Customer experience is most often discussed after something has gone wrong. Things like a denied claim, a confusing bill, or a phone call that requires retelling the same story three times. In these moments, customer experience becomes shorthand for failure—organizational failure to anticipate needs, simplify complexity, or meet expectations during moments that matter most. 

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In the insurance industry, these failures are costly. Poor service experiences cost U.S. companies billions annually, but the financial loss is only part of the story. What is often overlooked is why dissatisfaction persists despite decades of investment in operational efficiency, product design, and network expansion. 

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The answer is uncomfortable for many to accept which is customer experience is a relational problem that requires leaders who at their core understand relationships. Margaret Wheatley (2002) said it best: “Relationships are all there is. Everything in the universe only exists because it is in relationship to everything else. Nothing exists in isolation”. And yet, we continue trying to solve a relational problem as if they were only operational. 

 

The Unique Service Expectation in Health Insurance 

Health insurance customers are not seeking delight or convenience in the traditional sense. Their core expectation is far more fundamental: 

“Keep me and my family healthy—without financially devastating us.” 

This expectation is emotionally loaded, deeply personal, and high-risk. Yet most improvement strategies remain rooted in product logic: more plans, more options, more pricing tiers, broader networks. These levers matter—but they have not materially improved customer satisfaction. The persistence of low satisfaction scores across the industry signals a deeper misalignment between what organizations optimize and what customers actually experience. 

 

Customer Experience as a Social Exchange 

In my doctoral research on health insurance customer satisfaction, I used Social Exchange Theory and Relationship Marketing to study something I had already begun to see in practice: customers experience insurance relationally, even when organizations design service transactionally (Phillips Husband, 2020). Social Exchange Theory suggests that relationships between parties are built not only on transactions, but on trust, reciprocity, and perceived fairness over time. In insurance, customers must share sensitive personal information and rely on service professionals to act competently and benevolently—often under stress, illness, or financial uncertainty. 

Consider a real-world example: 
A parent calls to understand whether a child’s emergency visit will be covered. The agent has access to accurate information, but delivers it rigidly, reading policy language verbatim. Technically correct. Emotionally absent. The customer leaves the interaction uncertain and anxious—despite receiving the “right” answer. 

Operational accuracy alone did not produce satisfaction. The exchange failed because the relational elements were missing. 

 

Relationship Marketing in Practice 

Relationship Marketing Principles further illuminate what’s required. Research on relationship marketing points to the importance of trust, coordination, and commitment in sustaining relationships (Morgan & Hunt, 1994), while my research examined how relational factors shape customer satisfaction within the health insurance experience (Phillips Husband, 2020). 

• Commitment shows up when customers are willing to stay engaged—calling back, providing documentation, following guidance—because they believe the relationship is worth sustaining. 

• Coordination requires clarity about mutual expectations. This means explicitly guiding customers through what they need to do and what the organization will handle on their behalf. 

• Trust—the cornerstone—rests on three pillars: 

  • Integrity: keeping promises made 

  • Benevolence: acting in the customer’s best interest 

  • Competence: having the capability to deliver 

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A real-life illustration: 
When a service professional says, “I will call you back tomorrow with an answer,” and actually does—after researching the issue—that single act often matters more than the outcome itself. Trust is reinforced through follow-through, not perfection. 

 

Communication Is the Experience 

In complex service environments, communication quality becomes the experience. Accuracy, clarity, credibility, and timeliness all shape perception. Poor communication doesn’t just confuse—it amplifies stress. And recovery from a communication failure in an insurance or  financial context is exponentially harder than in low-risk industries. Customers remember how information was conveyed long after they forget the details. 

 

Why Traditional Satisfaction Models Fall Short 

Customer satisfaction has evolved over nearly a century—from macroeconomic indicators to perception-based measures like SERVQUAL, to modern CRM and customer-centric models. Yet many frameworks still assume a product-oriented or transactional environment (Fornell et al., 1996; Parasuraman et al., 1988). 

Insurance is different. It operates in a service-only, high-emotion, high-consequence setting with few tangible markers of success. Satisfaction is not confirmed at the point of purchase, but over a series of interactions (Lemon & Verhoef, 2016)—often during moments of vulnerability and loss of control. Forcing this unique experience into a monolithic, product-based satisfaction model obscures what truly drives perception. 

 

The Implication for Leaders 

Improving customer experience in the insurance and financial settings does not start with more features or faster handle times. It starts with recognizing that customers are seeking relationships that reduce emotional burden, not just transactions that resolve tasks. 

This requires: 

• Training service professionals to navigate emotional context, not just policy knowledge 

• Organizational structures that enable continuity, ownership, and follow-through 

• Service strategies that honor the uniqueness of each customer’s situation 

Customer experience in real life is not measured solely by efficiency. It is measured by whether customers feel seen, guided, and protected in moments that matter most. 

And that is a leadership choice. 

 

References 

Blau, P. M. (1964). Exchange and power in social life. John Wiley & Sons. 

Fornell, C., Johnson, M. D., Anderson, E. W., Cha, J., & Bryant, B. E. (1996). The American Customer Satisfaction Index: Nature, purpose, and findings. Journal of Marketing, 60(4), 7–18. https://doi.org/10.1177/002224299606000403 

Phillips Husband, V. (2020). Antecedents to customer satisfaction for U.S. health insurance customers [Doctoral dissertation, Walden University]. Walden Dissertations and Doctoral Studies. https://scholarworks.waldenu.edu/dissertations/9224 

Lemon, K. N., & Verhoef, P. C. (2016). Understanding customer experience throughout the customer journey. Journal of Marketing, 80(6), 69–96. https://doi.org/10.1509/jm.15.0420 

Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1995). An integrative model of organizational trust. Academy of Management Review, 20(3), 709–734. https://doi.org/10.5465/AMR.1995.9508080335 

Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20–38. https://doi.org/10.1177/002224299405800302 

Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1988). SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality. Journal of Retailing, 64(1), 12–40. 

Wheatley, M. J. (2002). Turning to one another: Simple conversations to restore hope to the future. Berrett-Koehler Publishers. 

 
🎧 This essay is part of our quarterly conversation on Customer Experience in Real Life. Listen to the companion podcast episode.