Managing Growth at a Pet-Insurance Business

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Back during our days at Wharton, Chris had met Vernon W. Hill II, founder and retired chairman and CEO of Commerce Bancorp. Hill is known for having put the retail in retail banking, building his company to an $8.5 billion market cap from an original investment of $1.5 million in 1973. He is famous for reinventing retail banking in the same way we wanted to reinvent pet insurance in the U.S., so we approached him for help.

Our first meeting took place in January 2008, with Chris still on crutches. Four months later, Chris was finally off his crutches—and Hill was now Petplan's chairman of the board.

From the outset, we quickly learned that Hill is not one to procrastinate, and his get-it-done mantra meant the pace of our decision-making increased significantly. We learned to seize the moment. When we were presented with the opportunity for a partnership with a major pet products company, we got on a plane and flew halfway across the country to meet with the execs face-to-face—securing the deal. Prior to Hill's involvement, we would not have moved nearly as fast. In retrospect, that may have lost us a few deals along the way.

Taking Care of the Base

With Hill's guidance, we spent more time looking at the business as a whole and got back to discussing and formulating strategy. It was during one of Chris' many hospital stays that we discussed automating document processing. The office was coping remarkably well but only because our team was staying late and working weekends. It was taking three people a day to complete the printing of all of the documents and to mail them out. By automating administrative tasks, we could focus on taking better care of our rapidly growing customer base. When we finally introduced electronic documents three months later, we saw huge cost savings of over 90%. It also enabled us to reallocate resources to customer service, which was an area we had neglected.

Additionally, we began to review customer feedback more carefully. Hill showed us that there was still room for improvement in terms of customer service. We had focused our business almost exclusively on building an unmatched product but what we really hadn't accounted for was servicing our customers once we secured them.

As we looked at some of the comments we received from policyholders, we realized that all of our efforts had been focused on sales and claims but little or no thought had been put into the day-to-day experience of existing clients. One immediate change was that we extended our hours to cover West Coast business days fully. This small change resulted in an even bigger increase in sales—over 30% in a single month after implementation—and it practically eliminated complaints regarding our opening hours.

We also received plenty of feedback regarding the length of our claim form from both clients and veterinarians alike. Upon close review, it became apparent that we could scale our claim form down from three pages to one. This was another small change that had a huge impact. From the client's point of view, completing and submitting a claim was a much simpler process. From an operational standpoint, it reduced the average time it took to assess a claim by 70%.

Six months after his accident, Chris and I returned to the office full time. Since then we have continued to see double digit growth each month. Though there are times where we still answer the phones and get immersed in "doing the doing," we have learned that building a strong team and relying on it to handle the daily machinations is the best way forward. Doing so allowsus to continue to build the engine that drives our growth.

We have always known that accidents happen. What we have learned since Chris' accident is that it's how you deal with them that really matters. One of Hill's favorite expressions is, "you got paid for yesterday." The accident made us focus on tomorrow.

Edited by Stacy Perman

More essays are available in our ongoing series.

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