Blog by Jason Brown, Principal and leader of the Financial Services practice with ZS Associates, a marketing and sales consulting firm.
Follow Jason on Twitter at: @jbrown_ZS
Customer experience is a hot topic among insurance carriers, with customer satisfaction, loyalty and word-of-mouth advocacy gaining a lot of momentum in recent years. And rightly so—these gauges of engagement track closely with sales results, and often foretell shifts in future results. But one customer has been largely ignored by this recent trend: the insurance agent.
Programs that monitor the experience of policyholders and B2B customers are common among the insurance companies I work with. But far fewer have robust experience tracking and measurement programs focused on agents, brokers and other intermediaries.
How odd, given the relative influence of agents on the customer experience: A disappointed customer can certainly build ill will and deliver negative references to other potential customers, but a disgruntled agent can affect customers, other agents, and his or her own production. The agent definitely has a broader impact.
Quantifying the impact. To better gauge the impact of agent satisfaction and loyalty, we partnered with an insurance carrier to survey more than 1,000 of its agents. The survey asked a variety of questions, including about overall satisfaction and advocacy—the likelihood of recommending the carrier to a customer or colleague (the foundation of the Net Promoter Score metric).
We took the survey results and quantified the direct impact of agent satisfaction and advocacy—looking specifically at how these measures correlated to future production.
We found that agents who had positive perceptions about their experience were far more productive: Agents who submitted high advocacy ratings produced thousands more in additional premium in the six months following the study than agents with low advocacy ratings. (This finding held up even when we controlled for differences in tenure, past production, and geographic location.) Furthermore, the productive effect of positivity was exaggerated among the newest agents: The satisfaction and advocacy scores had even greater predictive power for agents in their first year working with the carrier.
This direct impact—reflected in the agent’s own sales production—is only the tip of the iceberg. Once we factor in the spillover effect on customers, prospects and other agents and intermediaries, the impact is magnified. Agent experience, and the satisfaction and advocacy it engenders, is a critical area of study for any distribution organization.
Of course, quantifying the impact of agent satisfaction and advocacy is only part of the solution. Insurers still need to determine how to deliver a good agent experience and build positive and lasting relationships. For more ideas to this effect, check out our ZS-IBM report on agent and carrier relationships. Although no single path will lead to success, establishing and tracking the agent experience and resulting satisfaction and advocacy is a good first step for all carriers.