It’s often a challenge working in the insurance industry, because we essentially provide a product that customers don’t actually want to use. No-one wants their pet to become sick, or their house to suffer a flood or burglary, or their business to experience a cyber-attack.

But it’s the potentially devastating physical impact these events can have, along with their financial implications, which mean we turn to insurance to provide protection against the many risks that life presents.

Whilst there are many, many different types and size of business in the UK, most will have the ability to purchase similar types of commercial insurance cover, for example Material Damage, Business Interruption, Employers and Public Liability and so on. But their route to those products may differ.

For many years the insurance market could only be accessed via brokers, then insurance providers looked to remove the ‘middleman’ by offering their products directly to the customer/insured. When Direct Line launched in 1985, it became the country’s first direct car insurance provider (although it has since expanded into other product lines).

The reason why the Direct Line model was successful, and then copied by many others, was that the car insurance selection and purchase process is reasonably straightforward. The insurer will ask the insured plenty of questions to gather the information they need to provide a quotation, but the quotation has limited moving parts – in the main it’s the level of cover (comprehensive, third party etc), the size of the policy excess, and sometimes additional bolt-on covers are offered such as Legal Expenses. Usually, it’s fairly easy to distinguish between the various elements and decide which combination is best suited to your requirements.

When purchasing car insurance, note how it’s you the customer that’s deciding on the options and making the selection rather than the insurer recommending one for you.

When first searching for suitable business insurance, it would be logical to again look to approach insurers direct. But think about how much more complicated your business is than your car.

Some insurers will provide quotations on a ‘statement of fact’ basis. This means the insurer will provide you with a quotation on the assumption that you comply with a statement of what your business profile does or does not have. For example, it may advise that you agree to have an alarm in place, or that all goods are kept inside locked premises, or that you don’t have any exports to North America.

Whilst this makes it easier to obtain the insurance you require, the challenge when it comes to trying to make a claim is of course that “the devil is in the detail”. If you misinterpret one of the statements or fail to notify the insurer that you have broken one of the statements (for example by starting exports to North America), then this could result in the claim being declined. Furthermore, if you are proven to have non-disclosed recklessly, then the entire insurance policy could be cancelled, and the premium retained by the insurer.

Engaging an insurance broker can therefore really add value. The broker will assist you by presenting your risk to insurers and ensuring that every salient point is disclosed, either via creating a detailed presentation for insurers to quote against, or by carefully reviewing the statement of fact with you to ensure you are able to remain fully compliant.

A good broker will also keep in touch with you throughout the year. For example, if you’ve mentioned to your broker that you plan to start North American exports in the second half of the policy year, you should expect them to contact you before the mid-year point to check whether this has started and to assess if your insurance cover needs to be adapted.

In these economically challenging times, businesses might perhaps view an insurance broker as an unnecessary cost, and instead try and research insurance options themselves and hopefully remember to inform their insurer every time something changes within the business.

However, there’s another key aspect of the service an insurance broker provides…..advice. Although I’ve worked in insurance for nearly 20 years, like many, my first encounter with insurance was for my first car, a rather old but much-loved Nissan Micra. I chose third party only cover with a direct insurer for my first motor policy, which was appropriate at the time given the insurance cost more than the car. But if I had continued to renew that insurance policy each year, remembering to advise the insurer each time I changed cars, the insurer would continue to provide third party only cover which would be completely inappropriate for my current leased 2023-registered and much higher value family car.

Legally, the insurer is not able to offer me advice about the most appropriate cover for my needs. However, if I was using an insurance broker, they would have advised me that my personal vehicle risk had increased dramatically, and I should therefore consider moving to fully comprehensive cover.

This is of course an overly simplistic example, but the same principle could very easily be applied to business insurance, where it might continue to be renewed every year on the same basis without considering the increased or different risks the business may face. A good insurance broker will advise the operators of a business about all the pertinent and developing risks facing that business.

My final point to highlight the positive impact a broker can have on an insurance placement, is what happens when you call upon the insurer to pay a claim. In a direct arrangement, if an insurer declines a claim, then it’s essentially you against the insurer, which doesn’t really feel like a fair fight. But by bringing an experienced broker into the arrangement, you add an insurance professional to your team, which very much evens up the odds in my opinion.

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The benefits of advice

The phrase “Nothing stays the same” is often used when we look perhaps nostalgically at the past.

I expect it was something we might have said to ourselves a lot four years ago when we were asked to stay at home during the repeated pandemic-related lockdowns, to make us remember that all things shall pass.

But when we look at our business, what attitude do we take? When we apply for finance, the provider will often look for stable business performance to offer their most preferable terms, but whilst this is desirable, is it sustainable for the longer term?

Our history is littered with examples of companies winning for today without consideration for the impact it could have on the future. The Victorian factory owners paid little mind to the pollution of our towns and cities when the industrial revolution took place. Whilst I recognise that this is a very relevant challenge from an Environmental, Social and Governance perspective, it’s not what I want to discuss today. Whilst I fully appreciate that the preservation of our global ecosystem is vital to our collective survival, I want to look at this from a different angle, that of the survival of your business.

Businesses must adapt to survive

Think about how car companies have had to make their engines firstly more fuel efficient and with fewer greenhouse gas emissions, then to be hybrid and electric. This can be known as a pivot, where a business moves from one product line into another.

When Apple developed the iPod, they had seen the failure of the minidisk to take over from CD Walkmans. They needed a way to convey their product effectively to the market in a sentence and Steve Jobs therefore introduced it as “1,000 songs in your pocket”.

I owned two of them – a 2007 iPod Nano (third generation) and, after sadly leaving that one at the gym, a fourth generation iPod which was released in 2008. The 2008 version lies in my junk draw at home and I recently saw the 2007 version in a museum. But I expect you will not be surprised to learn that I have quadrupled my Apple product consumption with a phone, tablet, watch and earphones all now part of my everyday essentials.

Apple started as a desktop computer provider and then looked to innovate by pivoting from their base product into new lines, along with amalgamating products into a single one such as their iPod into the iPhone. When you look at your business service or product line, can you see a potential end to its current life cycle?

For example, if you’re a business that has a large amount of plastic within its products, how do you plan to manage the evolution of your business to be one that is free from plastic? Currently price is normally a deciding factor in this regard, although once the “herd” moves it can be very hard to continue with your current business model. Think about how quickly plastic bags went from something given free with every shop purchase to something you had to pay for, thanks to campaigns like ‘Banish the Bags’ by the Daily Mail in 2008.

But this cannot be a single step. Let’s look at another example. As a City worker, the Evening Standard was once a paper which people paid to read, then two rival evening newspapers appeared (London Lite and The London Paper) both of which were free and therefore threatened the existence of the Standard, which until then had had a monopoly on the London evening paper market. The Standard has outlasted them but is now free to readers, which would have meant a change to its finance model. This could just be a stay of execution though, as more news is now consumed in real time via smartphones. Perhaps the move must be away from breaking news that would have been missed by the morning papers to more editorial and thought leadership pieces which are less time bound, via an online subscription?

If you can pivot correctly, it will not be a dramatic change of direction but rather a managed one over a period of time. Two phrases sum up this point well…

“Mine the gold seam” – Look at your offering. Can you easily step into the seam either side of what you are currently receiving (mining) your income from? Is there another market that would like to receive your products (another market could mean the same product but being sold to a different territory) or could your products be adapted to serve a different customer base? For example, if you made a medical product for humans could this be adapted for the veterinary world, or if you already supply to commercial customers can you look to supply to private individuals as well?

“Evolution not revolution” – The need to pivot your business is clear, but it’s equally as important to ensure this is done at a pace which keeps all your key stakeholders engaged and committed to your business. Too fast and it could be seen as either reactive to the competition that has perhaps moved first, or under prepared which doesn’t allow enough time for your employees and customers to understand the reasoning for the change. If we look to follow the evolution metaphor, it will be a slow gradual change which will allow your business to at least retain its market share and potentially increase it if you are able to evolve better than your competitors.

I have given a few examples, but there are plenty more from other industries and if you trace back your company’s or your own career history it will show examples of where your company or your working practices have evolved. Some might be for the better (my early insurance career involved trying to fax 50-page proposal forms, so I’m glad those days are gone), but then the move to home working has made illusive insurance underwriters far harder to track down, when they would have previously (at least) started their underwriting day at “the box” in Lloyd’s of London (the insurance and reinsurance market located in London).

So, as a call to action, look at how you have evolved in the past and think about where your next area for evolution will be to ensure your business continues to be one that is relevant today rather than one that could soon be present in a museum or a history textbook.

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Change for the better

Last month I talked about how the customer experience should be at the heart of what your business strives to achieve.

But what delivers that experience? Your employees and colleagues of course. You could order the finest meal in the world, but if it was thrown at you from the kitchen by the waiting staff, I doubt you would even be able (or want) to eat it even if it tasted amazing.

I believe there are four key elements that make up an outstanding team and I would like to spend some time looking at each.

Common purpose and goal

Every member of the team should be working towards a common goal which is clearly identifiable. Ideally these should not be aspirational. Let’s use the example of a sports team. It’s very easy to say “We want to be the best team in the world”, but what does that actually look like?

Setting goals which are SMART is a great place to start:

You can see how easily this allows the long-term goal to be broken down. Within your business you might already do this via your annual budget or longer term business plans, but are these shared with your wider team to ensure that everyone understands and is invested in the common purpose and goal?

I recently attended the Elite Business Live 2024 conference, and many of the speakers referred to sharing equity with their wider team. When they all have a tangible financial interest in the business, this brings unity to a team as they can all benefit from the business reaching its short, medium and long-term goals. In my working life I have seen this happen first hand. My employer, insurance group Howden, is in fact the 5th largest employee-owned business in the UK. Employees can go from good to exceptional when they become part of the ownership structure.

Celebrate differences

“Great things in business are never done by one person. They’re done by a team of people.”

Steve Jobs is credited with the above quote and it’s true of every team, but this doesn’t mean that everyone needs to be the same for the team to succeed. Most sporting teams will have different people with different skills, even if primarily from a physiological rather than psychological perspective, unlike perhaps in a business setting.

There have been numerous studies on this and one of my favourites is by Dr Meredith Belbin. Belbin believes that there are nine team roles that need to be fulfilled. Whilst these roles are quite defined, no one person will necessarily fit fully into one role, rather they might be a hybrid of at least two and perhaps more roles.

It’s important for a team’s manager to understand which role elements are present within their team, as this could identify why the team is not meeting its goals. Role identification is achieved by asking team members to each complete a questionnaire in which they assign points (1 low to 10 high) against a set of statements that best describe their individual behaviour.

It is of course also important to understand what role the manager of the team is fulfilling, because the manager may need to adapt their role to fill gaps if these cannot be resourced. If you work within a large organisation, you will often be part of a team within an even larger team. This could mean that in the team you manage (for example the ‘London Sales Team’), you are the ‘Shaper’ or ‘Implementer’, according to Belbin. But perhaps within your wider team (for example the ‘UK Sales Team’) you could need to be the ‘Monitor Evaluator’ blended with ‘Team Worker’ within that team.

Take some time to understand what roles your team members each fulfil, as without at least some attention being paid to each type of role, your team may struggle to succeed or be critically weak in a certain area. Returning to sports, a rugby union team without a prop forwards would struggle in the scrum for example.

Whilst Belbin talks about individuals in a psychological sense, it can be useful to also consider other differences which might be present, such as religion or home life. These differences can all have an impact on an individual’s role within a team. A person observing a religious holiday, or that has a new baby within their home for example, could require additional support from the team and for a while might need to slot into a different role type for a period of time.

Accountability

Generally, the performance of a team will be defined by the individual performances that stem from within it. Having performance goals (sub-budgets) as well as personal ones for each team member can serve as motivators and also ways for a manager to judge an employee’s performance.

I watched Sir David Brailsford, British cycling coach and performance director, interviewed on Sky documentary ‘Secrets of Success’ and he said that he let the Great Britain cycling team set their own rules for accountability which resulted in the team members being far harder on themselves than they would have been under team rules and goals set by the coaches. This resulted in a much more aligned and disciplined team that generated significant results.

Review and reset

Finally, when you conclude each time period for your SMART goals, it’s vitally important to review performance and results during that period, enabling you to make appropriate adjustments to the team to bring it back on track if required.

The GROW model can be useful at all stages. It is mainly used in coaching models, but I think it has a useful wider application:

Conclusion

Your team is the customer experience delivery point. Getting that team to function at the highest it possibly can, will increase your customer base and allow your business to succeed. But that doesn’t mean doing the same thing all the time for years on end.

Next month I’ll be talking about this further in respect of business evolution rather than revolution.

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The team behind the experience

“There’s no substitute for experience.” This is a phrase we hear often in business and our wider lives. But while this commonly refers to choosing people or a company to provide a service, shouldn’t the phrase also apply to the experience your customer receives?

Without customers, businesses would not exist. The customer experience they receive at your hands matters most when you’re aiming to drive repeat custom. In my own experience, there are several factors you need to consider:

Assess what you provide vs. what your customer wants

In many businesses, their service yields a tangible result. For example, a plasterer should leave you with smooth, level walls and ceilings ready to be painted. For other types of businesses, results will be less concrete.

Take time to understand what your customer is looking to achieve, and ask open questions which allow them to define clearly what outcome they require. If you consider a different approach or product would be more beneficial, be confident to challenge their view, and back yourself up with reasoned considerations.

That said, don’t overrule them unless the customer’s demands are dangerous or unreasonable. Instead, look to highlight the concerns you have with their request and how another approach could be more suitable for them.

Make the start of the customer experience feel like a partnership, not as an expert and novice dynamic.

Manage timescale expectations

Don’t commit to a timescale you can’t achieve with certainty. All too often I hear of businesses taking on too much work due to a fear of potentially losing customers. Think about the best restaurant or café in your town – it only has a certain number of seats for customers. What would you rather the manager say to you when you ask for a table: “We’re pretty full at the moment, so you could be looking at a 40-minute wait” or “Take a seat at the bar and we’ll find you a table as soon as we can”?

The first allows the customer to make an informed decision based on honesty – wait or come back another day. The second might cause customer frustration by letting them assume it could be just a short wait.

If customers value the experience they receive from you, they will be prepared to wait to receive it. Years ago, it would have been unheard of for restaurants to allow only walk-ins, with limited table bookings on Friday and Saturday nights. But now it’s not uncommon to have customers waiting outside in all weathers because they desire the experience they know they will receive.

Overdeliver where you can

It’s a given that you must deliver the service that’s required – but consider whether there’s anything else you can include that would please the customer, at little extra cost to you. Think back to the plasterer example. If there’s some plaster left and a few small cracks or holes in different walls to the ones you’ve been plastering, why not ask your customer if they’d like you to fill them? Or if you’re painting the outside of a house and you’re at gutter level, check the gutters to see if they’re blocked as an extra way to help.

This is easier to do with a physical service rather than a product, but if you look at your business you will find areas where this could be possible. If you’re selling technology products, perhaps offer your customer access to your Wi-Fi to set it up with your guidance, or fit the phone case to their phone and so on. If you’re a restaurant approaching closing time, offer the customer a starter on the house rather than wasting them at the end of the day.

Communicate even if it’s bad or no news

The “sound of silence” from a supplier is deafening to a customer. Respond to customers promptly and have a system in place to ensure that no incoming communication is missed. Even if you receive a voicemail intended for another business in a different sector, call that customer back and advise that they have the wrong number – they could be your customers of the future.

I know I have talked about managing timescales being important, but things will happen that are outside of your control, which can cause delays and may cause deadlines to be missed. If this happens, engage with the customer at the earliest opportunity to adjust the timescales and explain the reason for the delay.

If you promise to give a customer a call back or an update on a certain day, make sure it happens even if you have no new news to share. I’ve had to do this many times in my working life and, while the customer can be frustrated by the delay, they have always appreciated the call.

Ask for feedback, listen to it and adjust

There are so many ways to ask for feedback. It often happens post-sale, automated by various platforms and social media sites.

This doesn’t mean you don’t have to check back in with the customer. You should always check that they are happy with how things are progressing – and they might wish to alter what was agreed. For example, this could be especially true for professions such as landscape gardeners – you could remove existing foliage and find something hidden which the customer didn’t mention in their brief to you, such as old stonework. Your customer would want (and appreciate) you to check before you remove it.

With the current cost of living crisis, customers are faced with difficult choices when it comes to what experiences they invest in. It’s important that the experience your business delivers continues to be market-leading to ensure your customers continue to use and recommend you.

The team that delivers this experience is just as important – and I look forward to exploring this topic in my next column.

Photo by UX Indonesia on Unsplash

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It’s the experience that counts – ways to retain your customers