ARE YOU A TRUSTED ADVISOR OR A HEDGE BETTOR ???
Have you ever had a good friend or an important client ask you for a recommendation for your favorite restaurant? And even though you’ve been frequenting Jim’s Steak and Seafood Restaurant for years, knowing the food is excellent, the service is impeccable, and the owner will take extra steps to make sure every customer is well taken care of, you hedge your bets by throwing out the names of two or three establishments in the area, without recommending Jim’s, even though you know that’s the place for your friend or client to go. And you do this because you are concerned that if you recommend Jim’s, and the friend or client has a problem with the food or service, it will reflect badly on you. Of course not. Life is like a game of cards. We cannot predict which cards we will be dealt, but we’re taught to go with our longest and strongest suit.
99 percent of your visits to Jim’s have been fantastic. There was that one time that your soup was cold, but Jim sent you out a complimentary drink, and he took the soup off the bill. You came away very pleased, but you don’t want to chance it with your friend or customer. So instead, you let them choose a restaurant from your list, hoping things go well, but knowing they can’t blame you if they don’t.
There are three things that can happen in this scenario. Your friend or customer rolls the dice and has an excellent, mediocre, or poor experience. If the experience was mediocre or poor, how does that reflect on you anyway? Especially if another friend or advisor hearing the tale says “Oh, you definitely should have gone to Jim’s”. Now your friend or customer is wondering why you didn’t make the recommendation for the place everyone is saying would have been the best choice.
Well, this is what is happening in the insurance world. Insurance Agent Trade Associations who sponsor CE courses are teaching agents not to recommend their longest and strongest vendors, in case something goes wrong. That way, the customer can’t blame the agent. I personally believe that the chances of a customer suing their agent for recommending a reliable and respected vendor is practically nill.
I also believe that the insurance organizations who sponsor these courses are hoping to create more competition to drive down the costs of insurance claims. If you’re dealing with an honest vendor, say a restoration company who has been repairing homes or businesses for many years, they are giving estimates based on doing the repairs correctly, with good materials, and adding in a reasonable profit.
If you are asking the restoration company to lower their pricing, that money has to come from someplace. There are companies out there who will cut corners in order to receive work. Therein lies the insincerity of an industry that tells its’ agents not to recommend the best vendor for the job, while creating “Preferred Vendor” programs. To become a restoration preferred vendor, you don’t necessarily have to be good at what you do, but, just willing to do the work at a discounted rate. Across the country, large insurance companies are recommending these preferred vendors to your customers, many of these companies being the weakest choice in their market, unable to get work on their own, thus willing to discount their pricing, and most likely discounting the quality of their work and the materials they use.
In a recent survey of 200 EMEA Insurance Executives, the general consensus was that reputation and trust in brand would no longer be enough to attract and retain future customers. Some key observations:
- Knowledgeable and helpful staff is most effective for customer retention.
- Successful insurance companies in the future will offer non-insurance products to help retain customers (i.e. fire protection services, security systems, etc.)
- Consumers expect their “trusted advisors” to give them helpful and accurate advice.
So, the next time one of your insurance customers comes to you, their trusted advisor, and asks for a recommendation for a company to return their home to pre-fire or water damage condition, will you roll the dice and throw three names at them? Or possibly worse, let an insurance company push a “preferred vendor” on them? Or, will you stand up and refer them to the company that you know will work for them, and won’t cut corners in restoring their most valuable possession to its’ former glory? I know which choice I would want my “trusted advisor” to make.
Gary Pinckney is a partner at the G.W. Savage Corporation in South Burlington and Rutland, Vermont. G.W. Savage Corp. is a total emergency restoration company, in business for over 40 years. An I.I.C.R.C. certified company, we train and certify our technicians in cleaning and restoration (fire, water, smoke, mold). Our goal is to deliver a quality product and positive experience to our customers. If you enjoyed this blog, please share it.
