A dozen years ago, having churned through a few insurance companies and having tired of it, I was complaining to a friend. He happened to be an Amica customer and strongly recommended that I look at Amica. I did, and I have been a loyal customer ever since.
Amica has always relied on word-of-mouth referrals as a powerful acquisition tool, and this is possible only because of the company’s commitment to top-flight customer service. This reliance makes Amica’s existing customers strong advocates for the company. Interestingly, Amica executives have found that customers who come through referrals have significantly higher long-term loyalty and, therefore, lifetime value, than customers acquired through other means.
It is widely recognized that when “CRM” efforts “fail,” it is often because companies look to technology to provide a silver bullet and are disappointed when it fails to deliver. Companies are often seduced by software offerings that promise to make marketing and CRM easy, with their pretty, seemingly intuitive interfaces. When faced with the urgent pressure from software salespeople eager to make their quarterly numbers and willing to discount the product at month’s end, companies sometimes give short shrift to the need for well-developed business cases, cultural readiness, organizational preparedness and the process design that should precede a software purchase.
Yet, Amica is a company that seems to have gotten its sequence and priorities right. Amica is a medium-size insurance company that sells direct to its customers, unlike the traditional insurance industry model of selling through agents. This gives Amica a great deal more control over the customer experience, which it manages exceptionally well, in an approach that has been refined over decades.
Amica was ranked highest among all auto insurance companies in J.D. Power and Associates’ latest customer satisfaction study for the seventh year in a row. Amica scored the highest possible rating on all four of the dimensions that J.D. Power measures.
Culture
How does Amica do it? The driving force behind its consistent high performance is the customer-centered culture.
Great customer service does not happen by accident, of course. It needs a tremendous amount of top-level executive commitment, as well as a culture of service that extends through all parts of the company, not just the call center folks. It also requires good processes and a strong underlying information infrastructure.
One thing that has always struck me when I call Amica for service is that my questions or issues are almost always resolved with a single call. The customer service reps (CSRs) always seems to have ready access to all of the information about multiple policies, knowledge of the decision rules and the authority to make decisions while being on the phone with me. They have a singular view of the entire relationship with each customer, but they don’t rely on fancy CRM tools that prompt them to cross sell products or ask for this or that information.
‘My questions or issues are almost always resolved with a single call.’
The CSRs are trained to look for gaps in the information and fill them but only if the customer seems to have the time. The mandate is to treat the customer with respect and dignity. To this end, Amica consciously caters to customers who value the service, not folks who are just shopping around for the best deal.
The primary insight here is that companies that delight their customers (USAA is another great example in the insurance industry) tend to have the right culture, design great processes and train their people to have the right attitude and leverage the appropriate information. Then, and only then, do they invest in technology to support this overarching business focus.
This is not to minimize the importance of technology. Technology is a crucial underpinning to success, especially when seeking to provide consistent experiences to millions of customers across multiple channels involving complex transactions. However, the technology cart has to be drawn by the business horse if companies want to benefit from great customer relationships.
For Amica, the business results bear out the effectiveness of this customer strategy. The company’s annual attrition rate is in the low single digits, significantly less than that of most of the competition. The lower attrition and the selective marketing result in lower costs. In addition to great service, customers get dividends. Insurance rates tend to be regulated in most states, but as a mutual company, Amica is permitted to rebate a part of the premiums. Not a bad outcome for company and customer, alike. Wish CRM were always such a win-win proposition.
