What I’ve Learned from Y2K: It’s All About Keeping Your Customers Happy
The year 2000 was an interesting year. And if we mix our own lives in with the news events of this past year, it started and ended with a bang.
Think about it, we were huddled in our shelters waiting for Y2K to bring everything to a standstill in January. Now fast forward to December and we’ve just finished up an election that brought everything to a seeming standstill. Even technology and the e-world have seen their share of ups and downs.
But to borrow the age-old maxim: “Those who forget the past are doomed to repeat it.” And after looking within the insurance industry, this has never been truer. Sites that dot-com, dot-came and dot-went leave us with reinforcement and encouragement to make sure that we don’t repeat their mistakes. So let me offer three observations or reminders for this year.
Know your limits
So many firms, small and large, see the Internet as a business panacea or giant pool of money. They get starry eyes and start spending more than they should in order to get their piece of the e-pie. The problem is that most of these ventures fare poorly.
Having seen the failure of a number of well-known sites and technology initiatives, I caution agents to look at how their business can be supported or enhanced by the web. For most, the web and electronic connectivity provide agencies with ways to give better customer service and information-not necessarily online selling.
If you don’t use caution, you might suffer from what I’d call the “priceline.com syndrome.” That is to start offering anything and everything on your site. Then, when the traffic’s not there, go out and spend tons of money (they spent upwards of $120 million) to market the service. And when that doesn’t work, cut bait and bail.
Knowing our limits forces us to strengthen our current business model and communication practices. Even though it sounds paradoxical, knowing the limits actually frees us up to look at and weigh new opportunities.
Know when to buy, lease, outsource
Last year, Toys “R” Us went live with their e-retail site only to experience some of the worst crashes and customer disapproval in their history. This year, if you go to the Toys “R” Us site, you’ll notice they’re co-branding with Amazon. Instead of fighting with and continually buying hardware, they outsource to Amazon knowing it’s the best when it comes to e-commerce and selling from the web.
This brings up an interesting question: how can you get the most out of your technology investment with the money you have? Because, besides the limits of the business, it’s also important to look at your agency’s technology needs and limits for the year.
First, look at your carriers. What technology tools and investments have they made that will help you? Do they offer their agents e-apps like quote generators, website tool kits, or Internet access? Start with them, as they have the name recognition and the big advertising.
Then, look at your upcoming technology purchases as well as technology strategies. This includes computers, software and peripheral purchases as well as less tangible items. It may be that the agency needs to register its own domain name to make it easier for customers to find the site.
Maybe it’s the addition of an IT person or the development of an application. In any case, plan for it and stick to the technology plan.
Another option is the recycling of older computers. How can you get good use out of your older and soon-to-be-discontinued computers? Look at them as network drives, firewall boxes, mail servers. Also, for CPU purchases, look at your usage. Most times, you won’t need the 1.2-gigahertz P3 processor. You can save quite a bit by looking at a mid-range computer with a Celeron or Duron processor.
Know your role
Carriers need you. Notice in the Amazon/Toys “R” Us deal how Amazon gets a brick-and-mortar front for toys through Toys “R” Us. If you look, most retail chains are integrating online inventory with store inventory, so that when you, for example, buy a CD player from BestBuy.com you can return it to a nearby store and not ship it back. The idea of “clicks and mortar” is making many people rethink how they sell.
Why is that? Two of the most important lessons from dot-com startups and failures come from knowing the customer. The first deals with how customers are treated. In a recent survey, e-retailers said that one of the most important lessons learned was that better customer experiences were more important than building brand recognition.
The second is that good customer experiences build relationships and that means return business and retention. Most e-retailers said that it was important for them to target the folks most likely to buy more (which means an older demographic) and knowing enough about the customer to market products specifically to them.
The agent-customer relationship that has been built on and refined for many years is really what carriers want online visitors to receive. It truly does boil down to good customer service. So if we make any business resolutions for 2001, we ought to include integrating technology into realistically and effectively serving our current and new customers even better.
Technocracy is a regular column designed to examine and explain new technology and how it applies to the insurance industry. Readers are encouraged to e-mail questions or comments to John Chivvis at ijwest@insurancejournal.com.