who is the redheaded stepchild of allstate's Distribution system?

most of which are not customer-centric
at all, but rather profit driven. Take agent
commissions as an example. For the past
few years, the company has stated time
and again that their surveys indicate that
consumers believe the value of having an
agent is worth 8%. This not-so-subtle
message, reiterated over and over, was intended
to lessen the blow of the commission
cut the company knew it would eventually
propose. Naturally, consumers want
to pay as little as possible and will state as
much in a survey, but will our customers
really leave us in droves because we earn
10% instead of 8% or 9%
Fatal error: When the entire economy
took a drastic downturn in 2008, Allstate
failed to alter its pre-recession strategy.
Consumers cut back, started shopping
more and began demanding reductions in
prices and/or more for their money. Allstate
arrogantly maintained that consumers
would gladly pay more for the “brand”
and refused to modify their products or
its pricing. This stubborn resistance to
change in a chaotic market, combined
with the ongoing reduction in the sales
force, has yielded devastating results.
“Putting the customer at the center
of all our work” What the customer
wants is a good product at a competitive
price, backed up by good service and fair
treatment at the time of a claim. Like the
wheel, this is not a concept that needs to
be reinvented. If you focus on the product,
the platform and the promise, the
rest will take care of itself.
A good product at a competitive
price: A good product is not about fooling
people with gimmicks, it is about
providing a policy that does what it
should at the time of a claim. And, the
price must be competitive.
The platform must be fixed: Technology
woes at Allstate are probably some
of the worst in the industry. Agents, staff
and technology vendors who are familiar
with the company’s agency technology
are in disbelief that a company with the
size and reputation of Allstate is in such a
state of technological disarray. There is a
constant barrage of issues that agents and
customers must contend with on a daily
basis. From the system frequently going
down to policies renewing with missing
discounts or incorrect surcharges, agents
and staff are forced to spend countless
hours in limbo or fixing errors. If everything
is about what the customer wants,
the technology platform must perform.
“
Wilson and his
senior advisors have
ignored many of the
macro issues and
focused instead on
micro issues.
“
The promise: The Allstate claim experience
should be fast and painless. The
best advertising is when customers boast
how fast and fair their Allstate claim
experience was. Our claim partners are
a key asset for the company and should
be treated accordingly. They deliver the
promise every day to our customers, yet
they are being overloaded with work they
can’t complete unless they cut corners.
Unhappy employees will never equate to
happy customers, a fact that seems lost
on Mr. Wilson. The fact is, since 2008,
Allstate has ranked well below average in
the JD Power Auto Claims Satisfaction
Study. This workload and morale problem
in the claims department must be
fixed immediately.
Who’s steering the ship There are
currently 15 senior level mangers listed at
allstate.com. Only two have been with the
company more than 10 years. The average
tenure of the rest of this team is 3.4 years.
Ten senior level managers have been appointed
by Mr. Wilson since 2007.
Tom Wilson seems proud of the fact
that 60% of his leadership team is new to
Allstate. This group has an average of 1.5
years of Allstate experience – is this something
to boast about When an 80-yearold
company flourishes for 75 years and
then stumbles because it has strayed too
far off-course, it is time to get back to basics.
It is not a time to experiment with
the composition of your management
team, especially if they lack both Allstate
experience and industry experience. Yet
that is exactly what Mr. Wilson has done,
causing the loss of more than two million
policies and no prospect for improving results
any time soon.
Out with the old, in with the new: Mr.
Wilson seems to have a penchant for
eliminating the most experienced people
at Allstate. Like Sherman’s March to the
Sea, Wilson has laid waste to anyone he
believes is standing in his way. The casualties
include top tier leaders like George
Ruebenson, Joe Richardson and, of course,
Joe Lacher, as well as thousands of dedicated,
experienced Allstate agents. As he
picks off his loyal and most experienced
generals, he follows the same process with
his most experienced troops, as if they are
all somehow responsible for the downward
spiral of the company. What rational commanding
officer would take out his best
regiment in the middle of a battle and attempt
to create a new army with untested
leaders and untrained troops For four
years running, Mr. Wilson has been terminating
experienced Allstate agents while
simultaneously attempting to replace them
with greenhorns, many of whom have no
previous insurance experience. This is not
meant to be disrespectful to new agents; it
is only intended to question the wisdom of
Mr. Wilson’s flawed strategy.
Additionally, the company seems to
have a fetish for micromanaging agency
operations, and it has increased exponentially.
Rewards for retention and profitability
have been eliminated and have
been replaced with EB, ALI, and woople.
Conflicting programs and objectives have
resulted in agents receiving congratulations
for attaining Premiere Service
Agency (PSA) status one day, and a contract
termination letter the next.
You’re not the only one who’s confused:
The company has done a good
job of hiding these conflicting hiring/
firing practices. As recently as the third
quarter earnings call, Ian Gutterman of
Winter 2011/2012 Exclusivefocus — 27