The Radial Organization

Different types of business models have over the past been brought forward and adopted by companies as they work towards customer acquisition and retention. Some of these have proved aggressive and worthwhile while others deviated from this and ended up scaring customers away.

Over time, however, one specific method seems to constantly bear fruit and nothing exemplifies it more than the success of the institution that adopted and embraced it and later inculcated it in their operations.

The method entails ensuring your organization a radial organization and the institution in question: United States Automobile Association.

The USAA

The United States Automobile Association was founded in the 1920s by a group of army officers. The realization that their ‘high risk’ profile disallowed them from receiving amicable insurance didn’t auger well with them so they formulated the brilliant idea to self-insure one another. Over time, the institution’s revenue grew by over 11.4% to $27.1 billion in 2016 from $24.4 billion in 2015. USAA’s net worth increased by 3.8% to $28.8 billion due to its solid net income. Assets increased 7.5% to $147.3 billion, as a result of growth in its investment portfolios and cash inflows from member deposits. With many of their facets morphing with the changing times, one thing, however, remained constant: their customer-centred culture.

The founders of the organization had one dream, to provide insurance to their members. As such, they formed the organization on the premise that their members would always come first and as they grew, this didn’t stop. To date, their customer base is mainly comprised of military, retired military and their families, a factor which has necessitated the firm’s need to stick to the course as they look to their slogan for guidance: “We Know What It Means to Serve”.

Atop Customer Relation Management

Few brands in the world build on client experience but none epitomizes it like USAA. They have built all the above on two key pillars: empathy and technology. According to Forbes, “USAA the best customer company in the world”.

This is mainly because a large part of USAA’s resources are directed towards ensuring that their employees are indeed in tandem with the clients they serve. The employees go through a process that enables them build some form of synchrony with the military personnel they serve. Exercises such as receiving bona fide deployment letters and ‘meals ready to eat’ create an aura of steeped in military experience for the workforce and this in turn translates to them ably relating with the customers.

This is exemplified by the fact that after the first Gulf War (1991) USAA sent out refund checks to several thousand “members” (customers). This was after they figured out that men and women (armed forces) serving overseas weren’t driving their cars in the USA, suspended the premiums for those months, and sent out unsolicited refund cheques when these men and women got back to the USA. However, nearly 2,500 of these refund cheques were sent back to USAA by grateful customers.

The culture described above links strongly to the fact that USAA is a purpose driven organisation that is very rare, particularly in US Financial Services. This has so far resulted in the company standing in lead with a dominant 21% lead on the industry average based on the empathy scale.

Moreover, their advancements in the technological space have only come to underscore their already established customer relation framework. With tools such as mobile service, cloud-based cell phone application as well as biometric authentication technology, the firm can now reach their customers upon the realization of fraud or other suspicious transactions emanating from their cards. One of their clients went ahead to detail this when they said “I have a USAA credit card. I enjoy their fraud alert department – they really look after me. Once I tried to make an out-of-state purchase, and they called me to make sure it was okay before approving,” while another added “Recently had to file an automobile accident claim and was very pleased with the help I received from the customer service rep… They were very helpful and efficient and took care of setting me up with both a repair shop and a car rental agency. I could really tell that they wanted to give me as much help as possible.”

The success of the strategy adopted by USAA cannot be further underscored. Furthermore, it would be imprudent not to recommend its adoption for any other organization as the results are quite visible as is seen below.

On Top of The World USAA has for two years running bagged the coveted top rank United States’ Customer Experience Excellence (CEE) ranking. The company scored an amazing 8.69, making it the highest scoring company in 2016. This award came upon the backdrop of advances alluded to previously in this piece and, based on everything, seemed well deserved.

The fact that they are indeed the best at this for two consecutive years signifies a lot and tells the amazing tale of the success of the radial organization. With word going round that ‘USAA won’t sell you more insurance than you really need, even if you mistakenly ask to do so,’ little will stop them from maintaining this title in the eyes of their customers.

With all said and done other global organisations both within the financial sector or otherwise need to actually re-evaluate the strategy and find how the radial organisation would work for them as it has done for USAA.