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‘The customer is always right’ was an adage coined over 100 years ago; but what does it mean as no-one is always right, nor always wrong?
If you believe it is critical that your customers have trust and confidence in your products and services, then you might think it best to help your customer to be right. Doing that might mean helping customers not to make mistakes or supporting them with the right advice or producing products and services that meet their needs.
If you were diligent in this endeavour, you would not assume that all customers were the same. You would almost certainly be employing market research that would tell you that your customer market is quite diverse.
Just as not everyone is right, not everyone has the same needs or the ability to understand your product or service, more so if that is an insurance policy whose value is only realised when a loss is suffered.
If you do not get it right at the time a claim is made, then the customer’s trust and confidence is lost. ICNZ has a vision that New Zealanders have trust and confidence in insurance, and we have a Fair Insurance Code to support that.
But if we are honest, the existence of the Code has not prevented us from not meeting some customers’ expectations nor our conduct regulators’ expectations. This has partly led to the Conduct of Financial Institutions Bill (CoFI) which sets out broad expectations of what it means to treat customers fairly and a requirement to have a good conduct programme.
Much of what the law says, and what regulators expect, is no more than good business sense. At its core, it requires insurers to look through the lens of the customer and pay due regard to their interests.
It means acting ethically, transparently and in good faith, all elements that have been in Code for many years.
It also means helping customers to make informed decisions. Informed decisions require that customers understand the decisions they are making, such as, what their policy covers them for.
Our Code promotes the use of plain English policy wordings. It would be interesting to see how policies would fare if they were tested on consumers for their understanding.
Of course, English is not the first language of many New Zealanders, so plain English only goes so far. And while we strive to make it easier for customers by enabling online purchases, not everyone is comfortable doing business digitally.
Helping the customer to be right also requires us to register that one size does not fit all. We need to think about who is likely to be more vulnerable and how to help them over the line too.
So, being a successful insurer means having a deep understanding of the differences across the customer base as much as understanding common needs. A diverse workforce that reflects our society will achieve better outcomes for all customers if it is a focus for each employee.
This is simply good business, so compliance with the law is a by-product of doing that.
Where insurance is not sold directly to the customer, there is a shared responsibility with the intermediary to work together to ensure the outcomes for the customer are met in terms of their needs and being treated fairly.
So, devising ways to get direct feedback regularly from customers, or via their agents, will be important to ensure products and services evolve to meet changing needs and risks.
In a sense the customer is always right. It is our job to make it right for them and so earn their trust and confidence. CoFI will require us to put the customer at the heart of our decision-making, but we should be doing that anyway.
