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Dane Shelford

Written by Dane Shelford

How to Increase Customer Retention in the Insurance Industry

 

The best way to grow your insurance brokerage is to nurture the customers you already have. With the right strategies for customer retention in insurance, you can reduce churn way below industry averages and maintain a highly successful brokerage with less effort.

 

The fact is, it requires significantly more time and money to generate and convert leads than it does to maintain the client base you and your brokers have already worked so hard to acquire.

 

Research shows that it can cost five times more to win over a new customer than it takes to satisfy and retain a current one. To really excel and secure your position as a top rated insurance brokerage, it’s not just about holding on to your customers. It’s about creating a genuine, positive relationship with each and every one of them.

 

According to a recent report on customer experience, those who become your loyal customers are five times as likely to repurchase, four times as likely to refer, and seven times as likely to try a new offering.

 

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In the insurance industry, customer retention is even more paramount than in other industries as long-term success depends upon policy renewals and sustainable relationships. Also, creating those loyal relationships is what is going to bring your brokerage more referrals. Looking at it this way, your customer retention strategies are also an important part of your sales strategy.

 

 

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Here are the powerful methods that you can consider implementing at your brokerage to keep your customers happy, renewing and sharing their appreciation for your services with everyone they know.

 

Laser Focus Your Customer Contacts

 

You already know your insurance customers’ needs will always evolve over time as they reach different life stages. This means they will naturally have questions or issues that your brokerage could help them solve at different points. Capitalise on this and the contacts your brokers make won’t come off as overbearing, but rather, as helpful. The better you tailor your messaging for them, the more contacts you can make throughout the year that are viewed as welcome by your customers.

 

As you improve your nurturing processes, ask with each email, phone call or other contact, ‘why?’ Every message should have a purpose for the recipient. For example, your monthly emails about the value of life insurance aren’t going to resonate with your young, single customers who don’t have any dependents.

 

Those that are in their 30s or 40s on the other hand, may appreciate regular offers to top off their life insurance policy as they grow their family.

 

With marketing software like Graphly or Hubspot, you can keep track of your customers, where they are on the customer journey, and what insurance products would serve their needs currently – as well as two, five and ten years in the future.

 

 

Vary Your Mode of Communication

 

It is also important to vary the way you communicate with your customers. Include in your brokerage’s marketing processes a plan of action to ensure you’re utilising a variety of contact methods:

 

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Emails;

Phone calls;

Webinars;

Holiday and birthday cards;

Handwritten letters;

Surveys;

Social media posts; and

Text messages.

Image Source: Linkedin.com

 

This will improve your customer retention for two reasons. First, you are less likely to end up in your customers’ spam folders, or your mailings in the paper shredder, if you don’t over-use one channel. Second, some people prefer to interact over a particular medium. By leveraging the channels that are available to you, you’re more likely to appeal to more people.

 

For example, the personal touch of a voicemail may be enough to get a call back or at least to leave a positive impression in one client’s mind, while others would ignore a phone call, but open and read a paper mailing or email.

 

 

Be Human

 

People prefer to do business with other humans – not robotic businesses. It’s an authentic, empathetic, conversational style that will appeal to your customers the most. As marketing expert Paul Jarvis points out, not letting your personal touch come out is a big mistake when it comes to nurturing your customer relationships. “The biggest email marketing mistake I see people are guilty of is not letting their own personality shine through. Just because you’re selling something doesn’t mean it needs to sound like Marketing-Bot-O-Tron-3000."

 

When your customer knows there is another human being on the other end, they’re going to feel more comfortable trusting your brokerage.

 

 

Prioritise Cross Selling

 

How much does your brokerage focus on cross selling?

 

A mailing once or twice a year to entice your customers to use your insurance brokerage for their homeowner’s policy probably isn’t bringing in a lot of business from your existing customers, is it?

 

What will work is offering your customer something of value in return for their loyalty, such as a huge discount on their current policy for purchasing a new type of insurance or a lower price for an introductory period. This type of strategy may reduce your profit margin in the short term, but cross selling is one of the most powerful ways to reduce your churn rate.

 

One study in the financial industry found that customers with one product stay for 18 months on average. Those with three products – the relationships lasts, on average, 6.8 years. The more invested a customer is in your brokerage, the more likely they are to stick around.

 

 

Make Your Brokerage’s Social Media Accounts Come Alive

 

One of the ways that mega-successful insurance agency owner, Grant Botma builds relationships is through social media. If you haven’t realised this already, your Facebook account is way more than a big online advert for your services. It’s an invaluable piece of ‘relational technology’.

 

Your insurance brokerage’s social accounts should be a place where customers – as well as your online prospects – can actually interact with you. It’s 2017. People today (and not just millennials, a recent Nielsen study found that generation X’ers spend more time per week on social media than their younger counterparts) use social media to get to know other people as well as the brands they’re interested in.

 

This means it’s important to determine the exact tone and personality you want to project on your Twitter, Facebook, and LinkedIn accounts. Having one designated individual in your brokerage not only create posts, but also respond to customer questions and comments, can be a great way to make your social pages feel human – and trustworthy. Gain your customers’ trust, and you’ll earn their loyalty and long-term business.

 

 

Banking and insurance company, Suncorp, is good at this. They post regularly about useful advice, promotions, and helpful insights for their customers, which is step one to customer relationship building on social media. More importantly, they respond to social comments. This simple action allows anyone who views Suncorp’s Facebook page to see there is a human on the other end!

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Image Source: Facebook.com

 

 

Here’s another example of creating a genuine connection through an insurance social media account. Instead of just posting about insurance products, Insurance Brokers Australia adds a very human touch by posting information on important weather advisories that would be helpful to those in the area. This is perfectly in line with the risk-adverse nature of the industry, but also casts the impression that the brand has their followers’ best interests in mind.

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Commit to Annual Coverage Reviews

 

To retain customers in insurance, annual reviews are essential. If your brokerage doesn’t already have an established process for coverage reviews, it’s time to sit around the campfire with your team and map out a productive strategy.

 

  • Which customers should you contact for reviews – your best ones? Everyone?

    a
  • Do you have email templates or phone call scripts for your brokers to use to contact customers about having an annual coverage review?

    a
  • What about periodic posts on your brokerage’s social media accounts to educate about the benefits of a review so clients will be more likely to accept one?

 

Even if customers decline the offer, you’ve still taken an important step to nurture the relationship. They’re going to feel like their business matters to you, rather than simply being another forgotten client.

 

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Image Source: Bain.com

 

Step into their shoes; if a client feels neglected, if their impression is that they never hear from their insurance agent after signing a policy, they’re more likely to shop around in the future. If they come across a great offer from another insurance sales agent, they’re more likely to switch. Reaching out for a periodic review, your brokers appear professional and conscientious and it is more worthwhile for the customer to stay with your brokerage.

 

 

Review Insurance Discounts

 

One easy way to lose a client – for life – is for them to realise they are entitled to discounts on their policy but are not receiving them. Part of your annual coverage review process should include questions to find out if a client is eligible for insurance policy discounts.

 

 

Teach Your Customers Why Your Services Are Beneficial to Them

 

If your brokerage doesn’t take the time to ensure your existing clients understand the value and benefits of their policy with you – why would they stay with your brokerage when they see an ad for a cheaper rate? Without this knowledge, a customer is going to view the brokerage that offers the lowest rates as the best option for them.

 

Every proactive step you take to educate on the advantages of being your client, whether you are offering them helpful insurance tips and advice through your content marketing, taking the time to check in and see if they have any questions, or simply connecting on a personal level, fortifies the customer relationship. Each is an opportunity to help them understand why becoming your client was a smart choice.

 

 

Communicate About Pricing Changes

 

A multiline insurer in the U.S., Farmers, faced a huge customer retention problem; they were losing 25% of their customers every year! When they evaluated what they were doing wrong, they discovered one of the major reasons for defection was a lack of communication around renewal pricing.

 

If you want to reduce churn, consider setting up a process for your brokers to reach out to customers and let them know when a premium increase is coming. This honest, upfront approach will help to promote customer loyalty – you can also use this contact as a time to review for any discounts they may be eligible for.

 

 

Reward Your Loyal Insurance Customers

 

One of the best ways to retain customers is to reward them. We all love the feeling of getting something in return for what we have invested. Take the time to evaluate what rewards processes make sense for your brokerage.

 

What type of rewards will you offer – such as a unique benefit for being a long-time customer or a gift card for policy renewals or cross sells. A small token of appreciation can make a big impact; customers are less likely to leave if they feel they’ll also lose the rewards they enjoy from continuing to be your loyal customer.

 

 

Committing to Customer Retention in Your Insurance Brokerage

 

In order to make these strategies work for you – and to see a measurable improvement to your customer retention rates – it’s important to determine which are right for your brokerage and then to create formal processes for your brokers to follow. If you do this, you’re going to reduce churn, increase profits, and take the business potential of your brokerage that much further.

 

 

Want to learn more about ways to strengthen your brokerage’s online appeal to your current and future customers? Download our free guide, “Website Enhancement for Serious Lead Generation.”

 

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