At LOMA’s 2003 Customer Service Conference in Tampa, a three-person CEO panel discussed the dangers of relying solely on technology to cure your call-center woes, and the place in a company where a strong, customer-focused culture truly begins.

By Stephen Hall

In the never-ending quest for providing your customers with the best and most personal service possible, technology is a powerful ally—but any company who expects technology to cure everything that ails the way they treat their customers does so at their peril. In addition, if a company is truly serious about transforming its culture into one whose products and processes are shaped primarily by customers’ needs, then that culture can only start at the very top.

Time and again, these were among the major themes that emerged as a three-man CEO panel convened to elaborate on their respective companies’ customer-service philosophies during LOMA’s 2003 Customer Service Conference in Tampa. The two insurance-industry CEOs—and one CEO whose company does extensive consulting work in the industry—took turns giving presentations on how their companies take quality customer service beyond the everyday realm of industry buzzwords and great-looking collateral materials proudly posted in the hallways, and into the reality of a vibrant, company-wide attitude that keeps customers too happy to even think about straying.

The panel included James W. Zilinski, chairman, president and CEO of Berkshire Life Insurance Company of America; Clyde C. Schoeck, CLU, ChFC, LLIF, president and CEO of Modern Woodmen of America; and Dennis Sullivan, CEO of Robert E. Nolan Company, Inc., a management consulting firm specializing in the insurance, health care and banking industries.

A summary of their comments and the key themes and concepts covered in their presentations follows.

Berkshire Life

A few years ago, Berkshire Life Insurance Company of America was very much a traditional, mutualized life insurance company that was seeking to develop a more concrete sense of what its focus should be—a more succinct way to describe what the company was all about. And according to James Zilinski, president and CEO of Berkshire Life, the company had always prided itself on the fact that the only person whom its businesses ultimately served was the policyholder.

"We hit upon a very simple idea that has been playing itself out over the last four or five years," Zilinski said. "Our mission statement is basically something Peter Drucker said 10 years ago: ‘The only purpose of a business is to get and keep a customer.’ One of the challenges that we had was to arrive at a definition of ‘the customer.’ And the problem with that term is the word ‘the.’ I think we all understand that in any organization, there are many customers."

To resolve this question, Zilinski said, Berkshire Life devised a set of "mission points," or primary purposes, for both its general agents and the home office. The general agents were defined as having four mission points: to get an agent, to keep an agent, to help that agent get a customer, and to help them keep the customer. Similarly, they decided, Berkshire’s home office has six mission points:

(1) to get a general agent;

(2) to keep a general agent;

(3) to help the general agent get an agent;

(4) to help the general agent keep an agent;

(5) to help an agent get a customer; and

(6) to help them keep the customer.

Still, Zilinski explained, this wasn’t enough, because "at the home office, there are approximately 400 people, and of those, there are probably only about 150 that are dead focused on talking to either an agent or a customer. As we thought about it, we realized that we have about 40 or 50 major processes within the company. Every process has a beginning and an end, and at the end is the customer; even the maintenance crew at the company has a customer. And so what we’ve established is that every department’s focus is, by definition, customer-focused."

With a customer-oriented focus in place, the next step was to find out what Berkshire Life’s various customers actually wanted and then use that as the way to measure the quality level of each department’s service and/or products on a regular basis. "We applied quality as the ongoing commitment to determining the satisfaction of the customer’s needs as those needs are defined by the customer," Zilinski said. "That forced us to go talk to various people involved in these processes and ask them what they wanted from those outfits, and what deliverable would be the most important thing for us to measure. And from there, we started to get metric-crazy."

The result was an annual evaluation process that is conducted in every department of the organization, he said. "Every year, we go through the process of re-evaluating our measurement system. We ask ourselves, ‘Do we have the right measures? Do we have the right goals?’ These metrics are reviewed by our Senior Leadership Team and approved every year by our board of directors.

"Once we’ve taken the appropriate measurements, we report publicly to everyone in the organization as to how we’re doing," he said. This is done through departmental score cards that are ultimately used to draw up a company-wide score card whose results are tied to rewards and compensation. Because of this process, Zilinski said, everyone at Berkshire Life is now on an incentive compensation plan.

One example of a metric used in the evaluation process is cycle time (that is, the duration from the time an application is received to the point in time when a policy is issued). "Cycle time is something that we thought was a very critical measure of our ability to satisfy a client," Zilinski said. "In 2002, we began the year with a cycle time in the range of 35 days, weekends included. We had established a goal of 33 days; we actually achieved 27 days, and in 2003, we set a goal for 25 days. We’ve also stated this goal to our field force, which creates a competitive cycle. For example, our top agency is producing a cycle time of 19 days, compared to our 27 days overall." This also facilitates more frequent communication between the home office and its field force, he said.

One of the great potential values of this kind of customer satisfaction feedback loop can be realized over the long-term, Zilinski said. "If you do these consistently, and you build a multi-year track record of watching these go up or down, and you measure yourself against yourself and constantly delve deeper, it will give you a lot more insight into what’s going right and what’s going wrong," he said. "And that is really what the process is about."

In his presentation, Clyde Schoeck, president and CEO of Modern Woodmen of America, discussed how a large portion of his company’s approach to customer satisfaction deals with combining the benefits of high-tech with the personal care of high-touch service. Modern Woodmen’s mission and service philosophy, he said, is "to be a family resource for all America, with a special emphasis on bringing families together, keeping them financially independent, emotionally secure, and physically involved in their communities. Our mission is to improve the quality of life for our members."

The cornerstones of Modern Woodmen’s service philosophy, according to Schoeck, are the choice of the member, the use of technology, a consistent service experience, and a service culture within the organization. With regard to the fourth cornerstone, Schoeck said a service culture starts at the top. "If you want to call me and talk to me, you can," he said. "My number is (309) 793-5660. If you call that number and I’m in the office and not in a meeting, I will answer that phone. Now, needless to say, I don’t have a lot of members calling me; I probably don’t have the answer to their problem anyway. But we do have a lot of agents call, and certain management people as well. So I think that culture really has to start at the top."

The company’s corporate plan for providing superior service to its members also consists of a set of directives designed to help employees understand their role in providing such service—directives which Schoeck laid out for conference attendees. "We define and communicate certain service objectives to each service provider, and we establish and initiate ongoing service training for the home office and the field force," he said. "We research and implement new technology where feasible to support the service objective. It’s also important to establish, communicate, and mandate quality control service standards. We train our people to be accessible and flexible to service requests. They should take ownership of any requests for service; the individual that gets that request is really responsible for making sure that it’s taken care of. They should seek to understand the basis of the request for service and conduct their work in an ethical manner. I’d like to say that the insurance industry is heads above many other organizations when it comes to ethics, especially given what has happened over the last year-and-a-half or so."

Today, Modern Woodmen’s service center is a quantum leap ahead of what was in place just three years ago, according to Schoeck. "Three years ago, we didn’t even have an 800 number," he said. "Today, we have 25 people and a service center, and when you call in, you get a person. In January, we received more than 30,000 calls, 92 percent of which were answered. That’s just under 1,400 calls a day. Sixty-two percent of those calls came from agents or the agents’ assistants. Thirty-six percent came from our members, and 2 percent came from funeral homes or other companies wanting information on someone’s insurance certificate."

Modern Woodmen also has a computer support center that provides help for its field agents if they ever have problems with their computer. "In fact, we have the capability of taking over that agent’s computer and working on the problem ourselves, if necessary," Schoeck said. In addition, Modern Woodmen is in the process of building an online bank for its members that will also be linked to the service center.

As for the service ethic that drives the call center, Schoeck said: "We don’t have an automatic call attendant, because the feeling is that the positive gain of not having that feature outweighs the savings that are the result of using them. We want anyone who calls the service center to be able to feel good about their relationship with Modern Woodmen, be it a person who markets our products or someone who has purchased our products. Our home office staff works in partnership with field representatives. For our members, this reinforces the message that we’re all Modern Woodmen and that we work together for them."

Schoeck took a moment to share Modern Woodmen’s original creed with attendees: "There is a destiny that makes us brothers, none goes his way alone; all that we send into the lives of others comes back into our own." He said that he believes the company’s current approach to customer service and running its call center is testament to the fact that this creed is every bit as relevant today as ever. "When a member expresses their concern, various departments work together to solve the problem," he said. "Service is a philosophy, a culture, and it doesn’t just happen. It’s got to start at the top.

For the final CEO presentation, Dennis Sullivan, CEO of Robert E. Nolan Company, Inc. , emphasized the need to not only obtain customer feedback and understand it, but to act on it. "I’ve done a series of CEO interviews over the last six to seven years for an industry magazine," he said. "And one of the areas that we always focus on is customer service and what it means to them and their organization. And every executive I talk to says customer service is a top priority, that it’s important to them and that they’ve built a strategy around it. It’s like the old saying: ‘Everyone wants to go to heaven; nobody wants to die.’ But when you start to dig down, the organizations that are really at the top have some meat on the bones, so to speak, and they have a process in place."

Part of that process involves getting customer feedback, Sullivan said, but "the real work comes afterwards: After you get that information, what do you do? In organizations that take action on that information, you can really see it as part of the culture, versus just some words on the wall or that little three-by-five card that they might have. So the three pillars of customer service, from my perspective, are understanding customer feedback, reviewing it, and then acting on that information."

Too many times, according to Sullivan, companies rely totally upon technology to provide the solution to their customer-service problems, failing to realize that it’s only part of that solution, and no more vital than one-on-one interaction with customers. Of all the consultation work that Robert E. Nolan Company does, he said, "about 60 percent is in insurance, with the rest of it in banks and health-care organizations. We’ve worked with some banks whose employees would tell people, ‘I can’t help you with that, ma’am; you’ll have to go to one of our ATMs for that information.’ And all of us can relate to going through one of those endless call loops where it says, ‘Press one for this, two for this’ and so on, and none of those are what you want. So you say, ‘Well, which one might be close?’ So you pick one, and then you get in the loop and you go around again. Also, there are people who go to work and hide behind technology: ‘I’m either on the phone or away from my desk; please leave a message.’ When we come back, we have 45 e-mails or voice mails; we don’t want to talk to people. But what we’re seeing now is that there’s a little bit of pullback from technology as companies ask, ‘How do we make it work correctly?’ Instead of just having the technology drive their customer-service functions, companies are now asking, ‘What do we need to do to have that high-touch service?’"

Sullivan recounted a recent interview he conducted with Tom Renyi, the chairman and CEO of The Bank of New York, in which they discussed aspects of leadership. "One of the things I remember him saying was, ‘The constant must be the company’s strategic intent.’ He said that The Bank of New York, not Tom Renyi, is that constant. In other words, within organizations, people are going to come and go, but that organization needs to have a culture and a strategy to be sustained. And those things cannot exist only within one person, because if the person leaves, the culture dies. You see all the time in sports where a coach leaves and the program falls apart; companies have that same tendency in some cases. He also said, ‘Employees need to understand the goals and measure results, and you must communicate very clearly to them what qualities are rewarded.’"

In another interview, according to Sullivan, David Stonecipher, the CEO of Jefferson-Pilot, told him: "We tried to bypass communication in our customer service approach. We mistakenly thought technology was going to create all the solutions instead of investing in our employees, who are really the ones who come up with the solutions. Technology is an enabler, but the best and brightest of our people are going to create the customer service culture that we want."

In summary, Sullivan ended with a quote from John Wooden, former UCLA basketball coach and the winningest basketball coach in NCAA history. "He said, ‘Everybody wants to win, but most people aren’t willing to do what it takes to prepare to win.’ Similarly, in your industry, it’s the organizations that invest behind the scenes and do the hard work and research to develop processes around customer needs and customer satisfaction that really get it. Those are the ones who are going to make the difference."