Chapter 2

Question 1

What does ESG stand for and how does it relate to customer service?

Answer 1

Environmental, social & governance

What a customer chooses to buy and where from is increasingly influenced by an organisations ESG agenda.

Question 2

What are the two main categories of customers?

Answer 2

Private individuals
&
Commercial customers

Question 3

Private and Commercial customers can be further classified how?

Answer 3

Geographically i.e where a customer is based e.g in the UK or not

Demographically e.g by age, income level or educational background

Question 4

What 2 categories may customers fall into?

Explain them

Answer 4

External customers
A person or busniess who is not an employee of the company and who is in a position to buy or use the company’s products.

Internal customers
Employees of an organisation who recieve a service from other employees of an organisation.

Question 5

In terms of generic needs and demands, what do all customers require?

Answer 5

• Clear and accurate information - easy to understand with no jargon. This applies to documentation, literature and communications.
• Accessible, professional & well informed staff
  -How easy it is to get hold of someone by phoning
  -The phone systems used & use of direct dials
  -The communication of contact numbers and email addresses
  -Ease of contacting someone when using online systems e.g livechat
  -How workflow is managed to ensure work goes to appropriate staff.
• A positive customer experience high quality interactions and use of interpersonal skills such as rapport building and active listening. Electronic communications are personalised to the customer.
• An easy & straightforward transaction process The process may involved multiple departments but as far as the member is concerned, this should be seamless and will only want to deal with one point of contact

Question 6

What 2 factors may concern a private individual more than a commercial customer when buying insurance?

Answer 6

Price & Accessability

Question 7

Why may private individuals be more likely to be influenced by price than a commercial customer?

Answer 7

In comparison to disposable income, the price of insurance represents a significant amount of money for an individual (70% of people change their motor insurance at renewal).

A commercial customer is still influenced by price but is more likely to consider all elements of a package such as value added services.

Question 8

What may commercial customers consider when looking at purchasing insurance?

Answer 8

More complex products
CCs will want to understand the detail of product being offered, how it wil protect their goods and liability and ultimatley, their balance sheet.

Customer relationship management
CCs are more likely to be involved in their insurance, meaning they will have greater interaction with the insurer throughout the year. They will want to understand the claims process and ongoing reserves.

Additional services
Such as risk management and technical advice.

Question 9

Which 2 areas can the demographic of customers have an influence on?

Answer 9

Products offerred
Influenced by age or socio-economic demographic

Communication methods used
E.g if target audience is young backpackers, text message is more suitable than letters by post

Question 10

What is the FCAs definition of a vulnerable person?

Answer 10

Someone who, due to their personal circumstances, is especially liable to be disadvantaged, particularly when an insurance company is not acting with appropriate levels of care.

Question 11

What factors may make a customer vulnerable?

Answer 11

• Age
• Physical impairment
• Mental impairment

Question 12

Where in the world a customer is located can influence their needs and demands how?

3 points

Answer 12

Time zones may alter opening times of the organisation to serve those customers

Language staff need to be appropriatley skilled to communicate effectivley as english may not be a customer’s first language

Cultural staff need to be aware of different values and beliefs.

Question 13

What is customer experience management?

Answer 13

The process of making sure that the customer’s experience is the same, whichever part of the business is involved in serving them.

Question 14

What is a ‘moment of truth’?

Answer 14

Anytime a customer comes into contact with any aspect of a business, however
remote, is an opportunity to form an impression

Customers will have expectations of their encounters with an organisation. The organisation has the opportunity to meet, exceed or fail these expectations.

Jan Carlzon

Question 15

What are the benefits of creating a positive customer experience for the organisation?

Answer 15

Customer loyalty : More likely that a customer will continue to do business with them by renewing their policy or buying additional cover.

New customers are attracted : satisfied customers are free advertising for the company

Improved work envrionment : providing excellent customer service contributes to employee’s sense of job satisfaction whcih raises morale.

Increased productivity : as there are likely to be fewer complaints and errors to deal with

Improved profitability : from a growing customer base

Question 16

What are the benefits of creating a positive customer experience for the customer?

Answer 16

• a fast and efficient service, free from errors and delay;
• speedy claims settlement;
• accurate and effective assistance and advice; and
• value-added benefits, such as a 24-hour helpline.

Question 17

Which 2 are investiagetd when looking to improve moments of truth?

• The when
• The why
• The how
• The who
• The what

Answer 17

The what = ensuring processes work well

The how = how things are said, looking at rapport, empathy, questioning and listening skills

Question 18

How can someone’s customer service experience influence their future buying intentions?

Answer 18

A positive experience with an organisation is likely to enhance customer loyalty and improve retention rates.

If someone has a negative experience, even with another organisation, it will not only influence their choice of purchase but may also influence their attitude when dealing with the organisation

Question 19

How can someone’s brand experience influence their future buying intentions?

Answer 19

Positive experiences will make the customer more inclined to buy from other brands in the group

Question 20

Define contract certainty

Answer 20

Contract Certainty is achieved by the complete and final agreement of all terms
between the insured and insurers before inception.

Question 21

What are codes of conduct

Answer 21

Apply ethical considerations to the profession or industry concerned, guiding members on how to behave ethically in the context of that profession or industry.
These codes do not have the force of
law, but a professional body will have systems in place to discipline those members who fail to keep to their code

Question 22

What are the CII Codes of Conduct?

5

Answer 22

• Comply with the code, all relevant laws and regulations
• Act with the highest ethical standards and integrity
• Act in the best interests of each client
• Provide a high standard of service
• Treat people fairly, regardless of age, gender, sex and race

Hint = CAAPT

Question 23

Which 2 legal rules govern the sharing of ingormation with customers?

Answer 23

• Data protection act 2018
• UK general data protection regulation (GDPR)

Question 24

Outline the data protection act

Answer 24

Concerned with the regulation of data transfer. It covers all information about private individuals, defined as ‘personal data’, that is stored in any type of
system. As long as the system is organised in a way that, broadly speaking, means the data can be interrogated by name, it falls within the scope of the Act.

Question 25

The FCA’s Principles for Businesses (PRIN) Principle 7 is specific to providing accurate information and states what?

Answer 25

A firm must pay due regard to the information needs of its clients and
communicate information to them in a way which is clear, fair and not misleading

Question 26

The FCA’s Consumer Outcomes – designed to ensure the fair treatment of
customers – state in Outcome 3 that organisations should ensure that what?

Answer 26

Consumers are provided with clear information and are kept appropriately
informed before, during and after the point of sale.

Question 27

Name 2 concequences of regulatory rules not being followed

Answer 27

• Effect on customer relationships The customer is likely to remove their business from the organisation which leads to financial losses which could be wider spread from the news being spread
• Disciplinary and fines These could range from prison for directors or fines which also impacts the brand.

Question 28

What does providing accurate information to customers ensure that an organisation is doing?

Answer 28

An organisation is:
* meeting customer’s needs;
* delivering excellent customer service;
* building trust and confidence;
* acquiring new customers; and
* fulfilling regulatory requirements

Question 29

What are the main opportunities/ moments of truth when information is provided to a customer?

Answer 29

• at the point of the initial enquiry;
• when providing a detailed description of the policy cover, including information on
  warranties and exclusions;
• when a claim is made; and
• when a change is made to the policy mid-term

Question 30

What are the consequences of providing inaccurate information?

7

Answer 30

• Damage to reputation
• Complaints (costs to deal with and damages reputation)
• Less new business
• Financial loss (if ineligible claim is made but advised cover is available, it will be paid)
• Disciplinary action
• Less business retained
• Dissatisfied customers

Question 31

What is the FCA definition of a complaint

Answer 31

Any oral or written expression of dissatisfaction, whether justified or not, from, or on behalf of, a person, about the provision of or failure to provide, a financial service.

Question 32

What are some benefits from complaints

Answer 32

• inspire improvements to customer service;
• increase customer loyalty from effective complaint handling; and
• bring financial benefits through ensuring that trends are spotted and appropriate action
  taken, reducing the number, and thus the cost, of complaints in the future.

Question 33

What challanges are posed by complaints?

Answer 33

Emotional energy required to handle and resolved a complaint

&

Operational pressure that comes with having to deal with a complaint quickly

Question 34

Name some reasons that customers dont complain

Answer 34

• It is too much hassle.
• When we have complained in the past, nothing has happened.
• We don’t have the time.
• We don’t like to upset the person we have dealt with.
• We don’t want the confrontation or conflict

Question 35

What different groups of customers will have specific needs and demands?

Answer 35

• Private
• Commercial
• Vulnerable
• Geographic
• Partnerships