Choosing Customers

In Insurance Isn’t Interesting we introduced the 4Cs of Customer Service. The 4Cs of Choose, Control, Custody, and Care represent the four pillars around which a sound customer service program may be built. Customer service is the secret sauce that insurance brokers are in a position to offer in order to differentiate themselves in both new business generation as well as retention. In this article, we’ll focus on the fundamental, first C of Choose. Businesses typically take one of two tactics with respect to developing sales. They can either take the Field of Dreams direction or Choose. Those that believe in the Field of Dreams focus their efforts around building a product and then waiting for the market to come to them. They are focused more on their product than they are the market. Others try to find the demand and then customize the production of supply to suit the demand. This is the path of Choose.

Choose. Do we know who we are trying to do business with? Are our doors open to everyone and anyone or are we choosing those with who we can have mutually beneficial business relationships? Before you can offer service that wins, we need to make a decision around who we will let in. If we decide to let everybody inside, it will be impossible to properly satisfy customers. Not all business is good business. Some people present nothing but problems. Some souls are bottomless pits of demand. Some customers want what you’re offering. Others are grudgingly doing so, disliking the product and service each step of the way. Some have the means to pay their bills and some don’t. Some may want what you have and can pay the bills, but may represent undue risk for your markets.

How can we get clear on what kinds of customers we want to have near? Do we have a sense of how many we want to have? Is it always more? As David Allen wrote, “When you’re not sure where you’re going or what’s really important to you, you’ll never know when enough is enough.” Dorie Clark writes in The Long Term about a separate book, Uncommon Service, which involved studying the range of performance amongst retail businesses. They were curious about what was behind outstanding performance. First, they noticed what less successful businesses seemed to be doing. “The answer quickly became clear. The businesses didn’t want to turn off any potential customers, so they tried to be everything to everyone. We all know that doesn’t work, yet companies couldn’t resist the urge to do the exact same things as everyone else.” Blah service followed unclear, generic, one sized trying to fit all approaches. Clark quotes the authors of Uncommon Service noting, “Choosing to be bad is your only shot at achieving greatness. And resisting it is a recipe for mediocrity.” Choosing customers can seem like an arrogant approach. We’re uncomfortable trying to target our services to a particular group as we recognize that saying yes to some means saying no to others. Intentionally alienating large groups of people from our efforts seems counterintuitive. However, in order to be appreciated by those we most care to serve, we don’t do them (or us) any favors by diluting our efforts catering to the masses. In order to appreciate, we must eliminate and exclude.

An approach to determining who to choose is to reflect on what your needs are. What are you looking for in your insurance purchasing needs? Are you interested in coverage? Do you want to feel like a valued client? Are you concerned about costs? Do you want confidence that you can rely on someone to be there when you encounter a problem? What does the ideal insurance purchase process look like for you? Do you want someone that comes to see you? Do you want to manage the interaction remotely? Do you want to visit a location near your office or near your home? Do you need to be impressed by the physical setting of the office? Try to describe in detail what a quality purchase experience for insurance looks like for you. How long do you want the process to take? Do you want it to be thorough or quick, even automatic? How do you want to pay for it? What communications, if any, do you want from your insurance contact throughout the term of your coverage? The mantra of this approach is “Make me happy. Then find others like me.” If you know what the ideal experience is from your own perspective, you’re likely to be able to deliver this service, communicate it to staff, attract similar minded staff, and, in turn, customers.

In 1999, The Inmates Are Running the Asylum was released written by Alan Cooper. In it he introduced the idea of Buyer Personas. Nowadays, a separate but similar approach is to create an avatar of an ideal customer. Who does your ideal customer look like? What’s their age, gender, profession, and hobbies? Why are they buying your product? What will they do with it? Are they seeking it out or being told it is a requirement for them to obtain financing, for example? We can dig deeper into potential mindset of our ideal customers if we bear in mind a quote from Peter Drucker, “The customer rarely buys what the business thinks it sells him.” We’re seeking to identify the dreams, values, and worldviews of those we most would like to serve. Pamela Slim suggests the following questions to consider in Body of Work, “Who do you want to help? What are the specific characteristics of people you want to work with? Why do they deserve the very best of your intelligence and energy? What will they do with what you give them? Will they appreciate your gifts and bring out your best self? Are they fun and engaging to work with? Do they push you to overcome any natural fear and resistance to do important work?”

We’re asking and trying to answer questions like for whom are you? Who is it for? Who do you want to let in the door? Or, what’s your demo? Who is your demographic? We need to know this in order to determine what to say and what to provide. The products and services we offer as well as the communications we put forth must speak to the people we’re trying to target. In business school, this effort is known as customer segmentation. A business may have more than one group to which they’re trying to sell. It may be product A for group A and product B for group B. The marketing message and product are designed intentionally to appeal to one group over another. There are a number of examples of clear customer segmentation applied by insurance companies. We mentioned USAA in our last article. USAA provides insurance products solely for those that have been a part of America’s military. If you haven’t served in the US military, then you aren’t able to be a customer. That, according to USAA commercials, applies even to NFL legend Rob Gronkowski. Additional examples abound of insurance companies that have created subsidiaries to deal with customers based on age like Grey Power.

A downside of being too deliberate in choosing customers is that we may swing from our wide open doors to being too restrictive and looking like we’re closed and locked. As my mom’s advice regularly rang, “Beggars can’t be choosy,” we want to be careful about starving to death from our strict selection. Yes, we wish to detail who we’re trying to service, but we don’t want our net to be so specific and small that it doesn’t allow us to capture enough customers to keep our business operating. We have to choose an audience wide enough to allow us to stay afloat economically. We’re targeting what Seth Godin refers to as the Minimum Viable Audience or MVA which he defines as “the smallest group that could possibly sustain you in your work.”

We can work to segment our customer base by demographic characteristics like gender, age range, education level, and their job. We can also sort them based on geographic location. Additionally, we can break them down by their purchase volume. Are they a higher user of our services or a one time and moving on kind of person? Alternately, we can ask why are they purchasing the kinds of things we sell? What is the value they are seeking? How does our product help them? Additionally, we can go further and explore what other products and services to they buy? Who influences them? Where are they getting their information? Are there particular blogs or news forums they frequent? Are there common places where they may congregate. What live events would you expect to see your chosen people at? By asking these types of questions we get a better sense of not just who we’re seeking to serve but also where we may be able to find them.

The more we know about who we are trying to work with, the more we can dial in and direct our messages to speak to their hopes, dreams, and desires. In Your Move, Ramit Sethi concurs writing, “Your biggest challenge (is) customer selection. You pick the right customer, you win. You pick the wrong customer, you lose. Focus on helping great people get better.” Choosing customers, like each step in the 4Cs framework, implies a proactive decision on your part. If you don’t choose, you’ll lose. You’ll lose control. You’ll lose the ability to properly serve. Your success is no accident. Neither are many of the problems we’ll encounter. Take ownership of determining the kinds of people you want to do business with in order to build both marketing efforts, customer service, hiring, training, and other business efforts around being a place that attracts the kinds of people you’re looking to serve. Choosing correctly can become the core of your marketing. When you choose customers wisely and service them well, they find others and introduce them to your business. Birds of a feather flock together and the like-minded like the same things. If you are able to make many in a group happy, others in the same group will come to seek you out. Of our 4Cs of Customer Service, the first, Choose, is the most important. When done well, it clarifies decisions related to each of the remaining three which we look forward to presenting in greater detail in future articles.