Learning by example
Jason Jones, Compliance Director at Hiscox, explains the difference between TCF and customer service:
- Treating customers fairly in a customer service context means providing them with sufficient information to make an informed purchasing decision.
- Think about the distinction between the letter of the law and the spirit of the law. It’s the difference between something being technically true and it being a fair portrayal of the service.
- Consider what you have promised as over-promising could lead to disappointment. Part of being fair is being clear.
- Portraying yourself as an expert in a particular field might be tempting, but if you tell your customers that you have expertise in a range of different industries or risk types, make sure you can deliver on that promise and don’t overstate it.
Planning for success
Looking after your customers is about more than being polite and courteous, says Jason Woolfe. It also means treating them fairly –and proving it
Faced with intense competition from direct insurers and a growing threat from aggregators, the most powerful weapon in the broker’s arsenal is usually seen as customer service.
With all the publicity around the FSA’s Treating Customers Fairly initiative, you might think that brokers could kill two birds with one stone by lifting their customer service to matchless levels. But good customer service and treating customers fairly aren’t the same thing, and confusing the two could lead to problems.
The deadline has just passed for brokers to show the FSA that they have all the management information or measures in place to test whether they are treating customers fairly. By the end of the year, they must be able to show that they are.
So what is the difference between fair treatment and good customer service? A broker could return a phone call quickly, handle an inquiry politely and provide all relevant documentation, but still recommend the wrong product. The customer may be quite happy and not even know they were treated unfairly.
Fair and square
Jason Jones, Compliance Director at Hiscox, says: “It’s the responsibility of the broker to look out for the customer’s interests regardless of whether the customer needs to be aware of this.
“You need to manage how you do that and have control of how well you are doing the behind-the-scenes work – such as passing on relevant information to the insurer quickly and accurately.”
Terry Russell, an ex-broker who is now a director of Intouch Consulting, says brokers’ emphasis on client relationships can actually get in the way of providing fair treatment to their customers.
“The customer relationship can actually become a smokescreen,” he says. “You could rip your client off and the client wouldn’t even know because they trust you so much. I’m not suggesting most brokers do that, though – they don’t.
“But brokers shouldn’t get complacent about their relationship and the service they provide. They almost need to look at their business with new eyes.”
Terry warns that if directors have to choose between focusing on treating customers fairly or providing great customer service, they should choose the former. He says: “It’s a regulatory requirement and it keeps you in business. But is it enough only to treat customers fairly and, for example, not to provide good customer service? A broker’s business is built on customer service, so you can’t do one without the other.”
Customers’ ideas of good service may vary widely, from the phone being answered quickly and documentation being despatched speedily to being treated politely and offered a cup of tea.
Clearly, having happy customers is good for business. But an element of fair treatment that may also help improve customer service is asking customers what they want.
Chris Harvey, also an ex-broker and now joint MD of TCF Index, says most brokers say they already give excellent customer service but should focus on finding out what the customer feels.
“Many brokers pride themselves on looking after their client, but that’s not the way to approach it,” he says.
“Don’t assume you know what’s best for your customers – prove it. Don’t assume you know what your customers want – prove it.”