When I speak with insurance claim professionals about thecustomer experience, inevitably I hear comments about claimpayments and the impact those payments (or denials) have onsatisfaction. Fortunately, after working within claim operationsfor more than 20 years, I have come to understand the challenges ofbalancing quality technical claim handling with customer serviceand can therefore speak to it with some credibility.

My dad used to say "your reputation is all you have," and sothis goes in business, especially in the competitive insurancemarket. When claim personnel slip up, word gets around. When claimsdoes a good job, customers are quiet because a good job is whatthey expect. When you do great, they might write a note to yourboss and tell a friend or two. How a company goes about doing"great" on a regular basis is the stuff of which organizationallegacies are made. Remember that great encompasses good. It's agood plus. You don't need to abandon good for great. You just needto continuously work to improve it. Better is not the opposite ofbest.

A Look at Technical Skills

Your claim department touches maybe 20 percent of your totalpolicyholder base every year, right? Not exactly. Try to make sureclaim professionals remember that their reserves and paymentsimpact the price of a company's products, and that price issomething all customers experience, not just claim customers. Infact, if the price isn't right, then many potential customers willnever experience neither the claims nor any other company touchpoints. This is because they will never become customers in thefirst place.

Competitive pricing depends heavily on the overall operationalperformance of your department and the accuracy of loss reservesand both loss and expense payments, all things that requiretechnical know-how to do well. Think holistically about your role.Asking yourself if customers understood the financial ramificationsof paying more than what's fair and owed on claims, as well as ifthey find value in our doing so will help you understand why payingthe correct, honest, fair amount is important to all policyholdersand not just the one at hand.

In terms of the immediate customer experience, knowledge alsomeans quite a bit. Customers don't know a lot about claimprocesses, damages, lawsuits, and so on. Many an adjuster overlookshis or her own knowledge and experience and assumes that customersdon't care. Well, they do care. This is why I recommend that whenhandling claims, adjusters calm customers down by not onlymentioning their experience levels but also assuring them thateverything will be done to make the process smooth. Knowledgeincreases customer confidence, so hand it over.

Soft Skills Matter, Too

The difference between doing "good" versus "great" often hingeson the development of soft skills as a requirement in the claimorganization. In claims, everything can be done correctly from atechnical standpoint, but if along the way the adjuster seemeddisconnected or uncaring, then the entire claim experience mightstill end up being perceived as negative, impeding the chance forrenewal and advocacy.

Anything technical can be learned and applied, and this is thesame with soft skills. The difference is that soft skills areinvisible and involve habits. This means that where technicalskills are learned from scratch, soft skills often involveunlearning some habits and replacing them with others. Quite often,soft skill improvement enhances an individual's ability to manageconflict beyond the office as well as within the scope of the jobat hand.

The Root Cause Not at Bayonet Level

Let's face it: insurance is all about solving problems forcustomers. Yet it's amazing that so many insurers struggle withsolving their own problems. During my time within the claim ranks,I heard a lot of lip service about customer service. I attended thetraining that set an expectation for me to rush to the phone andanswer with a smile. I even attended some really great trainingthat taught me how to handle conflict and make the most out ofdifficult situations. What has been most interesting to me,however, is that the overwhelming responsibility of delivering theclaim experience rested with the front line. That's a relativelyignorant view of reality.

Truth be told, the execution of a claim product involves astream of processes and activities between a customer's demand andthe actual delivery. In manufacturing they label this "lead time,"and this concept applies to each process in service organizationsas well. Great companies become adept at viewing that chain ofprocesses from the customer's standpoint and then find ways toeither improve speed or quality.

To learn more about the process of drawing a present state valuestream map; identifying root causes of waste (as defined by thecustomer); and developing a future state value stream map, read"Learning to See," a book published by the Lean EnterpriseInstitute. The moment of truth for your organization will not be inthe actual finding of waste -- which will surely happen -- but inwhat you do with the resources currently committed to wastefulwork. Truly great companies understand that ongoing pursuit ofwaste will not occur if employees don't feel respected. Losing yourjob shouldn't be the result of improvements you helped bring about.On the contrary, employees' efforts should be directed at growingthe company.

If employees aren't feeling respected, then the root cause mayindeed be the company's culture. Leaders are responsible forculture and must examine handling processes and decisions inalignment with what customers want, with an understanding of thecustomers themselves. Great companies have great alignment withcustomer.

Satisfaction Doesn't Work

How can we know whether our efforts are properly directed whenwe don't ask the customer how we're doing? Moreover, how cansatisfaction surveys offer us the best guidance when research showsthat as much as 80 percent of customers who defect do so even afterfeeling either "satisfied" or "very satisfied" with the servicesreceived by their providers? Could the root cause of a company'sinability to achieve greatness be in its failure to understand whatcustomers really want?

About 6 years ago, 15 years into my claim career, my thenemployer asked me to improve customer retention. Lowering ourprices, of course, wasn't the answer. I spent six years learningabout the drivers of superior retention and customer loyalty in theinsurance business and arrived at some pretty specific conclusionsabout what companies can do today to impact loyalty for success inthe future.

My findings show that companies would be doing themselves afavor by measuring customer sentiment using something called theNet Promoter(R) Score (NPS), which requires the simple question,"Will you recommend us to family, friends and colleagues?" Theresponses from customers are categorized into detractors, passives,and promoters. Once that's done, the percentage of promoters minusthe percentage of detractors equals your "Net Promoter(R) Score."For more about the Net Promoter Score, read "The UltimateQuestion," by Fred Reichheld, or visit www.netpromoter.com.

Your goal, as an individual and an organization, is to improveyour score by increasing the number of promoters and decreasing thenumber of detractors. It's that simple, right? Not really. Whilechange is hard work, it is much easier when the customers are incharge rather than someone who tries to speak on their behalf,including bosses, co-workers, or you. NPS brings clarity, allowingyour claim department to determine the projects and processes thatrequire improvement. It also makes results measureable.

When I Googled "culture," I got 55,000,000 hits. The bestdefinition I've ever heard is this: "The way we do things aroundhere." My experience in claims and with overall customer loyalty ininsurance has led me to believe that 'culture' is the root cause ofboth success and failure in our business...and probably any otherbusiness for that matter.

When we break the "what we do around here," we see that thereare really only three things involved: people (employees),customers, and the processes and activities between the two. Thecompany or department that wins is one that is serious aboutbuilding employee knowledge (both technical and soft), fosteringengagement, and continuously improving processes on behalf ofcustomers with a focus on creating more "promoters."

After two decades within insurance operations, Bernard(Bernie) Rosauer left the industry to help lead the insurancepractice Satmetrix, The Net Promoter Company. Rosauer specializesin helping insurers maximize organic growth efforts and hasestablished himself as a thought leader in the area of customerretention, customer loyalty, and operational effectiveness in theinsurance space. He can be reached at 646.675.7000.

Net Promoter, NPS, and Net Promoter Score are trademarks ofSatmetrix Systems, Inc., Bain & Company and FredReichheld