From the November 5-12, 2012 issue of National Underwriter Property & Casualty • Subscribe!

Key Step to Growth: Knowing Whether Customers Will Recommend You

How a Client Advocate Score can help a carrier determine opportunities for improvement

In 2003, researchers everywhere were stunned by an article in the Harvard Business Review titled “The One Number You Need to Grow” by Frederick Reichheld, a director emeritus of the consulting firm Bain & Co. What Reichheld discovered in a study of more than 4,000 consumers is that a company can, very accurately, anticipate its short-term success based on how customers answer the question: “How likely is it you would recommend (company X) to a friend or colleague?” 

“If growth is what you’re after, you won’t learn much from complex measurements of customer satisfaction or retention,” Reichheld writes. “You simply need to know what your customers tell their friends about you.” 

Since 2006, Flaspöhler Research Group has included this question in all of our surveys for insurers, reinsurers, engineering firms, law firms and accounting firms. Based on the answers to this question, we calculate a Client Advocate Score (CAS) for our clients and for each major competitor in the industry. A company’s CAS is simply a net measure of whether or not a company’s clients are advocating usage of the company to colleagues.

How far will a company’s CAS take it? Based on its very effective use by our clients, much, much farther than you might imagine.

Calculating a CAS is simple. First, we ask how likely a customer is to recommend a company to colleagues on a scale of 0–10, with 0 being “Not At All Likely” and 10 being “Very Likely.”

Next, we find the proportion of customers who are Advocates (those who answered the question with a “9” or “10”) and thereby likely to be repeat customers who are spreading the word to colleagues. Then we find the proportion of Detractor customers who indicate they are unlikely to recommend the company (any score from “0”-“6”) to colleagues.

A company’s CAS is found by subtracting the proportion of a company’s Detractors from the company’s Advocates. For example, suppose 50 percent of Company A’s customers answered the “likely to recommend” question with a “9” or “10” and 20 percent answered with a “0”–“6.” Company A’s CAS would be +30 percent.

In the 2012 Agent Survey we talked to customers of the leading 41 commercial-lines writers and calculated the CAS for each of these leading companies. While most of what we learned is shared only with our clients, the reader will find the sampling that follows especially intriguing: J While the average CAS for all professional-services industries we measure is, surprisingly, about “0,” the average for insurers in this survey is +22.7.

  • The highest CAS in the survey was 65.5, for Cincinnati Insurance Cos.
  • The lowest CAS in the survey was -25.
  • Only six insurers earned Client Advocate Scores of +35 in both the 2010 and 2012 surveys: Chubb, Cincinnati, Great American, The Hartford, Selective and Travelers.

It is important to point out that, although two different insurers may have the same CAS, this does not mean they have the same opportunities.  

As illustrated by the chart, Insurer A and Insurer B both have Client Advocate Scores of +30. However, Insurer A has a much more difficult challenge moving forward as 20 percent of its customers are currently Detractors and, based on our experiences working with clients, it is more difficult to move a client from a Detractor to Neutral than it is to move a client from Neutral to Advocate.

We also explore the proportion of clients on “shelves” for each competitor in the commercial-lines market. Shelves correspond to the proportion of clients rating a company “8” or “6” and characterize those clients for whom a very slight improvement in satisfaction (1 point) will produce an immediate increase in CAS.  

The most successful companies in a market have access to data linking how customers perceive the company on key evaluation/selection factors to how customers answer the “recommend to a colleague” question. This information enables an insurer to develop extremely efficient and focused marketing programs to build loyalty, increase peer-to-peer referrals and, more often than not, see immediate increases in both key client profitability and overall sales production.

It might not be a brave new world, but companies using Client Advocate and other powerful new marketing tools are certainly in the competitive catbird seat in the marketplace. 

Rick Flaspöhler is President of Flaspöhler Research Group. He can be reached at

CAS Chart


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