Posting for

Thursday, June 4, 1998

by: Bert Rush

brush@firstam.com

CUSTOMER SATISFACTION/ALTA-GALLUP POLL/CUSTOMER FIRST

At the National Training Meeting two weeks ago we discussed the results

of the ALTA/Gallup Poll measuring attitudes about title insurance held by two important groups: Consumers and lenders.

The poll was inspired at the ALTA Convention last September in Seattle.

One of the ALTA committees had invited a representative of the lending industry to visit. The visitor turned out to be a fairly strident type--who pretty much told the committee that lenders don't need title insurance, it costs too much for what it delivers, and we would serve their industry best if we'd just sell 'em title information at cut rates.

In the wake of this ALTA commissioned the Gallup Organization to poll consumer attitudes about title insurance and, at the same time, ALTA's Gary Garrity (VP--Public Affairs) was directed to interview a select group of leaders in the mortgage lending industry--from Fannie and Freddie to MBA Governors to some large regional lenders. The results were published last December.

The results of the lender interviews were very positive--but that's not what I want to talk about today--see Gary's report (given to the training coordinators at the National Training Meeting).

The Gallup poll of consumers targeted 1,002 households nationwide. At first this seems to be a small sample--until you realize it's fairly typical of modern opinion polling techniques, which generally have 1,000 to 2,000 respondents and claim a 3% or so margin of error. Gary Garrity says this poll was Gallup's standard product, and we could've paid more to bring in more respondents with, perhaps, more carefully crafted questions. Still he feels the poll results are pretty reliable.

Here are some of the findings: To the question "Do you presently own your home?" 65% of respondents answered "Yes," 35% "No." The most recent information published by the U.S. Census Bureau indicates 65.9% of Americans own their home.

To the question "Did you acquire owner's title insurance when purchasing your residence?" 69% said "Yes," 22% said "No," and 9% said "Don't Know."

To the question "Did you personally select the title insurance company providing your owner's title coverage?" 48% said "Yes," 48% said "No," and 4% said "Don't Know. This surprised me--I'd have guessed no more than 20% would say they personally selected their title insurer. Gary Garrity says it originally surprised him too--and it may be that in answering some respondents confused having selected the agent (a "title company") with having selected the insurer--but if this finding is off Gary thinks it's not off by much. He found when he interviewed lending industry representatives many of them reported dramatic increase in consumer awareness of title insurance following heavy refinancing activity over the past five years.

More surprises: To the question "If someone else determined which title insurance company should provide the title coverage in your home purchase, was that party....?" 39% said the Lender, 23% said the Real Estate Broker, 13% said an Attorney, 11% said "Other" (I'm betting builders fall in here), 6% said the Settlement Agent, 5% said a Friend or Relative, and 2% said a Bank.

Now remember, the above figures are from the 48% who said "Some-one Else." If you want a clearer picture, it seems to me you should halve these figures--since they come from about half the group you're interested in (ie., homeowners who obtained owner's title coverage). When you do that, and round to the next highest number, here's your result:

Who selected the title insurance company providing your owner's title policy?

Homeowner--48%

Lender--20%

Real Estate Broker--12%

Attorney--6%

Settlement Agent--3%

Friend/Relative--3%

Bank--1%

Someone Else--3%

Don't Know--3%

The point: Consumers have greater awareness of title insurance than we may have thought. It also appears they differentiate between companies--they CHOOSE. Customer satisfaction is more important than ever. Our execution of the Customer First program is more important than ever. If you are in an agency-driven region, your agents are your customers-they should appreciate your help in setting and pursuing their own customer satisfaction goals.

Another thing: It's now more important than ever that First American enjoy a high profile company image--that First American becomes the brand name that consumers associate with real estate information and insurance.

We discussed ways to reach these goals at the National Training Meeting--so those of you who attended please re-review your Agenda and keep them in mind as you plan and execute your training. A person I wanted you all to meet, but who couldn't attend, is Rosemarie Block, our (relatively) new person in charge of coordinating Customer First Program efforts. Rosemarie has published a newsletter--which I think we handed out at the meeting. Anyhow, if you have questions or want support with Customer First I'm sure Rosemarie would like to hear from you. She's here at Home Office in Santa Ana.

Questions, comment, argument? Just press the "Reply" button and send your thoughts to LandSakes.

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Following Thursday's posting, Anne Lanphar writes:

If the consumer has such an awareness maybe we should do more marketing aimed at the consumer. Allstate and the other insurance companies advertise their payment of claims especially after major disasters. We should start creating advertisements that show problems that occur and that First American was there! By not doing this we play into the hands and control by the brokers which is reflected in their idea that they control the business and therefore should be entitled to "fees"! Obviously we can't attack the brokers but we can start and education of the public as to who we are – if we do this we would certainly be the first and therefore the most visible!

Reply to Anne: This reminds me to pitch Cliff Morgan's testimonial project. Cliff sent a memo about ten days ago asking for help from our claims counsel, etc., in collecting stories from satisfied customers--for advertising and legislative purposes. These stories don't need to involve an actual claim or loss--just a real title problem taken care of in an interesting or dramatic way by one of our offices or agents. Be on the lookout for stories involving ordinary folks--consumers. I hope everyone gets behind this. For further info contact Caroline O'Kelley in Home Office Underwriting.

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Carol Brooks writes:

New Hampshire has an Insured Owner who is very thankful they bought a policy, as it provided them with Defense Counsel! After acquiring their lot in a lovely subdivision, a suit was filed by group of owners in another subdivision. Our Subdivsion is the 'old back lot' with deeded rights of access to the road and beach on the 'old waterfront lot'. The waterfront subdivision owners are just tired of sharing beach and road rights with the 'back lot' neighbors and filed suit. Each day in Court, our Insured's remind their neighbors that buying title insurance is just the best investment. The case is not yet over, but our Insured's have peace of mind that we stand to protect their interest. When the suit is over, I intend to contact them...perhaps they would agree to a testamonial!