 | A couple of weeks ago I expressed my disappointment with Geico. The auto insurance provider enticed my parents to leave the insurance provider they had used for nearly 15 years by offering them lower rates. Then, after one year of faultless driving, Geico substantially raised their premium. When my parents called into customer service for an exploration, they were told that their sales rep must have overlooked accidents on their driving record prior to joining Geico. It smelled like a bait and switch. My column prompted a lively discussion on the Right Reality blog, including a frank letter from a Geico employee who understandably chose to withhold his or her name. "[You] were the victim of a wily sales rep," the note began. An explanation follows: "Unfortunately, GEICO does not arm its sales departments to think, and act like an underwriter. The sales department is under pressure to make quota, and will sell a policy any way that they can, which unfortunately runs counter to the integrity and ethics that GEICO attempts to instill in all its associates. Instead of dutifully running the [motor vehicle report] to quote the correct rate the first time, they quote a rate based on no previous accident history." I appreciate the candor, my friend. Sadly, Geico is not alone; such sales practices are altogether too common these days. Sales agents typically work on a commission basis, and do not expect to ever engage the customer again after completing a transaction. They literally move on to the next call. So they frequently make promises that the company will not be able to keep; whatever it takes to acquire the customer. Certainly, very few companies actually encourage their sales reps to lie to potential customers. But aggressive sales strategies supplant nurturing real customer relationships. Most US companies focus on customer acquisition to fuel their revenues. Executives widely believe, on the other hand, that customer retention - keeping them satisfied so that they hang around for ongoing products and services - is too costly. For that reason, the customer engagement is framed as a transaction, not a long-term relationship. This strategy, though followed across industries today, will create a backlash in the not too distant future. For that reason, the smart company will explore ways to deploy communications technology and effective job training to enable the building of customer relationships in a cost-effective way. In essence, that was my message to a trade association gathering of call center and technology trainer professionals in Las Vegas earlier this week. They are being pushed constantly to innovate "transaction platforms" that cut operating expenses. The outsourced call center has emerged as the most popular solution. But hold on; it's obvious that creating a channel for communication between parties anywhere on the globe - say Bangalore to Omaha - does not nurture a relationship. What's the next step beyond a completed transaction, particularly if the product or service does not satisfy the customer? In a globalized market, most every product or service can be commoditized. It is rare, in that regard, that a company can win on price differential. It needs to "own" the customer relationship. Technology development and sales strategy should make this goal its top priority. |