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Improving Your Relationship Management

A formal process can help you assess your performance.

By Patrick McGuigan, CLU, CHFC, CPCU, FLMI

In an increasingly complex world with more competition, a more demanding consumer and relationships strained by a lack of time, it is critical to assess your relationship performance. If you leave relationship management to chance you may end up watching your customers get their needs filled elsewhere. A three-step process can help you improve relationships and enhance your professional image.

  1. Evaluate your relationship-management performance.
  2. Measure yourself against the predictors of trustworthiness.
  3. Create an advantage proposition.

Improving relationships demands the involvement of others because you may not be the best judge of your abilities. The overconfidence bias prevents people from forming objective opinions about their own performance and capabilities. This bias is a tendency to attribute success to internal factors and failure to external factors. We are successful because we are great and have the skill, and we fail because of the full moon or somebody put a hex on us. The bottom line is that we may not be the best judges of our own performance.

The 360-degree review
Obtaining a realistic and rounded judgment of your performance requires a formal evaluation of your performance. Human resource professionals have long advocated the use of a 360-degree appraisal, which looks at all the stakeholders of your business to assess your performance. Critical stakeholders in your practice include managers, customers, underwriters, trusted peers, employees, associates and suppliers. Those above you, below you and around you appraise your performance.

The 360-degree review gives you a rounded and objective view of your performance. This is a difficult process to undergo because you may learn some things about yourself that you would have preferred not to know. It is critical to know what your strengths and weaknesses are. You want to focus on your strengths and delegate your weaknesses to employees to dramatically improve the performance of your practice.

The survey instrument you use should be easy to follow and limited to the front and back of one standard sheet of paper. You should ask people to rate you on a scale (5 = Excellent, 4 = Very Good, 3 = Okay, 2 = Needs Improvement, 1 = Poor) to determine how well you are performing in each area you inquire about. Your survey should include multiple dimensions of your performance and perceived professionalism.

The scaled questions you include should inquire about communication, initiative and dependability, performance, credentials, knowledge, relationship building efforts and professionalism. Try to limit the survey to 20 scaled questions and ask four open-ended questions as well:

How would you describe your overall experience with _______?
How has interacting with _________ been different from what you expected?
Do you have any suggestions for improvement?
Would you refer a friend to ______________?
It is important that the people who you ask to evaluate your performance be assured that their responses will be anonymous and confidential. You will get a better result if you have a third party administer the process. This will require an investment in your business, but you must consider it money well spent.

This is not an opportunity to survey the needs of others so that you can sell them something. By discovering and exploiting your strengths, you will build a stronger practice and better relationships and have greater personal satisfaction. More importantly, with this knowledge you will be able to align your objectives with reality. The opinions of others matter, and if you have the courage to undergo this process you can learn a lot about yourself and how you run your business.

Predictors of trustworthiness
It may be difficult to assess if another person trusts you, but you can measure your performance against the factors that predict trustworthiness. These predictors have been consistently shown to impact trust. The word “trust” is often used without any regard for its true meaning. Defining trust may not be possible, but understanding the factors that predict trustworthiness is important.

Most objections can be boiled down to two factors: a lack of trust or understanding. When a client says: “No” he is really saying: “I do not trust you,” or “You do not understand me.” A lack of understanding generally stems from the agent attempting to close a sale before he has spent the proper amount of time gathering information about the client and his circumstances.

A lack of trust is more difficult to diagnose. Consumers should be able to trust their agent, feel safe in their dealings and be assured that their dealings are confidential. The relationship between the agent and the consumer evolves over time. Early in a relationship, consumers are faced with not knowing what to expect of the service and because it is intangible, they perceive greater risk. Consequently, consumers need to have initial confidence in their agent.

Competence, ability to customize solution, promptness and reliability pertain to the agent’s ability to deliver the services he claims to offer. Empathy and politeness pertain to the agent’s personal characteristics or manner of delivery. The consumer’s response to these factors determines the nature of risk that accompanies the establishment of a relationship with the agent. The fact that the consumer perceives the agent as trustworthy is a critical success factor.

The predictors of trustworthiness should be incorporated into the 360-degree review. Competence is the degree to which a customer perceives that the agent possesses the required skill and knowledge to provide the basic service. Reliability and promptness refer to the delivery of the product in a dependable and timely manner. Customizing solutions is directly related to the agent’s skill level, variety of products represented and knowledge of the client.

Today, more than ever before clients want customized solutions--products that are tailored to their specific needs. Empathy is a term intimate to every agent, but it refers to the degree to which the agent possesses a warm, considerate and caring attitude. Politeness is the degree to which the agent is perceived as being considerate, tactful, deferent or courteous.

Your advantage proposition
Once you have gained a greater understanding of you relationship management skills, you need to craft an advantage proposition. This statement should succinctly define why a person should do business with you or refer someone to your practice. The perceived risk of selecting the proper agent is high. Evaluating insurance agents is a complex task. The service is purchased infrequently and the consumer does not have much direct experience with making this type of choice.

Compounding an already difficult problem, the consumer may not be able to sufficiently define the problem. Most service providers are adept at making the evaluation process easy for potential buyers. When the lawn mower stops working, the consumer has little trouble identifying the problem, selecting a service technician and applying a set of criteria to evaluate each. Why is selecting an insurance agent so much more difficult?

In order to make an informed choice it would be helpful if the client clearly understood your advantage proposition. This is a statement that outlines the benefits he should expect from your practice, It explains why you are different and better than the insurance agent down the street.

The advantage statement is a public proclamation of what you and your practice stand for. The statement transforms your beliefs into action, but at the same time, it creates accountability. You must be prepared to stand behind your proposition and take action so that each client can count on consistency from your practice. In an age of accountability, we must be able to demonstrate that the things to which we have committed ourselves have been done, and done well.

For a sample letter and questionnaire you can use with your clients, peers and employees to identify what they think of your service and level of professionalism, click on “Relationship Management Tools.”

Patrick J. McGuigan, CLU, CHFC, CPCU, FLMI, is an advisor with Atlantic Financial and an assistant professor of management at Pace University. He may be reached at


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