Back in the 1970s, my dad was already complaining about the decline in customer service he’d witnessed in his life time. But then he’d inevitably mention USAA as the shining exception. “How in the world do they do it?” he’d ponder. “No one else seems to be able to anymore. ”

Word of Mouth Delivers Loyal Customers 

When it came time for me to get my own auto policy (some cough-cough-something years ago,) I naturally selected USAA. The thought of shopping around never crossed my mind. Why? Because I knew my dad held them in exceptionally high regard. In fact, nearly every USAA member I know became one because we knew another USAA member -- by word-of-mouth.

What drives all that viral acquisition? The exceptional service experiences USAA delivers. Because USAA customers are so impressed, so delighted by their service experiences, they talk about them with infectious enthusiasm.

Without a doubt, that USAA acquired me as a member is 100% attributable to my dad’s service experience. And because of the service experiences I’ve also had, never have I so much as peeked at a quote from another insurance carrier in my entire life. That’s the kind of customer loyalty most brands would die for, but few see.

Here’s a taste of what’s kept me so loyal:

Twice, I’ve entered claims with USAA -- both times for robberies. The process was effortless:

  1. One phone call
  2. One fax
  3. One check

No receipts, no documentation supporting the value of lost items required, just a list of what I thought it was all worth. “Just fax that list over and we’ll get you your check.” Both times, the checks arrived in under a week. They never threatened to raise my rates or sent me scary letters. They did send me a very polite letter suggesting I might consider moving to a safer neighborhood, which I did.

My most recent USAA service experience happened just last week. I’d discovered fraudulent charges on my credit card and phoned them on New Year’s Day. I experienced zero hold time and was transferred only once. I had full resolution in 6 minutes (yes, I timed it), which included being thanked for my (cough-cough something years) of membership.

Customer Service Trumps All

Now, these kinds of experiences really stand out for me, and it’s because of them that I am not just loyal, but a sincere brand advocate. I am literally proud of this brand as if it were a good friend. I speak very positively about USAA always and it pleases me no end when others do, too. And they do -- a lot.

The USAA story continues to be called out for customer service excellence year upon year by the likes of JD Power, BusinessWeek, Consumer Reports, and notably, by their own customers. The USAA banking division enjoys the highest Net Promoter Score in the US, and its auto insurance unit is #3 (Amazon holds the #2 slot).

How ‘bout that? Turns out folks are more likely to speak positively about their experiences with two very un-sexy brands (banking and insurance, for goodness sake!) -- than almost anything else. Wouldn’t you expect brands like Apple or Sony to top that list? Nope. It’s USAA year after year.

What that says is that as consumers, we are more influenced by the way brands service us than by the way they innovate. We value the way businesses treat us more than we value the products they put in our hands. The USAA story is a testament to the role that the service experience plays in creating brand equity -- it’s the lead character.

Here’s how the USAA service experience touched my own customer life cycle:

  1. I became aware of USAA because of their reputation for service excellence.
  2. Because of the USAA service experience my father had, I was acquired for zero dollars.
  3. Their service experiences are so fast and simple, they incur very little expense when they deal with me (a fax here and there, a couple of 6 minute phone calls …)
  4. Because they give me good service, they’ve locked every other carrier out of my consideration set. 

And here’s the ROI on those services experiences to USAA:

  1. I’ve given them $42,200 in fees over my membership.
  2. They’ve paid me $4,000 in claims (for the robberies).
  3. USAA has profited from their relationship with me over its lifetime by 950%
  4. They were able to influence my behavior to better benefit the business—they got me to move to a safer neighborhood.
  5. I’m a predictable, reliable revenue source to USAA.
  6. I am an enthusiastic brand advocate.
  7. They can count on my membership fees with great confidence.

So how has USAA managed to hold on a commitment to service when no one else seems to be able to? My theory is that it’s because it has community-based DNA.

In 1922, a community of 25 US Army officers got together and decided to insure each other’s vehicles. Today, United Services Automobile Association is still a community of military personnel and their dependents insuring each other -- but it’s also a Fortune 500 financial services giant offering everything from banking to brokerage services to life insurance.

USAA didn’t begin as a business that embraced community. It began as a community that embraced business. I suspect this is what gives them their stand-out ability to create deep, lasting very positive customer relationships. But whether their community roots are truly responsible for their continued commitment service excellence, I really can’t say. That they continue to deliver the best services experiences I’ve known is certain.

Editor's Note: Interested in reading another perspective on the Customer Life Cycle? Try Ian Truscott's Navigating the 3 C's of Customer Experience - Step One: The Customer