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To: The BA 310 Course Team
From: Stacy Nguyen
Date: 06/28/2020
Re: Customer Service Champs: USAA’s Battle Plan
The core concept of the Customer Service Champs: USAA's Battle Plan case is to show
how the managers at USAA utilize different motivation tactics to create an effective
organization. USAA is a top-rated bank and financial services organization that was created in
San Antonio on June 20th, 1922. “USAA Company History” (2020) states that the company was
created when twenty-five Army officers came together to ensure each other's automobiles. The
United Services Automobile Association offers exclusive financial services such as insurance
and banking to those who have served or currently serve in the military through a specific period.
With 68.3 billion dollars in assets, USAA remains on the top of Bloomberg BusinessWeek's
annual Customer Service Champs ranking for four consecutive years. In addition to excellent
customer service, they specialize in online services with iPhone/Android mobile check deposits,
texts with banking account balances, filing a complete insurance claim on a phone, ie. In late
November of 2009, USAA expanded the eligibility requirements; allowing property and casualty
insurance to anyone who has ever served in the military, increasing its potential customer base
more than twice. This company has no plans to offer insurance to the general public and could
significantly harm its business and customers by doing so.
The key issue from this case that is relevant to the course goals is having students solve
management problems, including but not limited to change management, leadership, and
motivation. The critical issue in the case is the expansion of the customer base at USAA. The
rapid increase in a customer base can affect the company's ability to continue its excellent and
efficient customer service to a military customer while also assisting a broader set. A company
can easily get overwhelmed by the new set of customers, making it harder for customer service
to give the same high performance. Also, more customer input presents a greater insurance risk.
The representatives at USAA go through personal training including eating MREs at sessions,
trying on Kevlar vests and flak helmets, and receiving a bona fide deployment letter. Of course,
these scenarios do not mimic being in the military but give employees a glimpse of what their
customers have or had experienced. They are specially trained to deal with the issues that arise in
families, banking, and insurance, for those who have been deployed. When introducing a wider
variety of customers, especially those who are not in the military, it can result in agents being
unprepared to tackle claims or banking for regular customers. Besides, employees may start to
undergo feelings of underpayment equity. When comparing their outcome-input ratio to their
previous outcome-input ratio before expanding to a broader range of customers, one may see that
they are contributing in more inputs such as time and effort and receiving the same outcomesuch as pay- as the previous role. USAA will have to change and increase their motivation
tactics, intrinsically and extrinsically, for their employees to want to continue to work at USAA
while undergoing expansion.
There are multiple ways in which USAA can motivate its employees. To begin,
McGregor (2010) states that USAA grants employees’ generous bonuses of "nearing 19% of
their pay, up from 13.5% the year before" (p. 2). Bonuses "tend to have a more motivational
impact" (Jones & George, 2020) than a salary increase per se. The bonuses can be directly and
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exclusively based on employee’s performance. In addition to merit incentives, “USAA
Employee Benefits Review” (2019) indicates their employee benefits include paid time off,
health insurance, free gym membership, employee discount, tuition assistance, and retirement
contributions. Furthermore, USAA is able to fulfil multiple needs of employees which motivate
them to obtain the outcomes at work. Examples include physiological needs (an exceptional level
of pay for basic surviving and paying for childcare), safety needs (adequate health care benefits
such as health, dental, and vision insurance), belongingness needs (company social events
throughout the year such as a Christmas party), esteem needs (with generous bonuses), and selfactualization needs (USAA provides employees with 16 hours of volunteer time). The company
is well known for offering intrinsic motivation to its employees in the following ways: offering
an internal sense of content and happiness when helping a non-active/active military personnel as
their form of giving back or paying respects to what they have sacrificed and done for America,
especially when 23% of "USAA's top management and new hires have served in the military"
(McGregor 2010, p. 1), and USAA prides itself on customer service and not pushing customer
service representatives to go through calls and get things done quickly but rather a comfortable
pace for both parties that ensure customer satisfaction. The company offers potential sources of
prosocial motivation by having employees go through scenarios such as eating MREs, receiving
a bona fide, and trying on the gear in the military field where most of its customers are based.
This allows employees to gain a sense of empathy for the situation’s soldiers are in and be able
to behave accordingly to benefit or help them. In addition to utilizing intrinsic motivation, USAA
also offers extrinsic motivation. The company offers employees a generous package of hourly
pay, benefits, and bonuses to make them feel grateful and motivated. When the company closed
two call centers in 2009, "it offered every employee a company-paid relocation package to jobs
at other locations" (McGregor 2010, p.3). In addition, McGregor (2010, p.3) states that USAA
helped staffers “burdened with underwater mortgages unload their homes". These are excellent
materials that employees would want to acquire. Also, one might feel extrinsically motivated to
uphold the social reward of being a top-ranking company for customer satisfaction. Lastly, the
managers at USAA can boost levels of expectancy through outstanding customer service,
training of employees, as well as the advancement of technology within the company. As stated
before, clients of USAA are overly pleased with the customer services provided by the company;
this is partly since employees are put through training in which they go through certain scenarios
military personnel would go through to gain a deeper sense of empathy and understand
emotional/financial issues. Clients have also stated that the customer service agents are truly
dedicated to the caller during their call, as Staff Sergeant Corey Mason says, "it is not every day
I get addressed 'Sergeant' by a customer service agent" (McGregor 2019, p. 1). USAA is
continuing to take drastic steps in improving the technology used in financial services today. The
company was credited with being the first to allow photo-ready deposits. USAA has permitted
for the expectancy to be high by putting in place items such as bonus payouts, social rewards,
and great benefits. Therefore, employees understand the relationship between their effort and the
result of that level of performance.
An alternative solution to the problem of rapid expansion for USAA could be to expand
the customer base to those who have served and are currently serving but in a spaced-out time
manner. Those who are currently serving would be a top priority, and then the company can
work on those who have served in the military by a certain amount each day. Furthermore, the
company can also implement this process when and if they are expanding to the general
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audience. Seen in the goal-setting theory created by Ed Locke and Gary Latham, they suggest
that "to stimulate high motivation and performance, goals must be specific and difficult". (Jones
& George, 2020, p. 387). Usually, these goals will be quantitative. The company can put a goal
to have thirty new members who have served or the general population to sign up for an account
daily. This would motivate employees to contribute more inputs to their jobs to achieve this goal
daily. It will also cause employees to become more persistent when faced with adversity in other
scenarios.
After careful analysis of the proposed alternative defined in section above, the company
would have to take into account that the specific goals would have to be worked and planned out
accordingly and very carefully by management, employees, i.e. They must be cautious with the
goals because they can harm the company as well. Employees may start to decline in customer
service quality in order for them to focus and achieve the specific challenging goal of reaching
how many extra customers daily. Also, USAA would have to implement more motivational
tactics, such as extrinsic rewards. Employees during the expansion may feel as if they are
undergoing underpayment equity if there are no changes. They are still receiving the same pay or
benefits when tending to a smaller group of active military versus when they are working with a
larger group of active military, inactive military, and general people. Employees who are
undergoing underpayment equity may be motivated to put in less effort and inputs toward their
job as they see no benefit in doing so. Therefore, USAA has to restore equity in terms of pay
raises, added benefits, rewards, i.e.
USAA Company Overview | USAA. (n.d.). USAA. Retrieved June 24, 2020, from
https://www.usaa.com/inet/wc/about_usaa_corporate_overview_history
USAA Employee Benefits Review : Why USAA Could Be a Great Employment Option. (n.d.).
(2019, August 18). FutureFuel.Io
https://futurefuel.io/employee-benefits/usaacareers/#:%7E:text=USAA%20matches%20100%25%20of%20employee,to%208%25%
20of%20their%20salary.&text=Standard%20health%20insurance%20package%20that,de
ntal%2C%20and%20vision%20for%20employees.&text=Included%20with%20health%2
0insurance%20to%20cover%20for%20any%20dental%20needs.&text=USAA%20has%2
0many%20company%20social,year%20for%20employees%20to%20enjoy.
Jones, G. and George, J. (2020). Contemporary Management. New York: McGraw-Hill/Irwin.
McGregor, J. (2010, March 1). USAA’s Battle Plan. Bloomberg BusinessWeek.
https://www.bloomberg.com/news/articles/2010-02-18/usaas-battle-plan