They have 180 employees. Using their Service Guarantee, market share has increased from 20 percent in 1996 when Tom Raffio took over as President and CEO in their 3 states to 60 percent in Maine, and 75 percent in New Hampshire and Vermont. How many insurance companies in the world can claim this kind of growth?
I always try to help readers of this newsletter understand the financial impact of the service strategy. I believe the number one reason so few firms implement the service strategy is because they have no concept of the financial returns and how it impacts market share, revenue and profits. Frankly, it is like pulling teeth to get a firm to really buy into the service strategy. Some firms do it for 4 months, some for a year, even a few for years. Tom Raffio is a role model for great service right up there with Jeff Bezos, CEO of Amazon the second wealthiest person in the world and Vernon Hill, founder and CEO of Metro Bank in London.
27 years ago in 1990, Tom Raffio worked with Robert Hunter, DMD to roll out the Service Guarantee at Delta Dental Plan of Massachusetts. When he took over as CEO of Northeast Delta Dental in 1996 he immediately implemented the Guarantee of Service Excellence (GOSE).
First, they identified the eight most critical things their customers demand. Then they backed up each of these with money. The one I understand the best is they Guarantee they will send an Identification card to each new member with 15 calendar days. They will pay $25 per occurrence per employee. This means if a firm of 200 people signed up for Delta Dental insurance and the ID cards were received on the 16th day they would pay the company $5,000. In 2016 they paid $50.
Total overall payouts in 2016 were $6,647.17. They track each item per month and per year. The results going back to 1999 are on our web site www.customer-service.com/deltadental. On page 94 of my book Achieving Excellence Through Customer Service, I have the results from 1996. The 11th Edition with updated information will be released by the end of February online and will immediately be printed in Russian and later this year in English.
As I am writing this newsletter I keep asking myself why more firms do not copy Northeast Delta Dental. I could spend hours on why this is so powerful. NOT one firm in the world has copied Tom Raffio and Northeast Delta Dental. Amazing. They have no secrets. They spend $1,136.94 per full-time employee on training in 2016. They have 427,000 primary subscribers covering more than 834,000 people.
Most organizations say they are sorry when they do NOT deliver. At Northeast Delta Dental they put money on the line.
Total 2016 revenue was $353,057,301
Total 2016 profit was $9,238,481
Total Full-Time Employees is 179.6
2016 Training Summary
Amount spent on training in 2016 was $204,195
Dollars per Full Time Employee = $1,136.94
% of payroll = 1.56%
I encourage all of you to consider a Guarantee of Service Excellence program. It takes commitment, guts, focus, vision, trust in your people, and a willingness to invest in your employees. Northeast Delta Dental competes with some huge insurance companies who are ALL UNWILLING to take them on with their own Service Guarantee. Most firms I guess do not want a 60-75% market share. Tom Raffio can be contacted in New Hampshire at firstname.lastname@example.org