Article

Roi Agababa
Roi Agababa 23 June 2017

The 3 Resourceful Ways to Hold on to Your Clients and Boost Profitability

Most companies know it’s easier to sell to an existing customer than it is to find a new one. With an existing customer, all the initial marketing and acquisition cost has been paid for. The customer already trusts the brand so future sales are all but guaranteed. Sadly, most insurance agencies fail to capitalize on this simple truth.

They pay more than what they need to for acquisition and then keep paying those costs to run their business. Each sale is seen as a unique problem that, once solved, needs to be solved again and again.

That never-ending problem costs 5 times more than keeping existing business. And, the average agency’s book turns over every 7 to 10 years. Average retention is 85%, which is embarrassingly low, but is also the accepted norm.

Even at 85%, most consumers, when polled, are dissatisfied with their current insurance agency.

They stay because they’re too lazy to leave, they know most other brokerage firms and agencies are the same, and it’s a hassle to leave and find a new insurance agent — not exactly the definition of a satisfied client.

But, there are some brokers and agencies who are transforming the market using these three simple and resourceful strategies:

 

1.They’re Improving the Customer Experience

Most agents are passive because policyholder-agent contact is primarily initiated by the customer. When there’s a problem with their policy or they need to file a claim, the policyholder calls in. However, agents aren’t actively emailing or calling policyholders to tell them that an endorsement may no longer be needed, or a policy premium hike is imminent, or that they can save some money by taking a defensive driving class.

But beyond “shop talk,” agents need to make customers feel good about their relationship with the agency. Startups, like Lemonade, push the concept of mutuality to the limit by combining an insurance company with its agency (effectively eliminating the traditional agency distribution model). It’s a company whose mission it is to simplify the process of buying insurance and give excess premium dollars (not needed for claims) back to the policyholder’s local community.

They also bind coverage quickly using advanced automation with a minimal salesforce. The result is that they have fundamentally changed the way their target market views insurance and the insurance industry.

It’s a tough sales pitch to beat.

However, not all agencies need to go the way of startups like Lemonade.

The idea is to change the way your customers view your agency and the insurance industry as a whole.

An agency willing to reach out to its customers and clients monthly, weekly, or even daily can establish a connection with their policyholders that most agents and agencies just don’t have. Frequent contact doesn’t have to be sales oriented, either. In fact, fewer sales pitches build trust. Consumers will understand that the agency isn’t in it “just for the money.”

That being said, communicating with customers about relevant products/policies that can be of actual value to them can also help to build trust. Agents and brokers should be able to know which customers to call (and when!) and what exactly to discuss with each one. They can do so by using an agency management platform that provides actionable data and insights regarding each customer. With this, agents can predict customer needs before they even know they have them. This type of personalized, tailored customer service can set agents/brokers apart from the rest and establish true loyalty.

According to at least one survey, 57% of policyholders want to hear from their insurer or agent at least semi-annually. If more of this communication consists of real value, as opposed to canned sales pitches or brochures, consumers may not mind hearing from their insurance agent more frequently.

 

2.They’re Optimizing the Claims Process

Claims should be processed quickly. Some companies are able to start the process in just a few minutes. The faster the processing, the happier the client.

For example, Universal Property and Casualty moved from a lengthy claims-handling process which took weeks, sometimes months, to allowing their insurance adjusters to write checks out in the field on first visit. The result was a dramatic reduction in lawsuits, arbitration, and related costs and an increase in customer satisfaction.

Not only did the company save money, they built goodwill toward their policyholders.

Other agencies are being more proactive with claims handling. For example, they may call a plumber or other local tradesman on behalf of the policyholder if a water claim is filed. By preempting the policyholder, the company saves their client time and demonstrates that they care about their wellbeing.

Agencies can also work with an insurance agency management platform that enables them to offer a self-service online portal for customers to upload and track their claims documents themselves, quickly and easily. This makes the entire claims process much more streamlined and efficient.

 

3.They’re Leveraging Historical Data to Pay Attention to Behavioral Patterns

Smart insurance agencies and companies are realizing the benefit of tracking consumer behavior to predict policyholder needs and wants. These needs often arise when a policyholder goes through a major life change.

For example, when a policyholder moves, their need for insurance may increase.

By tracking these changes, agents can be proactive in helping their clients. They’re then seen as trusted advisors and consultants instead of salespeople. The focus is shifted away from sales and toward helping clients by offering sensible solutions to their current situations.

This also creates dependency on the insurance agent for all future insurance needs.

Another way agencies and brokers can help their policyholders is by paying attention to seasonal trends. If the agency insures motorcyclists, spring, summer, and fall will be the riding seasons. Riders typically don’t need coverage during the winter, especially in northern climates.

Leveraging the company’s existing client database, agencies can initiate smart suggestions for policyholders (instead of waiting for them to initiate contact) and save them money by finding out when policyholders want to take their bike off the road for the season.

At the end of the day, insurance is a commodity product. Agents and brokers must be creative and proactive to stand out from the crowd and build loyalty. Often, this means breaking with tradition and industry norms to find new strategies to demonstrate your uniqueness and added value to customers.

 

 

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