If you invest only insurer in bringing in new customers? Then it's time to turn the tide. No profit no satisfaction and no satisfaction without happy employees. That is the idea of the service-profit chain : make a connection between employee and customer on the one hand, and profit and growth on the other.
What is the service-profit chain?
The service-profit chain model has been around for at least 20 years and was developed by James Heskett. The steps in the model are the result of research into what one organization is more successful than another. The chain makes a connection between the loyalty of employees and customers and profits. The model consists of a number of links (KPIs) that add sequentially with each step successfully, and ultimately complete the circle:
All steps are buttons to turn to. When everything an organization is in the correct position, which will yield profits and growth.
Maximum committed staff provide very satisfied customers
One step can not do without the other. What stands out in the service-profit chain is that the initial steps involve the employees. Internal commitment precedes external success. Or: you can not expect loyalty, profit and growth as the internal base of an organization is not solid.
Gain is a side effect of doing something really good.
To employees should be given the same attention as customers. If employees feel involved, they will be more productive. Thus they provide a better service, they are excited, they carry this more outward and create a positive image. This has a positive effect on recruitment and retention of customers.
The cook in this video is a good example of a committed employee. His friends jokingly say: "Are you really going to work in a hospital?" It turns out a job in a service-oriented hospital where employees perform special work. The cook appears to be a true ambassador for the hospital. (If you do not want to watch the whole video, then look from 2m51s).
Committed employees create value, value creating satisfied customers.
Why this model in the insurance industry?
Insurers are struggling to differentiate themselves. The premium can not down. With an insurance product as such it is difficult to stand out. At the same time there is a need from insurers to jump out to recruit and increase the conversion of new customers. Incorporating the service-profit chain in the organization can help.
Profit is not the ultimate goal
If current clients are well served and get a proper service, that is a better investment than any marketing budget whatsoever. Usually the marketing budget five times higher than that for loyalty.
If you purely investing in marketing to win new customers, they run there at the back just as hard off. A customer that you've put a lot of energy, is not profitable if he again gets within a year. With the rapid transition structure within the insurance industry customers have a short life and they cost money. The 5: 1 ratio between marketing and loyalty should actually be reversed.
In the service-profit chain profit is not the goal, but the result. The goal is to be very good in all steps of the chain. Then come - and even more importantly, keep - customers themselves. Of course compares the customer on price, but really do compete with spot-on service . Two-thirds of customers drop out at poor service. This is where you as an insurer can distinguish still on.
When an employee is committed?
No value without internal quality, but if an employee is really happy and productive? For this must be given to the individual role of the employee. So apart from the basic tools, a fine company and bonuses: what a worker to do a good job and be an ambassador of the organization? It is important to really know people and their needs.
An example of a committed employee and the creation of a positive image can be seen in the following video. The employee is ' empowered ' by his employer. He may take the liberty to take action itself (with a budget).
Southwest Airlines is in the top 10 best workplaces in the US and is already 21 consecutive years of profitability.
Improved operations, more loyal customers
The service-profit chain is an opportunity for insurers to improve operations. Without a no b and b without any c. Each step is a prerequisite before any profits. Company employees are thus the key to customer satisfaction and loyalty.
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