Most of the insurance technology industry sells business-to-business (B2B), not business-to-consumer (B2C). Since the customer is a business and not an individual, customer satisfaction is a plural not a single measurement. More specifically, there is seldom one person at the customer who represents the totality of what the customer thinks of the product or service being provided.
This comes to mind because I was reading Donald Light’s recent post on the Celent Insurance Blog in which he laments a vendor not knowing the mind of any customer given as a reference. He cites the example of one reference he called who gave such a negative opinion that Donald was left to wonder:
How could the vendor not know, in general, what the reference is thinking–and knowing that, just give another reference?
It’s a reasonable question. But this leads me to think of the underlying and even more important issue than references – customer satisfaction. It’s hard to measure in B2B situations because there are many opinions that matter. There’s the opinion of the customer’s project manager charged with getting the product or service installed and operational. There’s the opinion of the users who actually operate the system or service to be installed. Then there’s the opinion of those who use the reports and other outputs of the system or service (and they are sometimes different than the users). And, of course, there is the executive whose budgetary approval paid for everything – that opinion matters, too, eh?
It is no easy task to monitor and measure all these opinions. Yet, they are all important. Although it’s a more difficult challenge, I think insurance technology vendors should make sure they study customer satisfaction from all customer perspectives that matter. Only then, can you be sure you know what you need to know. Building a product or service and not building along with it an effective system for hearing the voice of the customer at every level is missing the best opportunity for further value creation. This is because customer satisfaction monitoring not only tells you how you have done (in the past), it also tells you how you can do (in the future). And that can lead to even more customers.
If you manage customer sat effectively, then managing references is simple: you just say that people can call any of your customers and ask what they think (not just some select list of references that you’ve pre-approved because you know they’ll say good things). Sure it’s a gutsy move, but it’s far more persuasive than any other form of customer reference.
Tags: Customer Satisfaction, references, sales
December 11, 2008 at 9:04 am |
Mike – this issue keeps me up nights – as we are a BtoB business model – there’s two thoughts I’d pass along – our management team subscibes to the customer satisfaction logic outlined in the book ‘The Ultimate Question, by Reichheld – a former Bain exec —– its unnerving to ask your clients to answer the question – but it provides the clearest feedback I’ve found – second, we hire a marketing firm to call and ask our clients how we’re doing – the comments collected in the interviews are not attributed back to the client unless they agree that the source of the comments can be identified before the interview starts – we tell our clients the calls are coming – ask their permission to have the call made – and we usually get all of the folks we ask to agree to take the call – I create the call list – and my goal is to target those clients we think may not be satisfied, or don’t have as much contact with -
December 11, 2008 at 9:23 am |
Jeff, I commend you for your courageous approach and I am sure your company is the better for it. I sit on the board of a company backed by Bain and headed by a Bain executive. The NPS is a standard part of their reporting system and is an essential aspect of how they think about all that they do – so it’s more than trendy business book rhetoric. “Would you recommend us to a friend” is indeed the ultimate question that matters when it comes to customer satisfaction. Once a company has worked up the courage to always be asking it, the challenge still remains to identify all those individuals in the customer organization who need to be asked in order to have the fullness of the business customer view – buyer, user, technical, executive.
December 15, 2008 at 4:47 pm |
Mike –
An interesting take on references, customer sat and NPS. A few comments: 1) Suggesting that prospects call just any customer is probably not realistic. You’ll need the customer’s permission first (unless the prospect has access to customers’ contact info); 2) Sometimes prospects – or the media, or analysts – actually want to talk to references, to find out what they like about a vendor’s offerings in the course of performing due dilligence; 3) As Donald Light’s post shows, you DON’T always know what your supposed references are really thinking; and 4) As Fred Reichheld’s work shows, references (or “promoters”) are extremely valuable to a firm. It makes sense to organize the effort to help them do what they tell you they’d like to do – promote your business.
All of which argues for creating an organized, staffed customer reference program. What is interesting to me is that you see these in technology firms – Microsoft, Intel, Dell, SAP, Oracle, etc, etc. HP, for example, has some 80 or so reference professionals in its global organization. The field has become so important that Forrester REsearch (perhaps the highest profile research firm in IT) has started covering it.
Yet you don’t see organized reference programs in the insurance B2B industry, as far as I know. Just curious as to your thoughts on that.
All the best,
Bill
December 15, 2008 at 5:22 pm |
Bill,
Thanks for the helpful comments. Given your organization (www.customerreferenceforum.com), you obviously have a depth of perspective on the issue – born of much thought and experience. The challenge for the insurance B2B industry to achieve that level of focus on the subject is that few, if any, of its companies have the kind of scale enjoyed by the names you mention. Thus, even if they have a very strong attraction to the subject matter they are not likely to have on staff “customer reference professionals.” Everyone’s who working on customer reference has a day job. Therefore, if programs are crafted that allow firms to implement without lots of dedicated staff, they have more chance of being implemented. The other key point I’d reemphasize is that customer categories (e.g. executive, user, technical, etc.) have to be identified because in B2B one person can seldom speak for the customer when it comes to satisfaction.
January 6, 2009 at 5:25 pm |
Mike, this is an interesting discussion. Our ACE Rankings (Average Customer Experience) are designed to address this point exactly. Check out http://www.novarica.com/acerankings.shtml or, for an example of a full report, see Guidewire (http://go.guidewire.com/content/NovaricaAceRanking2008) or iPartners (http://ipartners.net/documents/ACE-iPartners-Insurance-Scorecard.pdf)
January 9, 2009 at 2:41 pm |
Mike – I like your thoughts. We do IT services sales B2B and as you have mentioned in your post, we work with teams (inter departmental and cross functional, with each sub team or individual having their own agendas) and are many times caught in the cross fire.
When we ask our customers about their experience with us, we get tremendously puzzling responses – most we cannot make any sense out of.
A measure of customer satisfaction in a B2B environment that we have sort of informally adopted is the feedback from the people whom we actually work with – the day to day guys, rather than the top CIO, even though the reference of the CIO matters the most. For internal audit purposes, that is the feedback we go after.
Siddharth
CEO – InfoBeans
http://www.infobeans.com
January 9, 2009 at 4:28 pm |
Siddarth, why not try including a question or questionnaire in your bill?