14 Customer Retention Strategies In The Insurance Industry

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.

IIf you’re nodding along, I have some news for you: You don’t have to find brand new customers as the only means to grow your business! Yes, investing in marketing and using high-converting leads are tried and true growth strategies, but there’s another strategy you may be overlooking: your approach to customer retention in the insurance industry.

In my experience, a good customer retention strategy has two pieces: things you must be doing no matter what, and things you should be doing if you’re striving to become a top-tier agent. In this article, I’ll explain both.

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Customer Retention In The Insurance Industry: Must-dos & Should-dos

9 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 critical. It all starts with the products you offer. They are the foundation to a strong insurance agency business and 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 start wrapping your head around customer 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 should be built around your customers’ needs and expectations.
Understand where your referrals come from.
Referrals are an important aspect of customer retention because if a customer comes to your agency through a referral, they generally 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. However it’s important to make sure you abide by all your State’s laws regarding providing cash rewards in exchange for referrals. Some States prohibit paying for referrals, while some others place a limit on how much you can give. 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 and they can easily submit referrals to you. Every communication your agency sends needs to highlight friend and family referrals, so these are always top-of-mind.
Be an expert communicator.
SStay in front of your 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 a range of outreach methods: via phone, email, mail, text, etc.

In that same vein, when it comes to communication, one of the biggest mistakes an agent can make 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 of your customers, and you risk losing their business. Other methods of communication I’d recommend 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.
Schedule regular checkpoints with your customers.
Agents and producers are continually busy, but you shouldn’t be too busy to show that service doesn’t stop once you’ve closed a deal. Set up a schedule for checkpoints with your customers; regular interaction (think something along the lines of every six to eight weeks) is a sustainable way to make sure you stay top of mind with them. This type of engagement places a spotlight on you amongst competitors if your customers do decide to start “shopping around.” Just knowing your agency is full of people who care about them automatically puts you ahead.

Insurance is fast-paced, and it’s easy to get burned out if you’re constantly running in every direction to work leads, stay in touch, find new avenues for business, etc. If you have a regular cadence down for contacting your prospects and customers, providing a personalized touch is much easier. You know exactly which steps to take and when to take them, which means you can build extra “touches” into your systems.

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Focus on multi-lining customers with 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 to add to their insurance mix, 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 an all too common cause of customer loss. Setting up an automatic payment option can help reduce accounts lapsing. If possible, consider offering discounts to encourage customers to sign up for autopay.
Set expectations when onboarding customers.
From the first day a customer signs up, explain the benefits of sticking with you for the long-term. For example, set the expectation during onboarding that customers will be incentivized when renewal time comes—such as a $100 discount in their premium after the first year, and perhaps a larger reward every year after. 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. Obviously the ability to offer this will depend on your specific carrier appointments, but if it’s possible to offer this type of renewal discount, I’d highly recommend it. Another thing to mention when onboarding 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 truly set your agency apart. Here are some things that can really 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 often 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 periodically 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

Something 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 guide 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 to a baseball game, give them a restaurant gift card, bring them in for 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 provide incentives for the things they like.
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.

In Conclusion

Show your dedication to customers with these proven customer retention strategies and I guarantee you’ll really standout amongst the sea of other agents in the insurance industry. Which ones will you implement at your agency today?