John Caddell's blog

Yesterday I wrote that companies need to be more proactive with customers–helping them understand what they’ve bought and, particularly in the case of subscription products, helping them reconfirm on a regular basis that their package is appropriate.

This almost never happens. And it’s a time bomb for providers. People’s needs change over time, and the longer they are a customer (a delightful situation for providers), the more likely their needs have evolved while their subscription has stayed the same. Then, if an event occurs where needs and offer collide–say an insurance claim scenario–it’s very likely the customer will be surprised, at a very sensitive and emotional moment.

But isn’t it the customer’s responsibility to make sure what he’s paying for fits the bill? As long as I disclose everything, haven’t I done my job as a supplier? That is a valid way of looking at the issue.

Yet the world has changed. People are busier. Two-worker households are the norm. Customers are buying more exotic products and lack the expertise to check them for fit–especially if it’s something rarely put to use. And customers will blame their supplier if things work out poorly. They will consider canceling their service, and will tell their friends.

Seems like a pretty cut-and-dried situation to me. Take care of your customers by helping them buy subscriptions that fit their needs, or take your chances.

I have several commercial insurance policies that I renew regularly and pretty much automatically. I do think, from time to time, that I should review those policies with my agent to see if I am properly insured. But I don’t—because I don’t have time, and auditing my insurance coverage is something that takes a back seat to, for example, marketing, client work and collections (never mind family time!).

Customer service used to mean responding promptly to customers’ requests and resolving the issues they brought up quickly and effectively. No more. In today’s time-constrained, overcommitted world, customer service means reaching out to customers, diagnosing their unstated anxieties and proactively putting measures in place to deal with the problems they worry about.

Let me continue with my own example. Say I had an incident that caused me to file a claim, and I learned through that process that I was underinsured in that area, and my insurance, contrary to my expectation, would not cover all the loss. What would that mean for me, my agent and my insurance provider?

For me, it would be costly and perhaps painful. I would likely get pretty angry—with myself, for one, but also with my agent. She has been sending me renewal notices for years and dutifully cashing my checks, but has not sought me out to review my needs and update the policies so I am adequately covered.

And my response, very likely, would be to change agents and insurance carriers.

This is reality in the insurance industry and many industries today. We have become distanced from our customers. We don’t understand them the way we used to. At the same time, customers have more demands on their time, so they need our guidance more than ever.

As a result, our customer relationships are fragile and prone to break with any misstep. What to do?

The first step is to realize that silence is not the basis of a productive, long-term customer relationship. A signed renewal and a check do not signify a satisfied, well-cared-for customer.

Next, seek out opportunities to ask customers what they think—about your service, about the industry, about their futures. This can be done through interviews, when customers call, or scheduled as part of the renewal process. Company blogs and Twitter are another source to gather customer stories. Don’t only ask for good things; seek out the negative thoughts customers have as well. (If you know something is wrong, you have the possibility of fixing it.)

Collect the stories, put a team together and immerse yourselves in them. You’ll see patterns. I guarantee you’ll be surprised by some of the things you find out. A group of customers may be unhappy with one aspect of your service. New business areas may be emerging that require different insurance products. Competitive awareness may be on the rise.

Finally, take action. Use the insight you learned from the stories to make meaningful changes in your business. (Focus on experimentation rather than “grand planning and initiatives.”) Your marketing department will be delighted to talk about these changes, which respond to things customers actually want and need!

Imagine that the following happened: My insurance agent called me and said, “Before we renew, let’s review your policy and make sure you have the right coverage.” We looked through all my policies, and made some adjustments. When the incident happened, I was completely covered, thanks to the review.

Not only did I not cancel my policy, I actually recommended my agent to several friends.

How much is that worth?