CASE FOR FULL-TIME SERVICE MANAGEMENT, THE

Rough Notes, Jun 2005 by Sitkins, Roger

Service management helps make sure that you retain clients

Last month I wrote about the importance of full-time sales management. Without the commitment to an "Offensive Coordinator," agencies rarely experience true vertical growth (growth of 15% to 25% a year). In this issue, I'd like to discuss the case for full-time management in your service area as well.

I began thinking about this topic recently when I was reminded about a seminar where I spoke years ago. During the presentation, I asked the audience: "Are you a sales or a service organization?" I was quite surprised to hear the overwhelming majority respond, "Service!" While there is really no correct answer, I find that people who believe they are working for a service organization have accepted the role of being reactive order-takers who give good service. Unfortunately, this is contrary to how a successful agency should operate.

As an independent insurance agency, it is critical to view yourself as a proactive sales organization that provides "legendary" customer service. When you really distill the overall purpose of your agency, it boils down to just two things: obtaining clients and retaining clients. As I discussed in the last article, the ability to constantly obtain new clients is tied directly to proactive sales management. However, keeping those clients begins with legendary customer service.

One of my major concerns is that in most agencies, the service staff reports to someone who is not a dedicated, fulltime service manager. This can take several forms:

* a fellow service staff member who has been given the title of manager or supervisor, but who has his or her own clients to service and, therefore, cannot proactively manage and communicate with the rest of the staff

* one or more producers with other roles and responsibilities in the agency

* an owner who also has a significant book of business to manage

Now when you think of the three major functions in an agency-management, sales and service-and you start mixing them, guess what happens? Management loses every time. That's because managing is something that we tend to do at the end of the day when all of the other "stuff" is done. Relegated to "leftover" time, managing becomes an afterthought. As a result, internal communication suffers and eventually the agency loses its focus.

Invariably, some agencies will combine the functions of sales management and service management. This simply will not work. Each requires skills and abilities that necessitate having two different managers. If Fm a really great sales manager, for example, my skills and abilities will preclude me from being an effective service manager.

When I talk about service management, I am referring to the management of everything that happens in between renewal dates. Taking this even further, we must recognize that there are two groups of accounts to be concerned with. The first group is the top 5% of your accounts that generate 50% of your commission income. The second group is the bottom 95% of your clients that generate the other 50% of your commission income. (If you doubt the numbers, run a book of business survey off your automation system.)

When it comes to service management, I have a greater concern with the second group of clients, the bottom 95%. The top 5% (your "A" accounts) normally receive the proper attention simply because of their size and revenues. However, the bottom 95%, without proper management of the systems and processes, can easily create a loss on your bottom line. Keep in mind that 75% to 80% of all transactions in your agency are generated by that bottom 95%. Client dealings at this level are much more transaction-oriented than relationship-oriented, and decidedly more reactive than proactive in terms of service.

Similar in many ways to sound sales management practices, a good service management program will outline how your agency does business, from the workflow systems and renewal procedures to the claims filing and documentation process. Consistency is the key. Otherwise, you're going to have as many different ways and means of providing customer service as you have employees to provide it.

Years back, when I was making one-on-one visits with agencies and conducting internal reviews, I found the agencies that were least consistent with their workflows were the least efficient, least productive and most unmanageable. Due to the lack of service management, it was as if they had mini-agencies operating within the agency. There was just not enough time spent up front on expectations. The sales and service staff never really understood how their agency did business.

Let's review of the roles of service management. I believe they fall into the following categories:

Accountability. When it comes to the roles of service management, nothing is more important than accountability. The service manager must make the staff accountable for their work each week, including how many units they processed and the extent of their backlog. That's relatively simple with today's automated systems. Although it's possible for overzealous service managers to over-analyze and overmeasure the numbers, it is imperative that they know whether or not their service staff is handling the workflow that's coming in.