Bill Gates once said, "Your most unhappy customers are your greatest source of learning." If that's true, then insurer Insuretech Unicorn Hippo is in for quite an education, recently being schooled in the hard lesson of poor customer service.
After raising an impressive $150 million in funding early this past summer - placing its valuation at $1.5 billion - Hippo's customer service quality plummeted. While the latest round of funding was aimed at helping the company expand and acquire other companies in pursuit of its lofty goal of 95 percent market penetration by 2020, along the way Hippo veered off track. Customer satisfaction plummeted. It got so bad that Hippo CEO and Co-Founder Assaf Wand issued an apology letter to customers, hat in hand.
"I want to take this opportunity to simply apologize," Assaf wrote. "Since we started this company five years ago, we vowed to put you at the forefront of everything we do and lately, we've fallen short."
The solution to Hippo's customer service problem? Hiring more customer service staff, updating the phone system, and adding new technology, according to Wand's letter.
"If we're not meeting your standards, you can always email me directly," Wand offered.
The company has experienced rapid growth and expansion. While it is difficult to say whether Hippo's expansion was too fast for its own good, and what impact that played on customer service is hard to quantify.
Hippo's sales grew 60 percent year-over-year in the second quarter of 2020, an artificial boost from the effects of the coronavirus pandemic. More people have been staying home.
From 2019-2020, the value of the company's premiums grew to $270 million.
Internal problems don't end with customer service. Customer reviews are mixed, and the company still has not been rated by reputable organizations such as J.D. Power, according to a review of Hippo at TheZebra.com.
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