New Study Reinforces Importance of ‘People Behind the Product’

Aug. 17, 2010
Companies that invest in people development activities to drive customer service, including sales training and employee recognition and rewards, may perform better than firms focusing solely on brand development, marketing and advertising, suggests a new study published by the Forum for People Performance Management and Measurement.

The study, “The Employee or the Company: The Relative Importance of People versus the Company Brand on the Customer Experience,” authored by Forum Academic Director Dr. Frank Mulhern of Northwestern University, predicts a return to more direct customer contact and less reliance on mass media advertising.

”Brands will always remain important. However, as technology enables greater addressability of communications and interactivity becomes mainstreamed, we may see a return to the pre-modern business world where personal relationships matter more than brand names,” Mulhern said.

While these relationships are more common to personal service businesses such as health care, financial services and education than mass retailing, the Forum’s study focused on the nation’s personal insurance industry (life, health, auto and property), which showed dramatic links between sales agent performance and customer retention and new business.

A series of surveys conducted for the study showed that customers consistently rated the insurance sales agents higher that the insurance company itself. “The customer’s experience with the agent is more important than the customer’s experience with the brand in driving performance,” Mulhern noted. “The person is more important than the brand.”

The research study is on the Forum’s Web site at http://www.performanceforum.org/Research.5.0.html.

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