Is it your insurance agency’s goal to grow your business (and in turn, make more money)? If you’re like 99% of agents out there, you’re nodding yes.
If you’re nodding along, I have some news for you: You don’t have to find brand new customers as the only means to reach your goal. Yes, investing in marketing and using high-quality leads are proven growth strategies, but there’s another you may be overlooking: your strategy on customer retention in the insurance industry.
In my experience, there are two parts to a good customer retention strategy: things you must be doing no matter what, and things you should be doing if you’re striving toward becoming a top-tier agent. In this article, I’ll explain both.
Customer Retention In The Insurance Industry: Must-dos & Should-dos
7 Things You Must Be Doing To Retain Customers—No Matter What
Offer a solid product.
This almost goes without saying, but it’s still absolutely crucial. It all starts with the products you offer. They must be helpful to your customers, otherwise, there’s little hope of retaining customers in the long term.
Understand who your customers are and what drives them.
You can’t think about retention until you know what’s important to your prospects and customers. Customer segmentation is the practice of categorizing customers according to common characteristics—e.g. price-sensitive customers, service-sensitive customers, etc. This is the bedrock of your agency: Your sales and marketing strategies will be built around your customers’ needs and expectations.
Understand where your referrals come from.
Referrals are an important part of customer retention because if a customer comes to your agency through through a referral, they have a much higher likelihood of staying with your agency long-term. This is also true for customers who refer others to you. Capitalize on this longevity by setting up a referral program that’s going to benefit your customers in the long run. (This will also benefit your business, of course.) This program could be as simple as giving referrers a gift card or a percentage off their premiums. The most important thing about a referral program is that it should be “in the faces” of customers, so they know how they will benefit from providing referrals. Every communication your agency sends needs to highlight friend and family referrals, so it is always top-of-mind.
Be an expert communicator.
Stay in front of customers at all times to develop relationships with them. The most important aspect of communication with both customers and prospects is to have a cadence of regular communication through various methods of outreach: via phone, email, mail, text, etc.
In that same vein, one of the biggest mistakes an agent can make in regard to communication is to sign on new customers without having an explicit process in place for contacting them. When this happens, you have no idea whether that customer is happy, dissatisfied, or on the verge of churning. It also gives other agents an opportunity to get in front your customers, and you risk losing their business. Other recommended methods of communication include:
- Have annual or semi-annual meet-and-greets—this allows and even incentivizes people in the community to stop by your agency in person.
- Survey customers about your agency’s services and products. There are a number of free survey tools available online, or it can be as simple as having your producers ask customers a few questions over the phone. This will help you address shortcomings and learn more about your customers, including how they feel about your pricing, products, and overall customer service.
Focus on multi-lining customers signed into multiple products.
People who have only one product offering from your agency are more likely to cancel than those who have multiple products. The more products you can get them signed onto, the more likely they are to stay with you. Have your producers dedicate a specific time block each week to focus on upsell opportunities. This way your agency’s offerings become much more “sticky,” helping increase your overall retention.
Reduce lapsing cancellations by providing an autopay option.
When customers forget to pay bills, their services/contracts are immediately cancelled—it’s a common cause of customer loss. Setting up an automatic payment option can help reducing lapsing. Consider offering discounts to encourage customers to sign up for autopay.
Set expectations when onboarding customers.
From the day a customer signs up, explain the benefits of sticking with you for the long-term. For example, set the expectation during on-boarding that customers will be incentivized when renewal time comes—such as a reduction of their deductibles after the first year. This way you’re greatly improving your chances that a customer will remain loyal, and potentially heading off rate shopping when that policy comes up for renewal. Another thing to mention when on-boarding customers is to share that, when it comes to claims, a more tenured customer may have an easier time through the claims process because they have a longer track record.
5 Things You Should Be Doing That Will Help You Stand Out
Whether you’re a captive or an independent agent, the ability to provide special services can set your agency apart. (Tweet this!) Here are some things that will help boost your service offerings within your community.
Personalize your services and products.
As new customers partner with you, share with them what you can offer that your online, price-based competitors won’t or can’t provide. These are the intangibles. They include things like regular, annual coverage reviews, and being able to speak to the same people they already know (and are comfortable with) instead of dialing a corporate 800 number and waiting 10 minutes to get a randomly assigned customer service rep.
What To Say
“We’ll sit down with you and review your coverage to ensure you have the best package that fits your needs at this point in your life.” This shows the personal side of your service, and ensures your customers they won’t be forgotten once you’ve won their business.
Compare and shop rates for your price-sensitive customers.
Most agencies simply hand over a product option with X demographics and X risk—and ask customers to sign on the dotted line. However, it makes a world of difference to price-sensitive customers when you show how you landed on that specific product.
What To Say
A line as simple as “We’ve compared a bunch of different providers, and here’s where we got to this; if you’re concerned about paying more, we’ll help you look at what’s in the local area and do a pricing comparison.”
Be proactive about changing premiums.
Share any anticipated premium changes as a part of the expectation-setting process when a customer signs a contract.
What To Say
“As part of our service, we will let you know ahead of time if your premiums are going to change. We’ll also talk with you about whether this will work for you, or if you’ll begin to shop for a different product—because we’ll help you through that shopping process.”
Provide rewards for renewals.
Know that retention means renewals, and reward it. For example, each time a customer renews their contract, send them a card with a personalized message, or invite longtime clients to a customer appreciation dinner, etc.—whatever fits their personalities. This goes back to customer segmentation: If you know what your customers’ interests are, you can tailor your approach to show them you take the time to get to know them and that you truly value their business.
Gift anniversary presents.
Every year, send something to customers who are still with you. Gifts don’t have to be big, but they should show appreciation and help you stay in front of your customers. However it must be pointed out here that States have different laws regarding giving gifts of value to insurance customers. Some States prohibit it altogether, while others set limits on the amount that an agent or insurance company can gift a client (generally in the $5-50 range per consumer, per year, some States have limits as high as $200).
Show your dedication to customers with these proven customer retention strategies and you’ll be a standout in the insurance industry. See which ones you can implement at your agency today.