When conversations in my community turn to today's economy, I am repeatedly asked, how did this happen? Why is the stock market so crazy? Will the economy ever get better?
The questions come from people with differing backgrounds, education, or industries. They want to know, understand, get some control.
Many of these conversations end up focused on the "bad news" effect–how bad news from a company, perceived or real, can harm reputation, and how that can harm confidence, leading to lower sales, customer defections, and so on.
Insurance product experts, in the field and home office, know this all too well.
As soon as American International Group's financial problems hit the news this fall, advisors and brokers say their phones were ringing. Worried customers were calling to see if their insurance was all right. They reportedly asked: "Should I pull my money from that contract?" "Are all insurance companies in trouble like that?" "Shouldn't I pull my money out?" "I thought you said insurance is safe!"
Home office people tell me they've heard similar comments, via their call centers or wholesalers, brokers and agents.
So, just like that, the bad insurance news of the day has cast a negative light on insurance products of various types and providers. It has hurt the image of the entire industry and its practitioners.
At times like these, industry experts always like to point out, advisors will be able to calm their clients' rattled nerves and to retain business–if, that is, the advisors have sold their products properly and established trusting relationships with their customers.
That makes a lot of sense, especially if the bad news is of the routine variety–i.e., Company A's ratings have dropped from the previous quarter.
But if faced with "really bad news"–such as today's credit meltdown, global recession, etc.–it's another story.
In time of "really bad news," advisors and companies must rely on more than past educational sessions, service and support. They need to educate (or re-educate) customers about how insurance products, services and companies perform in the face of tremendous challenge such as today's.
In short, times of really bad news call for really good customer engagement.
