Customer service can be performed and measured in many ways. In this month's cover story, the nuances of customer relationship management-performance monitoring and analysis-play a big role in insurer's success. Being able to provide high levels of service with each and every customer contact-whether in person, on the phone or online-is sure to drive revenue and retention.How your company manages customer service may be the result of definable metrics, such as demographic studies, formal assumptions about customer behavior, anticipation of future requirements, etc. It may also involve a bit of guesswork. The results of your measurement should prove unequivocally that you know your customer.

In fact, an understanding of your customer's requirements is fundamental to your company's success. Back in the mid-90s I interviewed an executive at Wall Data, an Irvine, Calif., software company. Like most vendors, he was wildly excited about his company's product. He explained that he had used his product to create a "virtual circus" for his five-year old son, complete with clowns, jugglers and elephants on parade. He provided his son with microwave popcorn, and the two listened and watched as the circus unfolded-on his father's laptop computer.

"What about the distinctive circus smells that only elephants and horses can make?," I asked. "Did your son enjoy the experience?"

"Not important," he answered. By 1999, following a series of financial setbacks, Wall Data was acquired by a network management firm.

Whether your customers are internal staff members or agents, brokers or policyholders, knowing what they need and want is vital to delivering customer service with a variety of contact points for all participants. Those contact points are varied indeed. For example, policyholders who need assistance with claims require a different type of service than those who simply want to be able to notify you of an address change. The results of a recent study conducted by Waldorf, Germany-based SAP and Bermuda-based Accenture (see Statistically Speaking, page 36), confirm that customers reporting P&C claims prefer human contact with either their carrier call center or with their agent over online filing.

"The ability to file a claim online is a choice," says Rob Schwartz, industry principal specializing in insurance for SAP, who was interviewed about the study.

True, and for some customers, technology is empowering, efficient and carries a payback (81% of the study's participants are somewhat or very likely to use the Internet to file-if they are assured a faster settlement).

For some, however, technology-centered customer service is never appropriate: Can you imagine using the impersonal Web to file your spouse's life insurance claim? The agent or call center staff member who provides face-to-face or telephone contact also provides the human touch (sympathy and reassurance that the claim is being taken care of), which solidifies retention, good will and future business.

If you understand your customer, your customer service business strategy may boil down to one word: flexible. In this increasingly competitive marketplace, can you afford not to be?

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