Friday, March 4, 2011

Entitlement and Agency Development

Recently, I spoke to a wonderful group of Human Resource executives. The group from the Houston area known as the Bay Area Human Resources Management Association (BAHRMA) met to “sharpen their saws.” I was asked to participate and shared my thoughts on Strategic Performance, its value and how to get it.
During the presentation a young lady raised her hand to comment and told of a situation that echoes around our country, today; She told of an attitude of “Entitlement with which they struggle.”
The “Big E,” as we call it, is when employees express their belief that others and the organization to which they belong, are somehow blessed by their presence. Often there is no evidence supporting their right to a favored state, just a belief in their own minds that they, somehow, deserve special treatment, recognition, pay or all three.
She put it like this; “We are consistently faced with younger employees believing that we (older employees and the company) are somehow fortunate in our association with them.
They come to work late or miss deadlines and believe it to be Okay,” she says. “It seems, as if, they believe the organization should be thankful that they decided to come to work, at all.”
The Entitlement attitude seems to be more prevalent among younger employees. Our experience has been that many of the Generation Y employees do, somehow, believe that they have a right to a job. A belief, I support, at least in part. I believe that there is work for anyone who wants to work, not necessarily the work you may want, but work from which you can earn a living. That does, somewhat, differ from the Generation Y notion.
So, what can or should you do about an attitude of entitlement, whether it comes from Generation Y employees or elsewhere? We believe that corporate America is in control and if the attitude of Entitlement is an issue, in your company, you can do something about it. Here is what we recommend:

  1. Clearly state expectations before you hire anyone.
  2. Get agreement before you hire
  3. Have a “Zero Tolerance Policy”
  4. Operate with integrity

Many organizations complain about poor attitudes but shoot themselves in the foot by not being clear about the values of the organization, their expectations of the employee and enforcing their own rules. Organizations should know their values and clearly share them with potential employees, but few do, they should create a “Top Ten Reasons People Work for XYZ Corp.”, A Values Statement, and a clear, easy to read statement of expectations in the job a candidate is being asked to fill. Get them to sign and date those documents and keep them as a permanent record that the candidate acknowledged your expectation and agreed to them. That document should go in the employee file.  That takes care of item 1 & 2, now lets talk about the rest.
Many organizations want people who have a great attitude, many do not, but it is their own fault. They continue to believe that they can put into someone something that is not there, hire someone that is marginal, and somehow expect superior performance. That seldom occurs. The key to having the right people and attitudes on your bus is hiring excellent people, in the first place and realizing we are all human and make mistakes, sometimes hiring the wrong person. When you hire someone who does not wish to adhere to something they agreed to before the hiring and obviously the wrong person for the job, fire them. That takes care of 3 & 4 above.
Applying these four simple rules will, I guarantee, diminish the number of employees that believe they are entitled to their jobs, but most importantly, send a clear message to the many people in your organization that you value their good work ethics and operate with integrity.

Saturday, October 23, 2010

The Value of Customer Service-What Would You Do With An Extra Half-Million

Much attention is paid to sales and selling in the insurance industry, yet as much or more money is made, each year, through the enhancement of customer service. Ultimately, customer retention becomes as important as new business sales. I know some of you are skeptical so I am going to walk you through a hypothetical case.
Your agency is composed of 1000 personal lines accounts (I know it is small but it is for illustration purposes only). Each account is comprised of 2 autos and a home (3 pol/ account). Total annualized premium per policy is $1000 (all very conservative numbers). You add about 200 policies a year and your lapse ratio is about 8 percent a year (again very conservative). Average commission on new business is 15% and renewals 10%. 














Hypothetical Agency Results

New Business Commissions = 0.15 X 200pol/yr X $1000/pol = $30,000
Renewal Commissions = 0.10 X  3,000 pol X $1000 premium= $300,000
Total Income                                                                        = $330,000
Lost policies @8 % lapse  (0.08 X 3200 policies)                   =  256
OR 256 X 1000 X 10%  = Lost Income                                 =  $25,600
If that occurs over 20 years total commissions lost           = $512,000








Point! Saving policies and policyholders is as valuable as getting new ones. The question is; how can you minimize lapses or maximize customer retention?
The GMS 5 Step “Take Your Breath Away” superior customer service model:

1.     Know what superior customer service would look like and know why your customers would consider it superior. Remember there are many GOOD Agents/Agencies. You have to be better that them to make a difference.
2.     Know what attributes among people would likely characterize superior customer service people. Not everyone is capable of delivering superior customer service. Get this book on Hiring, it will help, Strategic Hiring 
3.     Develop a system that delivers “Take Your Breath Away” customer service. Have everyone follow it.
4.     Give your customer service people what they need to deliver superior customer service. Empower them with expected authority to solve the customer’s problem
5.     Give them Lagniappe. Give them something extra. They believe they deserve something for their trouble, give it to them.  

Finally, remember customer retention brings advantages to your company in more ways than one. Here are three additional ways your company might benefit from “Take Your Breath Away” customer service:

·        Increased cross-selling success and a larger share of the customer
·        More agency apostles-more people telling other people about you
·        Reduced marketing costs-selling to existing customers is the easiest sale

By making a few small changes you can increase profits by 25 percent, or more. Hire better people, give them a better plan and TAKE YOUR CUSTOMER'S BREATH AWAY !