NewLink Consulting, Toronto found: 29% of U.S. life policyholders lost contact with the agent/financial planner who had sold them the policy, and 41% if the policy was purchased from an agent/broker.

Guest blogger Mark Weishaar

An orphan can be defined as “One who lacks support, supervision or care”.
How many do you have in your CRM database? How many customers have simply become dormant and shuffled into an inactive or unassigned category?

In a recent conversation with my client from a major life insurance carrier, I was appalled to learn that her company had well over 100,000 orphaned policyholders. In insurance-speak, these are folks who originally purchased a policy from an agent, but were never re-assigned after that agent left the company.

Many industries have a similar category in their database. Inactive bank accounts, infrequent flyers, one-time visitors… the list goes on. It gets me thinking: how many organizations could use a shot in the bottom-line? This category represents a huge untapped asset:

  1. Orphans are never contacted. You have forgotten about them, and they have forgotten about you. How likely are they to ever upgrade or buy another product or service from you? 
  2. If your competition is effectively marketing – and you know they are – how many competing offers can your orphans resist? Retention rates suffer when customers are ignored. 

The ROI of Marketing to Orphaned Policyholders

Let’s put some dollars and sense behind a simple illustration exercise: 

With the potential for this scope of increased revenue, it makes no sense to me that so many insurance companies do not devote any attention to their orphaned policyholders. Political turf issues over account re-assignment? Possibly. “Don’t rock the boat” and “Let sleeping clients lie” mentality? Maybe. Inertia? Most likely. 

Case Study: A short while back, I worked with a major hotel chain to develop a multi-pronged marketing campaign. Our objective was to revitalize their “dormant” clients: those who had not booked a room within the previous 24 months. Of the many successful initiatives we launched, the highlight was going back to the dormant customers.

After modeling their data against the frequent guests and re-soliciting a predictive-modeled group with an offer, we generated an ROI of 1,090%!

Unheard of? Yes. But true. And I could predict similar successes in your own organization.

So take a look at your entire customer file. Find those pockets of orphaned customers who have been ignored for whatever reason. Develop a strategy to solicit them with a product offering using a predictive model-driven approach. The incremental revenue generation and low acquisition costs are likely to amaze you, and will demonstrate once again the truism that:

Your Best Customer is Your Current Customer.

Mark Weishaar is a veteran financial services direct marketer and senior executive delivering broad range of leadership responsibility, experience and accomplishment across brand strategy, marketing, loyalty programs, customer data analytics, distribution, CRM, and social media on a worldwide basis.  He has directed the sales & marketing of a wide variety of financial services products and programs and held senior level roles in start-ups and  Fortune 100 companies in direct marketing environments, and  traditional agent/advisor companies. He has a unique ability to analyze and develop actionable marketing and sales programs with measurable ROI improvements.
Want to chat with Mark? Reply to him here or leave a comment on the blog.


Who Do You Trust?

 notes in HealthLifePro, that Americans’ trust in advisors has declined. A study by Hearts & Wallets, Hingham, Mass titled “Trust-Building Practices: Updated Empirical Analysis of What Drives Trust,” gauged trust on a scale of one to ten (one signifies very little trust and ten very high trust.) The study’s findings:

  • Just one in five Americans fully trusted their financial advisor in 2012 – a four-point decline since 2010.
  • Those awarding their advisors 9 points declined from 18% in 2010 to 13% in 2012.
  • Those awarding their advisors 8 points declined from 21% in 2010 to 17% in 2012.

The most trusted advisor practices are full-service brokerage and insurance practices versus self-service brokerages and banks:

  • 74% rate  insurance and full-service brokerages a 9 or a 10 (37% each.)
  • Only 60% rate self-brokerages and banks a 9 or a 10.

What Drives Advisor Trust?

The top trust drivers of trust were ranked as follows:

  • improving investor understanding of how the provider earns its money (by a wide margin)
  • the perception that an advisor is unbiased
  • clear and understandable fees
  • responsive
  • understands and shares the client’s values
  • has made money for the client
  • has produced a “positive experience” for friends and family members.


Transparency, responsiveness, understanding the client’s values and putting the client’s interests above one’s own are all core to trust in an advisor.


Please Hold For Prompt Service…

 shared this on Time Business & Money.

A new poll commissioned by text-message service TalkTo shows that 53% of American consumers say that they spend 10 to 20 minutes on hold each and every week. How much does that add up to each year?

“This adds up to…13 hours annually spent waiting for a company that swears via automated message “we care about your business” to answer the darn phone.

Other findings of the survey:

  • 86% of consumers report being put on hold every time they call a business.
  • 48% believe the customer service representatives who answer phone calls are not helpful.

Lessons Learned? None

The data corroborates and amplifies the findings of previous polls cited by Tuttle. For  instance:

So, you’d think American customer service would work to clean up it’s act, and call for improved customer help lines, shortening wait times and providing more meaningful assistance, right?

Well, you’d be wrong.

The survey indicates instead that the solutions companies are considering are even worse than the original problem. Instead of listening to what customers really want, many companies are just buying into the more convenient notion that texting makes more sense than communicating with a real human being.  Stuart Levinson, CEO of TalkTo, an app for service request texting, is a case in point. He writes:

“This research shows how poorly the phone performs as a customer-service channel. Everyone’s calling less and texting more. It’s time for businesses to catch up with how customers want to interact with them.”

Really?  Tuttle cites data that demonstrates just the opposite:

Amazing. So customer service is not about the customer at all; it’s about lowering their expectations and insulating yourself from the voice of the customer.  As long as we all collude in lowering the bar for customer service, we can all cost cut our way to prosperity – on the backs of the customer.

In the land of the blind, the one-eyed man is king. I’d say this provides a tremendous opportunity for a real thought leader to differentiate itself in the market.


Embracing Social Customer Service

Joshua March of  Conversocial points out that social customer service is  moving to the adopter stage with businesses increasingly benefiting from online customer service delivery, but he asks asks how many companies are actually practicing the delivery of exceptional social customer service.

The Ideal

 Research by SAP, Social Media Today and Pivot titled The Social Customer Service Conflict, examines the ideals and realities of social customer service in practice. Their research, based on The Social Customer Engagement Index, finds strong market enthusiasm:

  • 71% of businesses use social media for customer service
  • 88% report a positive impact on their business.

The Reality

Insufficient Resources: Still, while many companies are interested, most don’t yet believe that the social channels are a serious customer service route, on a par with email and phone, and fail to allocate significant resources to social customer care.

Of those surveyed:

  • 77.6% invested less than $50,000.

Joshua reminds us that first contact resolution is the key to customer satisfaction, but, without the right people in place to pick up social inquiries and deal with them to completion on the front line of social communication, the experience can just become more time consuming and frustrating for all involved.

Insufficient Process  (Poor Integration): Companies using social customer service seldom use it to its full potential.

  • Only 17.7% solve at least 25% of customer service issues online.
  • Almost 40% respond on an ad-hoc basis, but haven’t put a process in place.

Poor Response Times: The lack of investment and process show up in poor response times:

  • 32.5% of businesses response times take around 4 hours.
  • 30% of customers on Twitter expect an answer within 30 minutes.
  • 29% of customers on FB expect an answer in under 2 hours.

The results?

Like many initiatives that get implemented today, the implementation of customer service on social channels can become yet another “also ran” service that companies do because everyone else is doing it.  However, this approach gravely underestimates the risks. Adding a weak customer service channel can undermine your brand’s reputation.  Businesses have become far more customer-led than ever before.

The full Social Customer Service Conflict Infographic is available to view in full here.

Related Posts

Catch the Customer Completely Off Guard with Good Service

Click to view the Facebook Marketing Humor and Wisdom Page and be sure to “like” it!

Does Good Customer Service Pay?

 is co-founder of Seattle-based Kinesis, which helps companies plan and execute their customer experience strategies. He has written an interesting article titled A Guide to ROI in Customer Service.  This post summarizes Eric’s compelling thoughts on the subject.

Here’s the conundrum companies are facing:

Pros of Good Service:

  • Good service is an important value differentiator.
  • An abundance of literature finds that service can affect retention, spending, word-of-mouth endorsements and other customer activities that make a company more profitable.


  • Many companies with excellent service still suffer from poor financial performance.
  • Good service is expensive -requiring research, training, measurement and incentives to managers and employees.

So is good customer service worth the expense? What if we weigh the investment opportunities against the costs, comparing expected risks and returns? Unfortunately, many companies have not done a thorough job of calculating the ROI of customer service, and may not really be able to determine whether their money has been well spent, or, conversely, whether the money they save on using call centers overseas is really retaining enough business to even break even with well managed U.S. call centers.

The Larse Principle of Calculating ROI

According to Eric Larse, approaches to calculating service ROI appear to fall into two major types:

  • “Blind Faith” approach
  • “Rube Goldberg” approach
“Blind Faith” Approach
The Blind Faith approach proceeds on an unexamined premise that good service always leads to higher profits. According to Larse:Companies launch service crusades, making grand promises to their customers as they whip their staff into a frenzy of friendly service activity. They intone ritual phrases, like, “We’re dedicated to excellence,” and “The customer is number one.” And they contribute a substantial amount of money to the effort, confident that it is all going to a good cause.In the end, the miracle they had hoped for seldom appears. Customers may be more satisfied, but the expected rise in profitability rarely occurs. There may be profit changes, up or down, but it is devilishly difficult to figure out how much effect service quality had on the change.At this point many companies experience a crisis in faith and revert to their old practices: cost-cutting, reductions in staff, new ad campaigns. Poorer but wiser, they look back at their crusade and wonder how they could have been so naive.The “Service Machine”

The Rube Goldberg approach is “mechanistic:”

These folks don their white lab coats and attempt to build predictive models that explain the links between service attributes, customer satisfaction and profitability. They use statistical techniques to uncover correlations and coefficients and co-variation, revealing that a twelve-second reduction in average wait times will result in a one-point rise in customer satisfaction, which will turn into a half-cent increase in per-transaction revenue at a cost of a quarter of a penny, etc., etc.

These models can provide insights into

  • Understanding the associations among different service and profit factors
  • How service attributes interact with each other to influence customer perceptions.


  • Too many moving parts to function as a practical, day-to-day business tool.
  • Giving the appearance of being far more precise than they actually are: “Many companies have spent considerable effort and money constructing such models, only to find that their applicability is marginal and their useful lifespan limited.”

A third drawback that I have observed is that holding customer service account representatives to strict reporting standards and quality reviews creates misery in the workplace among those who should be the brand ambassadors for the company, which can have unintended ill effects.  An argument can be made that more judgement and empowerment is better than more rules, regulations, and criticism at making individual customer service representatives more effective in customer interactions.

The “Third Way” – A Balanced Approach

Larse holds that there is a need for an alternate model that is simple, practical and intuitive. It could be called the middle way between the two approaches: not as precise as the predictive models, but not treating service as sacrosanct. He characterizes it as follows:

The Third Way takes the view that service isn’t profitable because it’s good, it’s good because it’s profitable.

A 3-Step Approach to Doing Customer service right.

1. List customer behaviors that directly affect revenues or costs:

The company asks itself, “What, specifically, do we want customers to do more of or less of?” Attitudes (such as satisfaction) and feelings (such as delight) aren’t included  –  only measurable, observable behaviors, such as, “use our service more often,” “call our support line less often,” “purchase more items on an average visit to the store,” and “return merchandise less frequently.”

2. Extract the items that can be influenced through service interactions: including service interactions that involve employees. ATMs, web sites, unmanned kiosks, etc.

The company asks itself, “What can employees (or machines or web sites) do more of or less of, or do differently, to influence how customers act?” If it can’t be measured, if it can’t be trained (or programmed) or if it has no likely effect on measurable customer behaviors that effect profit, it is removed it from the list.

3. Determine the specific knowledge and skills needed to provide the service that will affect desired customer behavior:

  • Train managers and staff
  • Implement incentives and metrics.

The company can then calculate the financial impact of incremental changes to each item:

“What would be the effect on revenue of increasing the average customer purchase by one dollar? What would be effect on costs if the volume of complaints to call centers were reduced by five percentage points? It quickly becomes clear that even a small change in some customer behaviors can have a substantial financial impact. It also becomes clear which service changes will have the biggest effect.”

Implement and Fine Tune

These steps comprise the initial planning process. Ongoing experimentation will lead to a better understanding of the right implementation strategies and tactics for the company.

Through experimentation, the company can identify the most promising service investments and test them on a small scale, using an iterative process that compares service units (stores, call centers, etc.) using test and control groups. The result: a reliable formula for ROI will emerge that enables the company to make informed decisions on which service improvements it should invest in  –  or whether it should invest in service improvements at all. Important parameters to consider include:

  • The Magnitude of Change: 
How much change can the company expect to create? Can complaints be reduced by 1%, 5%, 10%? Will average purchase amounts increase by 50 cents? Ten dollars?
  • Interaction among different variables: Aggressive up-selling may lead to a 10% increase in the average transaction amount, but it could also lead to a 2% increase in customer turnover, which might counteract the benefit.

In summary, The Third Way Approach enables a company to identify the customer behaviors it is profitable to change and to determine the general effect of each behavior on revenue or cost, and the dollar value of an incremental change in each behavior. This puts the company in a better position to develop a strategy for promoting the customer service activities that are likely to influence changes in customer behaviors by implementing training, measurement and rewards.

Related Kinesis Posts:

Customer Service Is Our #1 Marketing Slogan

Click to visit the Marketing Humor and Wisdom Page

Why Provide A Personalized Experience Across Touch Points?

1. Personalization Drives Consumer Behavior

According to a December 2011 analysis from Janrain, in Q3 2011, personalization is important to consumers:

  • half of the consumers surveyed say that social login’s personalization capability is attractive to them
  • One-quarter are neutral.
  • One-quarter do not find the capability attractive.

The study also shows that personalization proves quite valuable.

  • 50% say that if a website personalizes their experience, they are more likely to return to the site
  • 46% say they are more likely to buy products/services from the site
  • 38% would be more likely to recommend the site to others
  • 33% are more likely to make purchases in-store.

2. Both Consumers and CEOs are More Demanding

A January 2012 survey of 94 retailers by Retail Systems Research finds that 63% of multichannel retailers expect the online channel to account for a sharp increase in their total sales by 2015.  As commerce continues to flow through multiple channels including in-store, online, mobile and direct mail,  it’s important to remember this basic lesson: consumers still give their business to companies that are more service-oriented and customer-focused.

3. Personalization Has Become an Important Differentiator

Here are some statistics:

  • ChoiceStream study shows that personalization can drive 10% in incremental sales.
  • Yet, only half of the Top 500 online retailers are using personalization techniques.
  • Over 61% of retailers say personalization is among the most important merchandising tactics in web retailing (10th Annual e-tailing group Merchant Survey.)
  • Some estimates are that e-commerce will account for 20% to 30% of total retail sales in the U.S. in as little as five years

Lauren Freedman, president of the e-tailing group testifies that:

Personalization is critical, essential, and growing in importance because as merchants really want to grow conversion, giving the customer a targeted experience through personalization is more effective.

Millie Park, Vice President & General Manager or ChoiceStream explains more concretely in How Can Personalized Recommendations Transcend Channels? why personalization is so important:

Think about your favorite in-store experience. The one where a salesperson on the floor makes suggestions, provides feedback, and helps you find what you need. You shop there consistently for a reason. That “personal shopper” model can be replicated across other touch points as well, whether it be online, via email, or even in catalogs. But retailers few and far between actually provide this experience across touch points.

4. Personalization Brings the Enterprise Together

Integrating online data into the offline world has endless opportunities. The key organizational roles that can implement and benefit from personalization include:

  • Merchandisers – Being attuned to seasonality, product inventory and demand, merchandisers who oversee the presentation of products  can leverage the power of personal recommendations online, at in-store kiosks and Point-of-Sale.
  • Marketers – Personalized emails can be used to present recommendations and drive repeat visits both online and in-store, as well as to re-engage lapsed customers, to help create brand loyalists and advocates
  • Customer Relationship Management – Personalized recommendations can be deployed online, via email, in mobile-commerce environments and in-store if there is a way to tap into online customer activity at the cash register or in a call center environment. This will help CRM to maintain customer data and reengage and nurture customers while creating loyalty across channels.
  • Information Technology leaders – They can use personalization to assure that solutions deployed are usable across multiple touch points with minimal or no impact on resources and technology assets for both integration and maintenance, as well as enable the use of data across all channels while protecting personal customer data.
  • Store (Brick-and-Mortar) Management – While relying on marketing and online promotion to drive shoppers to the door, having more information on the customer can help them to make a sale.  By swiping a loyalty card or entering an online user ID and password, a prospective customer can give  a salesperson a glimpse of their online behavior including what recommendations they clicked on or  products they researched. This information can help the salesperson guide the customer to those same products that may be in-stock or on sale in the store.
  • The CEO – Since the CEO wants to assure that all the business groups are working in concert to assure customers are being seamlessly serviced and sales are being increased profitably across each channel, (s)he can readily  appreciate the contributions that a comprehensive personalized recommendation strategy can deliver.

Leading retailers are leading the way in embracing personalized recommendations, and finding ways to integrate recommendations across each touch point. Companies in the financial services industry, where buying decisions hinge on highly personal circumstances and concerns, should be closely following these retail trends for opportunities to leverage them to provide a more personalized experience across touch points that can help drive the purchase process.

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