77% of urban agencies have written agreements with salespeople (up from 68%). Producer vesting plays a role in 27% of the rural agency relationships and 35% of the city agencies. To get an idea of what expectations agency principals currently have for a new producer, we asked respondents to give us the level of commissions that they'd expect a salesperson to have developed after working for the agency for 18 months. The rural agencies expected a book of $43,925, and the urban agencies were looking for $63,808. MANAGEMENT/OWNERSHIP COMPENSATION The following two charts present the average salary levels, bonuses, and total compensation for the major management positions found in general-lines agency operations. In every single category, the management salaries and bonuses have increased over the past two or three years, sometimes significantly. It's important to note that the average rural agency in this study has only one-third the revenues of the average urban agency, so agency size as well as location enters into the difference in management salary and bonus levels between the two groups. Rural Agencies Salary Bonus Total President/CEO $94,328 $35,795 $130,123 Office Manager 30,612 8,146 38,758 Sales Manager 50,800 12,667 63,467 Accounting Manager 42,603 2,600 45,203 Personal Lines Manager 27,512 3,592 31,104 Commercial Manager 36,123 5,003 41,126 Marketing Manager 31,000 2,000 33,000 Data Processing Manager 31,500 2,000 33,500 Suburban/Urban Agencies Salary Bonus Total President/CEO $109,160 $42,195 $151,355 Office Manager 53,932 8,227 62,159 Sales Manager 61,212 14,840 176,052 Accounting Manager 46,154 8,987 55,141 Personal Lines Manager 35,387 5,872 41,259 Commercial Manager 51,500 5,898 57,398 Marketing Manager 57,108 5,829 62,937 Data Processing Manager 39,594 1,978 41,572 Bonuses make up a significant portion of the income of the president/CEO and sales managers-generally 20% to 28% of the total compensation amount. In most agencies, the people who hold these positions are also agency principals, so it makes sense that the bonus amounts would be higher. Almost 80% of independent agencies nationwide give both owner and non-owner managers a bonus, with most of them paying on a discretionary basis. Of firms that use some kind of tangible criteria for determining the bonus dollars, a percentage of agency profits is by far the most common, distantly followed by a percentage of agency revenues. More agencies are now treating the agency principals as employees first and owners second when it comes to compensation issues. But the vast majority still uses some combination of performance measurement and ownership percentage to come up with salaries and bonuses. The two major factors cited in determining salaries are the size of the existing book and the ownership percentage, with rural agencies favoring the latter and urban agencies more oriented toward rewarding for sales performance. Management contribution is also taken into account in a large number of firms. Regardless of location, the primary criteria for determining bonuses was percentage of ownership, followed by the size of the book handled and management contribution. For both salaries and bonuses, each group indicated that longevity is no longer a major component for determining an agency principal's compensation. When a commission percentage is used to determine the owner's salary, 33% of the rural firms use the same rate used for non-owner producers, 50% have a higher rate, and 17% have a lower rate. The situation is quite different in the urban agencies, where 68% pay owner-producers the same percentage of commissions as they pay the non-owners, while only 11% have a higher rate, and 21% pay a lower commission percentage. It's hard to understand why any agency principal would want to make less money for handling the same job as a non-owner employee, but it might relate to the need to bring new people along for perpetuation purposes. Unfortunately, not enough agencies have perpetuation plans to help them make such a determination. Only 54% of rural firms said they have such a plan, down from 61% two years ago. And 67% of the urban agencies report having taken care of this most important element of planning, down from 71% in the previous survey. The late Carol Hammes, principal of the Middleton Group, was one of the Independent Agency System’s most widely respected management consultants. She will be sorely missed. Reproduced, with permission, from The Middleton Letter.
https://completemarkets.com/Article/article-post/974/AGENCY-COMPENSATION-SURVEY/
Agency Compensation Survey
AGENCY COMPENSATION SURVEY by Carol Hammes Employee turnover is expensive for an insurance agency. For budgeting purposes in the replacement hiring process, you need to add another 50% of the first-year salary for things such as recruitment expenses, training time, errors made by the new person, and productivity that is lost when experienced workers leave. And now a survey published by George S. May, a personnel-management firm, confirms what we all have been suspecting for some time. It is definitely harder to find qualified employees today than it was even five years ago. Applicants have high expectations for salaries and benefits, but their qualifications and willingness to work keeps getting lower. Given the high cost of turnover and the difficulty of finding replacements, it behooves you to do everything that you can to keep the existing employees happy and motivated. Although very few people will leave a job solely for more money, compensation is nonetheless often a key element in their decision to accept employment elsewhere. It is important for agency principals to know with as much certainty as possible that their salary, bonus, and commission levels are competitive and appropriate for handling the designated job functions and responsibilities in their agency. Then, if an employee tries to start a bidding war between the current and prospective employer, you will be able to resist the temptation to play the game. It is rarely a good personnel-management decision to offer more money to keep an employee who has resigned. First, it is clearly admitting to that person (and undoubtedly to other people in the agency) that the owners or managers are not sure that the existing salary administration plan is correct. Second, it sends out signals that blackmail is acceptable behavior because it produces the desired results. Third, all you have really done is postpone the inevitable anyway. It will only be a matter of time before the employee either tries it again or actually does leave, because chances are good that the money issue was only one of the reasons for the resignation in the first place. Over the past 13 years, our primary motivation for conducting Agency Compensation Surveys has been to give agency managers an idea of what other agencies are paying for comparable positions so that they can develop appropriate compensation programs for their own firms. At the bottom of this article are the survey results for 1996. Make sure that you use them wisely. The definition of CSR will vary from one agency to another, as will the functions assigned to producers. The survey results merely present the averages of responding firms that are located all over the United States and Canada. Adjustments must be made for nontraditional job descriptions in your agency as well as for geographic location. Note that the size of an agency has little bearing on the salaries and benefits paid, since the smaller firms must compete for talent with the larger ones in a designated marketing area. Location, however, is definitely important, so we have separated the results for rural agencies from those in suburban/urban locations. A further distinction should be made, based on the part of the country in which the agency is located. A review of the Department of Labor salary data indicates that a number of states have average per-capita incomes that are significantly higher or lower than the norm. The following is a summary of that data to help you revise the national results of the survey to fit your marketing area. +20% +10 % -10% -20% CT DC MA NJ NY AK CA DE HI IL MD NH NV VA AL AZ ID KY MT ND SC SD UT AR MS OK NM WV General Compensation Information The average rural agency responding to the survey this year had $580,887 in total revenues, with 1.5 agency principals and 7.9 full-time employees including the owners. Revenues per employee were up to $73,530 in these firms. There were 2.2 owners in the average suburban/urban agency, which had a total of 14.7 people generating $1,270,563 in revenues and $86,433 in revenues per employee. Between 27% and 29% of the total number of employees in the survey agencies were involved primarily in sales activities, 14% to 18% were in management, and 53% to 59% of the total employee group were mainly handling service and support functions. The average reported increase in agency salaries was 3.8% in the rural firms and 3.9% in the urban agencies. Over half of the firms said that their percentage increase was the same as it had been the prior year, while one-fourth reported paying a higher increase this year than last. For the past three years, our survey results have indicated that agency raise levels seem to have stabilized near the 4% level, less than the average agency revenue growth rate (which has been between 5% and 7% during this same period). As a result of the positive variance between raises and growth, the total percentage of revenues being paid out to the agency owners has increased steadily over the past several years. Principals in rural agencies took out 26.9% of revenues in compensation and showed a pretax profit of 10.8% in 1996, an ownership return ratio of 37.7% Owners in the often larger urban agencies received compensation of 23.7% of revenues and profits of 8.2% of revenues, for a total return ratio of 31.9%. Non-owner producers received between 13.1% and 15.4% of total revenues, while the managers and office staff were paid 20.6% of revenues in rural firms and 21.6% in metropolitan agencies. Total agency incentive bonus plans are now being used to supplement or replace standard raises in 48% of the rural agencies and 59% of the suburban agencies. Of those firms using such an approach to compensation, more of them base the formula on agency profits than any other single criterion. Increased productivity (usually as measured by the improvement in revenues per employee) is the second most common determining factor. Contingents enter into the bonus more often in rural firms than they do in urban agencies, where revenue growth is used more frequently to help determine the amount of the bonus pool. Most of the suburban/urban agencies (93%) provide group health insurance coverage for their employees, with 88% of them picking up the tab for the employees and 30% paying for dependent coverage as well. Only 71% of the rural agencies have group health insurance available, although 96% of them pay for the employees and 35% pay for the families. Retirement programs are also more common in the city agencies, with 77% having some type of program versus participation from only 56% of the rural firms. Just 10 to 15 years ago, most agencies had profit-sharing or pension plans to which they were often contributing 15% of covered payroll, but the soft market conditions have taken their toll. Today a 401(k) program or SEP/IRA with modest matching percentages of less than 5% is the most common retirement plan. Service Staff Compensation Levels The following charts present the average salary ranges for the major service positions in insurance agencies in 1996. The ranges for the higher paid positions are broader than the others because of the wide variation between expected levels of technical expertise between one firm and another. 1996 Rural Agency Service Rep Salary Ranges Position Salary Range Personal CSR - 2+ years $17,623 - $21,558 Personal CSR - Under 2 years $13,802 - $17,281 Commercial CSR - 7+ years $25,568 - $34,991 Commercial CSR - 2 to 7 years $21,053 - $24,736 Commercial CSR - Under 2 years. $16,200 - $20,167 Employee Benefits CSR $22,175 - $27,636 1996 Suburban/Urban Service Rep Salary Ranges Position Salary Range Personal CSR - 2+ years $24,885 - $27,617 Personal CSR - Under 2 years $17,253 - $20,019 Commercial CSR - 7+ years $30,188 - $38,690 Commercial CSR - 2 to 7 years $23,469 - $27,439 Commercial CSR - Under 2 years. $20,275 - $23,581 Employee Benefits CSR $23,603 - $33,061 Most agencies still give their customer service reps a base salary, with 44% of rural agencies and 55% of urban agencies augmenting the personal lines salaries with some type of sales incentive. Those that pay a flat amount per policy averaged about $15 in the urban agencies and $8.50 in the rural agencies. More agencies use commissions as the determinant, with an average rate of 35% to 39% on new business and nothing or a much more modest percentage on renewals. A number of agencies are now establishing the CSR salary level using the total book of business handled by the person, thereby rewarding both the retention and the new sales activities. The percentage usually varies between 20% and 25% of the prior year's commissions. For example, assuming an average commission rate of 22%, a personal lines CSR that handled a book of $110,000 in commissions this past year would have a salary for the next year of $24,200. To get a raise at the end of the year, she or he will have to increase the book over that $110,000 level. At an attrition rate of 8%, this person would have to sell $8,800 in new commissions to receive the same salary for the next year. If $20,000 in new commissions were sold and the retention rate on the existing book was 92%, the salary would go up by $2,464. This approach can work well, but only up to the point of saturation. Few personal lines CSRs can effectively service a book of more than $150,000 in commissions and also write much new business. There may come a point in time when the really good people are maxed out and they start to see their income shrinking. Then you will have to figure out an equitable way to redistribute accounts to other CSRs or to start delegating some functions to Assistant CSRs and develop a compensation program that will take into account the relative contributions of everyone involved. AVERAGE MANAGEMENT SALARIES RURAL SUBURBAN/URBAN 1996 Salary + Bonus 1996 % Bonus 5 Yr. Avg. Salary + Bonus 5 Yr. Avg % Bonus 1996 Salary + Bonus 1996 % Bonus 5 Yr. Avg. Salary + Bonus 5 Yr. Avg % Bonus President/CEO 108,034 31.4 94628 29.5 145119 32.8 136995 33.0 Office/Adminstrative Mgr. 36,364.00 11.4 40146.00 16.7 49137.00 15.5 52447.00 19.1
https://completemarkets.com/Article/article-post/1520/GENERAL-OSHA-RECORDKEEPING-REQUIREMENTS/
... Lodging Places (SIC 70); Repair Services (SIC's 75 and 76); Amusement and Recreation Services (SIC 79); and Health Services (SIC 80). EMPLOYERS NORMALLY EXEM...esearch, Management, and Related Services 88 Private Households 89 Miscellaneous Services These exemptions do not excuse...
https://completemarkets.com/Article/article-post/517/E-Mail-Marketing-Dont-Test-%E2%80%94-Survey/
E-Mail Marketing: Don't Test — Survey!
Because of its incredibly low cost, e-mail harbors a temptation that doesn't exist with other media: Forget caution and prudent testing; toss as many e-mails against the wall as possible to see what sticks. Patricia Berry helps you to determine what to emphasize in your e-mail advertising.
With the low cost of sending e-mails, people rationalize, saying, “What's the harm (besides wasted time and consumer complaints) in just trying everything and hoping that, eventually, some of it will work?”
The ease, speed, and low cost of testing offers and copy on the Internet means that many companies are basing their marketing decisions solely on opinion, rather than on customer behavior, data profiling, and controlled testing. In other words, they're approaching marketing as an art rather than a predictive science. The reality is that this haphazard process can cost lots of money.
Here's a quick example: You want to test three different price points for a product: $11.95, $14.95, and $19.95. To do so, you blast 1 million e-mails for each price point, resulting in 59, 32, and 20 sales, respectively (It's not surprising that the lowest price point generated the greatest number of sales). In dollars, that comes to $705.05, $478.40, and $399.00, respectively.
Here's the kicker: Let's say that your all-in cost of goods to manufacture the product is $6. This means that your gross margin at $19.95 is 70%, compared with 59% at $14.95, and 50% at $11.95. From this, you have to deduct the associated CPM and e-mailing cost to complete the analysis. Ultimately this will lead you to a volume versus margin decision and, in my example, the highest price point will probably win out. Unfortunately, you've burned 2 million e-mail addresses to come to this conclusion.
So how do you determine which offer to roll with or what copy points to emphasize in your e-mail advertising, in order to produce the highest and most margin-efficient conversion rates? Is it experience gained from other channels, such as direct mail? Do you conduct customer focus sessions? Do you count on creative suggestions from your marketing organization? Or do you simply rely on gut instinct and common sense?
The answer is predictive modeling.
Ironically, because of the ease of using e-mail and the speed with which offers can be distributed and evaluated, predictive modeling is significantly less expensive than with other media channels, such as direct mail.
One of the easiest, most powerful, and valid techniques to help predict responses and conversion rates with return on investment (ROI) metrics is the e-mail survey. Surveys can be constructed quickly and inexpensively to test pricing options, copy, and offers. You can send them to your existing customer base or to prospects to confirm or refute assumptions.
The size of the survey pool doesn't have to be massive to obtain statistically relevant information, either. Just 100 valid responses (not numbers sent, but actual valid responses) from a good list indicative of your customers will provide important data to help your marketing and creative team improve their strategic decision process and, ultimately, the success of your e-mail campaign. That's right, you need only 100 responses. Think about it this way: In a national election, only 700 people are surveyed to predict the outcome.
When constructing a survey, try to limit it to a few important questions. For example, we recently sent an e-mail survey to find out if more consumers were apt to buy a single product at the lower price of $19.95 versus paying $29.95 for two products. Much to our surprise, 70% of the survey respondents selected the $29.95 deal. This shaped our creative processes and was the offer that we ultimately rolled out.
Whenever you do a survey, tabulate the data and restate it in comparative percentages to provide an easy method to analyze the findings. Compare apples to apples.
To engage consumers to participate and respond to surveys, we sometimes incorporate involvement devices such as contests, sweepstakes, or inexpensive gifts. Where we've used these devices, we've kept our total costs under $3,000 while still producing tremendous participation. Clearly, surveys incorporating involvement devices are an extremely effective way to quickly engage tens of thousands of prospects in, literally, 24 hours.
Think of how inexpensive this is in comparison with the risks of rolling out an advertising campaign with untested creative. It also offers an opportunity to learn how people think and behave by the comments they make, because surveys can be used not only as a way of gaining critical insights and tactical knowledge, but also as a hybrid marketing tactic.
Survey respondents who identify their interests and behaviors are often quite willing to consider marketing opportunities matched to their needs and wants. Sometimes we determine this by ending a survey with an opt-in question asking whether they would like to see an opportunity that addresses their needs. We've seen cases in which more than 50% of prospects have responded affirmatively.
As a direct marketer who has worked extensively in every other media channel, I've learned that using e-mail surveys allows you to quickly and inexpensively reach tremendous numbers of prospects to gain instant feedback, test creative assumptions, reduce risks, and increase revenue.
Try it yourself before launching your next e-mail campaign, and don't be surprised if you see results improve by at least 10%.
https://completemarkets.com/Article/article-post/698/Customer-Service-Mickey-Mouse-Style/
Customer Service, Mickey Mouse Style
Ask most agency owners what distinguishes their firm from the competition and the answer is almost always, 'We give the best service.' Yet if you ask them what they mean by 'service,' they have a hard time giving an explanation.
I've always found it amazing that in an industry where we constantly claim that we sell 'service,' we have no common words to define it, no standardized system to measure it, no performance guidelines to enforce it, and no evaluation system to monitor it. More than 65% of the CSRs I've surveyed say they've never attended a workshop or read a book on customer service skills. What's even more astonishing is that the main quality control system for customer service in the agency business is Errors & Omissions insurance.
As an industry, we need to do more and do better at service. We should take lessons from customer service leaders like the Walt Disney Co. Disney theme parks get consistently high marks for service, despite the fact that they deliver that service via a young, minimum-wage staff who work in the blazing sun amid continually changing, technically sophisticated attractions, and which cost guests more money in a few hours than most of them earn in an entire week.
To further credit Disney, realize that they serve thousands of first-time customers each day plus thousands of repeat customers who expect more and better service with each visit. Our job seems pretty easy in comparison. Our agencies sit in the same locations for decades with the same staff, same customers, same companies, and virtually the same product. Yet we lose customers due to poor service. How does Disney do it?
I believe Disney and similar firms do what they do because they integrate customer service into their operation. For example, look at their hiring practices: Before Disney even considers hiring someone, the prospective employee must go through an elaborate screening process, agree to certain grooming and conduct restrictions, and sit through presentations on customer service philosophy and the Disney corporate culture. The majority of people who go through the pre-employment screening process never actually apply for the job. Disney is OK with that. Actually, Disney is more than OK - they're delighted. They want to hire people who are not only willing to do the Disney job, but who also are willing to do it the Disney way.
The first training every Disney employee receives - from CEO to street sweeper - is in customer service. Learning how to bake cookies, sweep sidewalks, or operate attractions is always secondary to customer service. In fact, technical skills augment customer service skills instead of vice versa. I know of no agency that spends time and/or money sending producers to customer service training. Why would we do a thing like that?
Now that's an interesting question.
In an agency, new service staff are usually directed to the largest stack of undone work, and that's what they learn first. This sends a powerful message that the importance of the work outweighs the importance of learning the agency way of delivering customer service.
Few agencies integrate the concept of customer service into new-employee orientation, staff meetings, or in-house training. If in-house training even exists, it's most often conducted by the agency owner, who probably has never studied customer service techniques and never functioned as a CSR. Knowing what you want other people to do and how you want them to do it is very different from being able to effectively teach them the necessary skills and motivate them to learn.
Attitude counts. Newspapers aren't sold on Disney property because the company doesn't want guests to be in a bad mood from reading negative articles. What do we do to focus on positive attitudes in our agency? How do we motivate our staff members?
Being friendly is important. Guests at Disney continually fill out satisfaction surveys listing the costumed characters as the most friendly contacts in the park. This is truly amazing because the actors who portray Disney characters are forbidden to speak while in costume. Apparently, it's possible to project a friendly, caring, and fun attitude without saying a word! I wonder if we've helped our staff members to understand that? Have we told them that appearance, grooming, listening, and organizational skills send a powerful message to customers? I wonder how our staff would rank if our customers filled out such surveys.
Although insurance isn't amusement and we aren't the Disney corporation, we can and should focus more time and attention on customer service excellence. Start by creating an agency that has customer service as its core. Root everything the agency does, on a collective or individual basis, in the service delivery process. When instituting new systems or revising workflow, ask how this will make things better, faster, or easier for the customer. If you can't readily answer that question, go back to the drawing board and think again.
Customer service requires monitoring. You can't assume that 'no news is good news.' Most customers who leave an agency because of poor service never tell anyone why they left. Design a system for customer feedback into your agency operation. Communicate to customers often - about ways in which your agency is working to improve its service delivery or about what you're doing for them that's new and different from your competitors' activities.
Most of all, work at maintaining a high level of staff motivation. Use learning, sharing, discussions, rewards, systems, support, and feedback to keep your staff fresh and enthusiastic in their efforts. Heroic efforts require strong and motivated individuals. If that doesn't describe your staff, get to work!
Grow big Mickey Mouse eyes and look around! Observing how service can be delivered helps you realize that what should be done for customers and what's actually being done are often two different things.
Use your Mickey feet to get out and gather customer service resource and reference materials. Go to the library, the bookstore, the video store, and the Internet. Travel the customer service road and look for answers and ideas.
Use your Mickey nose to sniff out mistakes and bad practices before they affect your customers. Who's responsible for them doesn't matter as much as correcting them. Keep a heads-up attitude in troubleshooting your agency's customer service practices and workflow systems. If you have a weak link, someone you feel isn't as good with customers as they should be, deal with it now. Bad habits spread, and your lack of action to address the problem sends a loud, clear message to your customers that you believe mediocre service is acceptable.
Lastly, make sure you aren't that weak link. If you're a manager or lead CSR, just preaching the old 'Do as I say, not as I do' sermon won't work. If I've learned one thing in my 30 years in the insurance industry, it's that if CSRs don't see customer service as being a top priority of their supervisors and managers, it'll never be a top priority for the agency. Be careful to set a good example and show respect and regard for every customer every time, especially when CSRs are observing your personal approach to service contacts.
Roll up your sleeves, managers and owners: It's time to take charge of improving customer service in your operation. Remember, when it comes to establishing and maintaining a high-quality customer service culture, having a Mickey Mouse approach might not be a bad thing.
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