State Farm® Payment Plan Marks 50 Years
In 1948, Ed Schadler became a State Farm agent in Edgewood, Ky. Back then, customers paid their insurance premiums in full.
"Fifteen years later, the Company came out with MPP – the Monthly Payment Plan," said Schadler, who is still in business 65 years later. "We thought this was a big deal, and it was at that time."
Customers liked the new option, which gave them flexibility.
"It helped as premiums continued to climb," Schadler said.
Even though it was a huge step-up in service, it still took an average of 30 days to receive a response to a handwritten request mailed to another department.
Today, Schadler and his staff add or remove policies, request a re-bill, and perform other updates instantaneously. Advances in technology allow customers to choose paper or electronic billing or elect to have premiums deducted automatically from their bank accounts.
"It's nice for today's lifestyle and pace," Schadler said.
And State Farm Payment Plan (SFPP) is an even larger part of the agency's day-to-day servicing. The SFPP monthly payment option remains is a popular alternative for many policyholders, he said.
"And the focus continues: Growing State Farm and meeting competitive demands thru Remarkable Customer Experiences is what matters."
Employees Like it, Too
Employees say the improvements have made their jobs more efficient as well.
Not all that long ago, a review of a policyholder's payment history meant requesting overnight delivery of a master tape record, according to Supervisor Mary Long of Jacksonville, Fla.
Today, such routine inquiries are completed during the initial contact. The difference in customer response time is like night and day, according to Long.
"This is such an exciting milestone for us to be part of," Long said, referring to the SFPP anniversary. "I have had the opportunity of working in SFPP for the past 25 years. Our folks are wonderful."
Craig Fowler, the new Agency Vice President – Customer Care Center Service, said the department is instrumental to Company goals.
"Our competition and our customers' demands have been changing and accelerating …SFPP allows the Company to deliver on those demands and expectations by providing options like electronic signatures for SFPP documents, recurring monthly payment with a credit or debit card, and online SFPP customer self-service," Fowler said. "Over the years, we've become more efficient, more effective, and have positioned SFPP as an instrument of sales and retention for agents."
Priscilla Escobar, VPO – CCC Service, shared that, as a former agent, she understands the demands on agents and their team members to meet customer expectations.
"When an agent calls on behalf of a customer, SFPP associates truly understand the agent/customer relationship and work diligently to resolve each customer's inquiry to conclusion."
Escobar recalls a conversation she had with an account specialist in Murfreesboro, Tenn. The account specialist shared that each time she reviews an account and speaks to a customer, she thinks of that customer as her mom.
A Brief History
These days, paying insurance in installments – monthly or quarterly – is the norm rather than the exception.
Back in 1963, however, the practice of living on credit was still relatively new. The economy was becoming increasingly credit-oriented, and families needed insurance to protect their growing homes and possessions.
Enter the Monthly Payment Plan (MPP). Designed as a sales tool, MPP was the Company's response to the need for a budget pay plan to meet policyholders' needs and competitors' offerings.
- On April 1, 1963, the Monthly Payment Plan (MPP) department started in the Illinois Regional Office.
- By 1967, MPP had grown to 100,000 accounts in 19 regions.
- In 1994, MPP was renamed the State Farm Payment Plan (SFPP).
- Consolidation from 26 U.S. regional offices to four sites took place between 2005 and 2006.
Today, SFPP services more than 17.4 million accounts and 40 million policies (50.9 percent of all policies in force) in the U.S. and Canada.
Research shows that having one or more policies on SFPP significantly improves retention, and the degree of improvement grows the longer a household is with us.
SFPP turned 50 in April, a golden celebration for a department that has been through many changes since its inception on April 1, 1963.