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Norwich Union takes customer service into a new dimension

21st Jun 2005
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John Willmott, director of customer service at Norwich Union Insurance, explains how the leading insurer is implementing an original new technique to cause a paradigm shift in the quality of customer service it offers via its customer contact centres.

In the enormously competitive retail financial services markets of today, being good enough is no longer good enough.

At Norwich Union Insurance we have always believed - I hope justifiably - that we offer a high level of customer service from our customer contact centres. But this is no longer enough for our customers, for our partners, nor for ourselves. We want to offer a quality of service that is really special; a level of service which, if we can get it right, might even be great.

With 13,000 employees and total annual premiums of almost £8 billion, Norwich Union Insurance, the general insurance arm of Aviva plc, is the UK’s largest insurer. We provide 60 percent of Aviva’s worldwide general insurance business by gross written premium. In 2004 Norwich Union generated an operating profit of £832 million. Altogether we operate 15 customer contact centres in the UK and three in India. These employ a total of 8,000 people.

Our commercial landscape is ever more competitive; our customers ever more demanding. To survive and prosper, we must embrace radical change. We must reduce our costs of doing business and we must improve customer service. Our fundamental perception - and the implications of this point are massive and ongoing - is that a traditional, ‘ordinary’ level of contact centre performance will not deliver the differentiated, exceptional calibre of customer service that wins enthusiastic loyalty from customers.

A major part of what the Norwich Union does involves selling insurance to customers directly. But like most large insurance companies and many other types of financial services organisation, we also place a major emphasis on developing relationships with third-party organisations to furnish them with a variety of services. These services include being, in effect, the partners’ own customer contact centre.

My job as director of customer service for our partners is to ensure that their own customers do indeed enjoy a level of service that is much better than merely ‘good’.

Norwich Union began working with partners in the 1970s. This was comparatively recently in our 200-year history, yet we were in fact one of the first insurers to start getting involved with this area of business. >From the moment we initiated this new revenue stream we have regarded our ability to offer a top-notch service to partners and their own customers to be an essential part of our corporate strategy and competitive differentiation. Today, the business we have with our partners is worth a quarter of our annual turnover.

The precise nature of the processes we carry out for our partners varies according to their particular requirements.

In some cases we take on the complete responsibility for a partner’s insurance offering and deliver that offering essentially as a turnkey service. When this happens, our staff deal with the partner’s customers’ insurance requirement from start to finish - that is, from sales to claims resolution - as though we were the partner’s own staff.

Other partners, especially those with strong, high-profile brands, may prefer to retain control of their sales and branding but will make use of our own people in administering and managing the insurance product, again including handling claims. In practice, this second type of arrangement tends to be the most popular with partners’ customers.

Ideally, both types of arrangement give our partners’ customers the peace of mind, security and square deal they associate with a brand they know and trust - the partner’s brand. The partner’s customers also benefit from the long-term expertise, strong capitalisation and reliability of the Norwich Union.

But whether we are offering a partner an entire turnkey service, or focusing on the administration and management of the insurance product, including claims handling, the entire arrangement cannot possibly be a successful one for the three parties concerned - the customer, the partner, and ourselves - unless the quality of service we provide to the partner’s customer is absolutely top-notch.

In my professional life, I adhere rigorously to the creed that in the financial services industry, as in other major sectors, product pricing is a crucial factor in winning customers. But if you really want to keep customers, what really matters is the quality of customer service you extend to them.

Following on logically from the implications of this creed, we decided to take vigorous steps to investigate what we could do to make the quality of the service we offer to our partners’ customers even better than we believed it already was.

Research into the theory of customer loyalty

A sensible first step seemed to be to find a consultancy that had in-depth experience in the customer service and customer loyalty arenas and could give us advice about practical steps we could put into practice to achieve our aim. As a result of our research, we made contact with an organisation that had already been in touch with us: the service excellence consultancy, Cape Consulting.

The first advice we were given by Cape Consulting was that we ought to familiarise ourselves with the work of the business thinker Frederick Reichheld, author of the best-selling book The Loyalty Effect and its sister publication Loyalty Rules.

I found reading Reichheld an invigorating and inspiring experience. In these two books, Reichheld is unequivocal in his belief that customer loyalty, far from merely being a subset of what a business should all be about, is - in fact - the totality of what a business’s focus should be.

What I found particularly interesting about Reichheld’s work is that he has ingeniously reduced his thinking about customer loyalty to proposing that the best and most reliable test of this should simply consist of the customer’s response to the question would you recommend this organisation to a friend?

Indeed, Reichheld has drilled down even farther into the subject. He has actually developed ways of measuring customers’ willingness to recommend on a scale of between zero and ten.

Reichheld has modelled the results against organisations’ sales growth and shown that when there are significantly more promoters (that is, enthusiastic recommenders of the organisation in question) than there are detractors (that is, those scoring comparatively low on the recommendation scale), then it is likely that sales growth among these loyalty leaders will substantially exceed growth among competitors who do not have significantly more promoters than detractors.

The terms ‘promoters’ and ‘detractors’, by the way, are Reichheld’s invention. They seem appropriate for the exposition of his basic thesis, which is that anything less than an enthusiastic willingness to recommend makes someone essentially a detractor.

This is a crucially important point. In Reichheld’s world there are no ‘A’s for effort when it comes to inducing someone to be almost willing to recommend an organisation. Only success in winning their enthusiastic willingness to recommend counts.

After steeping ourselves in Reichheld’s ideas, and then holding further discussions with Cape Consulting, we decided that if we wanted to effect a major improvement beyond merely being ‘good’ in the quality of the customer service we offered our partners’ customers, we would need to define and pursue a clear and decisive course of action. Above all, we would need to do everything we could to improve the quality of the customer service experience our partners’ customers were receiving from our customer contact centres.

The challenge that faced us

The substance of the challenge that confronted us was that, as I’ve suggested above, we knew our customer service was pretty good already. We weren’t, therefore, in a situation where we had to dismantle everything we were already doing and start again. From some perspectives that might have been easier than what we actually had to achieve, which was to raising a system that was already performing well another rung - or preferably even several rungs - up the ladder of quality.

When an organisation already believes itself to be good in some particular respect, there is a huge challenge involved in overcoming the inertia of the status quo. People see no compelling reason to change what is already working perfectly well. Their creed tends to be that rather over-used but nonetheless commonsense mantra, ‘if it isn’t broken, don’t fix it.’

But we were confident the way ahead we had chosen was the right one. And so, starting with our call centre in Bishopbriggs - a suburb of Glasgow - we began working closely with our call centre agents to develop an entirely new mindset as far as dealing with customers was concerned.

initial research

We decided to appoint Cape Consulting to assist us with this initiative. Our work with Cape Consulting began with a programme of customer research in which we measured our ability to generate enthusiastic customers who would be ‘promoters’ according to Reichheld’s terminology. We then modelled our ability in this direction against Cape Consulting’s database of ‘Key Relationship Builders’ (KRBs). These KRBs - the term was developed by Cape Consulting itself - can be defined as clear, recognisable and distinctive practices that impress customers.

The effect of KRBs is clear: they lead to customers enjoying the interaction with the organisation and, all being well, significantly increase the likelihood that a customer will become a potential recommender of the organisation to others.

In particular, KRBs are designed to ensure that the customer feels that:

  • he or she has sufficient time to think, without feeling rushed
  • he or she is appreciated as an individual
  • dealing with the organisation is easy, convenient, efficient and enjoyable
  • the organisation genuinely cares about meeting his or her needs
  • he or she is getting a really good deal from the organisation.

Putting the research into action

In business good research is always important, but devising and implementing applications that literally capitalise on the research and win competitive advantage from it is what really matters. We aligned Cape Consulting’s KRBs to a programme we already had underway to improve the quality of customer service experiences. That programme had defined the ends. Cape Consulting’s work defined the means. We named our new programme ‘Care at the Heart’.

The idea behind the ‘Care at the Heart’ programme was that we would very consciously set specific objectives for how our customers would feel when they dealt with us. We then identified what changes we could make in how we communicated with our customers, to give them the feelings we wanted them to have. This objective - giving customers those feelings - was the key aspect of the procedure.

Achieving this objective required a vigorous programme of decisive action. Like many in the call centre industry, I believe that the biggest influence on the performance of call centre agents is their Team Leader. And so we created a programme that involved Team Leaders teaching their teams how to achieve the KRBs that we had, very literally, set at the heart of the Care at the Heart programme.

We were delighted to find that the KRBs gave the programme an unprecedented level of credibility among call centre agents and Team Leaders. In particular, the enthusiasm of Team Leaders was infectious - in the best sense of the word - and their teams enormously benefited from it.

The practical intervention

What was the particular nature of the intervention at the actual ‘coalface’ where call centre agents deal with customers on the phone?

Above all, the telephone interaction between the call centre agent and the customer became guided by specific target behaviours which the agents were encouraged to put into action in a natural and - above all - authentic fashion.

The reasons why authenticity has been the key to the programme’s success are:

  • a lack of authenticity is easy to detect in voice, tone and manner.
  • a commitment to offer really excellent service is often called ‘emotional labour’. An agent must want to deliver the KRBs. If he or she doesn’t, no sustained improvements are going to happen.
  • if agents don’t enjoy the experience of talking to customers, their jobs can be very mundane indeed. A principal purpose of the programme is to help call centre agents realise that their jobs will actually become more interesting and more enjoyable if they put these practices into action.

Making progress

Overall, the work itself consisted of three key phases; a diagnostic phase, an implementation phase and a ‘business as usual’ phase.

The diagnostic phase posed the following key questions:

  • do we impress our customers through their service experiences?
  • do our people know how to impress customers?
  • are we supporting a contact centre environment where our agents are given the opportunity to perform to a high level?
  • how can we support our front line managers in driving improvements to customer experiences?

Cape Consulting’s diagnostic processes involved a range of tools: quantitative assessment of customers’ service experience and the identification of Reichheld’s all important scores to identify performance gaps that had to be closed, and thereby increase the likelihood of creating promoters.

Cape Consulting assessed calls between our contact centre through call listening. Our performance climate was measured, relative to Cape Consulting’s existing database, on such key dimensions as:

  • strategic clarity
  • performance standards
  • teamwork
  • recognition and motivation
  • responsibility and commitment

It’s important to point out that because we know our Team Manager population to be ultimately the most influential factor of all affecting the performance of our customer contact centre staff, Cape Consulting used an audit of coaching skills and practices to make recommendations to increase the effectiveness of this important group.

The implementation phase involved Team Managers becoming even more involved at the heart of the process. They ran events for their teams which shared customers’ feedback and data. This allowed Team Managers to communicate to their call centre agents important discoveries about the agents’ current level of performance. Contact centre staff were shown that while certainly they were good at what they did, there were many areas where they could potentially make improvements.

Finally, there was the ‘business as usual’ phase in which we in effect ‘rebooted’ our activities to include the new working practices we had developed that incorporated the major new emphasis on achieving the KRBs.

These new working practices, and the feedback processes that were a crucial element of them, were essential to our key task of instilling new behaviours. Again, the difference was between knowing what to do and actually doing it. We have found that implementation has taken dogged effort and persistence to convert those contact centre staff who were still comfortably doing just enough to satisfy customers but not enough to impress them.


The Care at the Heart programme is still continuing. I think it is fair to say that it has allowed us at Norwich Union to achieve a paradigm shift in how call centre agents do their job. Making this paradigm shift happen has been a major undertaking and one which still needs constant vigilance. People do not change their behaviour overnight; they have to be repeatedly persuaded to change it, and given positive reasons to want to change it.

It is true that some aspects of Cape’s intervention did involve scripting the new way of dealing with customers. And because the call centre agents were dealing with financial services, there were some necessary regulatory and technical aspects of the conversation that had to be included.

But the general approach has not been to inflict scripts on our agents but rather to create a collaborative atmosphere within call centre agent teams where individual agents feel motivated to work together in the team to collaborate on achieving an enormous change for the better in how they deal with customers.

The response to the initiative from individual call centre agents at Bishopbriggs has been extremely inspiring and encouraging. Many people who work in call centres are young people starting what is often their first job. Labour mobility within call centres is quite high, and in the past many agents have taken it for granted that their work would be rather boring and not very ‘human’. We have shown, I think, that this does not need to be the case.

The hard facts are there too. Sales are up. The virulent problem of ‘failure demand’ - when customers have to make a second call to clarify some problem that was not dealt with properly the first time round - is down. Motivation is up. Our net promoter scores are up across the board.

I have no doubt at all that we can differentiate our products and services from those of our rivals by striving to offer a better level of customer service than they do. And for us, this enhanced customer service is won by focusing very carefully, thoughtfully and creatively on how the agents in our customer contact centres actually talk to customers - and the authenticity and care with which these agents respond to customers’ needs.

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