Assignment 3: USAA Gap Model Evaluation PDF

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This assignment showcases how USAA accomodates each of the gaps presented in the Gaps Model....

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Services Marketing Assignment 3 USAA United States Automobile Association (USAA) is a preeminent example of a company focused on building long-term relationships with customers. Customer retention has been a core value of the company since long before customer loyalty became a popular business concept. In business since 1922, USAA provides for the insurance needs of a highly targeted market segment: current and former U.S. military personnel and their families. Headquartered in San Antonio, Texas, USAA owns and manages more than $110 billion in assets. It has been ranked number 1 in a list of “Customer Service Champs” by BusinessWeek and consistently appears on Fortune magazine’s list of the 100 best companies to work for in America. Customer retention figures approach 100 percent. The goal of the company is to “think about the events in the life of a career officer and then work out ways to help him/her get through them.” The company is intent on serving its current customer base and growing them. To do this, USAA relies heavily on customer research through surveys and a member advisory board that meets regularly with executives. The company also focuses on retaining the best employees and rewarding them for customer-oriented objectives such as percentage of customer questions or requests handled on the first call with no need for follow-up. USAA believes so strongly in the importance of customer retention that managers’ and executives’ bonuses are based on this metric. Such emphasis is rewarded: independent research firms report that 81 percent of USAA’s customers believe the company does what is best for them rather than for the bottom line. A striking example of how USAA attempts to listen to the customer is illustrated in this excerpt from BusinessWeek: Many companies give lip service to listening to the “voice of the customer.” At USAA, that voice is transformed into what it calls “surround sound” - a comprehensive approach to training its employees to empathize with its customers’ unique needs. “We want to cover the light moments, the heartwrenching moments, what it’s like to be bored in the field,” says Elizabeth D. Conklyn, USAA’s executive vice-president for people services. “We try to develop empathy, not only for our members but also for the family side.” USAA has developed an enhanced military awareness program that requires customer service representatives to engage in tasks that allow them to empathize with their customers. For example, employees may have to strap on a military helmet, 65-pound backpack, and flask vest; consume a “meal ready to eat” (MRE) given to soldiers in the field; and read real letters for troops stationed abroad. USAA also archives complete information about its customers in the form of electronic files. These files are accessible to all of its customer service representatives throughout the organization, who can then

use the information to personalize and customize each service encounter – often times without having to consult with anyone else in the organization. Although these tactics obviously cost USAA thousands of dollars, actions such as these clearly indicate USAA’s commitment to its current members, serving to ensure their loyalty, and strengthen their relationship with the company. Based on the above case summary, identify how USAA is addressing the four provider gaps. I. The Listening Gap: The company’s goal to “think about the events in the life of a career officer and then work out ways to help him/her get through them.” is their way of attempting to understand the customer’s expectations by placing themselves in the customer’s position. The surveys conducted by customers and the regular meetings with the member advisory board are ways of obtaining market research to gain more insight on what it is their customers expect from the business.

II. The Service Design and Standards Gap: The military program that USAA has created in order to allow its employees to emphasize with its customers is definitely a plan to meet the customer’s expectations. Having the employees engage in the day-to-day situations that current or prior military personnel are faced with is a great way to ensure that employees can relate to the customers they are interacting with daily.

III. The Performance Gap: USAA even provides its employees with complete files of customer information that are available throughout the organization to allow each customer experience to be personalized; this is definitely a measure that executes delivering the service standards of empathy and a customized experience.

IV. The Communication Gap: The recognition that USAA receives as a company illustrates how it delivers what customers are promised. USAA was ranked #1 in Customer Service Champs by Business Week and constantly appears on Fortune Magazine’s list of 100 best companies to work for. USAA has embedded customer retention into its company policy from the beginning and also has retention figures that are approaching 100 percent. This tells us that USAA’s performance matches its promise to customers....