Grow Your Business with a Strong Retention Strategy
Grow your Business with a Strong Retention Strategy
Retention is a critical aspect of maintaining your business. But most agents I know tend to focus their efforts on new business acquisition (leads, referrals, etc.), leaving existing clients to auto-renewals and reactive conversations. When your existing clients leave your agency, it is becoming increasingly difficult to maintain your agency growth. This behavior is often referred to as the leaky bucket.
We have compiled data from a set of agents to highlight the way agencies run today and provided insights on how you can improve your retention and stop your leak.
1. Improve Your Onboarding Process
The graph above shows the growth drivers within different insurance agencies. Most of the new policies sold across all insurance agencies come from net-new clients (blue portion of the histograms).
Improving your retention starts from the first impression for a new client. First impressions are powerful. They shape your customer’s view of you and your agency
Take some time to review your current onboarding process. Ask friends and family members to go through the process for honest feedback. Come up with ways to make your onboarding process as easy as possible.
2. Upsell and Cross-sell
Our research shows that the more policies a customer has with an agency the higher the retention. In fact, increasing average policies per customer to 1.8 (policies/client) reduces annual churn rates to 5% (95% retention).
Most agents I know try to sell an additional policy to their current policyholders. What they may not realize is that the value of the second policy is larger than the additional revenue from that policy, it keeps the client loyal.
Be proactive, leverage data to meet your customer’s needs and concerns, find different and better products that add value and offer adjacent policies (i.e. cross-sell) that would benefit the customer.
Start by finding the average number of policies per client in your book. This will give you a sense of the untapped value in your book of business.
3. Proactive Communication
Do not wait for your customer to reach out to you with requests, issues and claims.
Churn is at its highest rate one year after a customer purchases their first policy and decreases significantly after four years. Keep regular contact with your customers. Be proactive in your communication to build your customer relationships and increase loyalty.
When possible, reward renewals. Send something to acknowledge your customers when they renew with you. It lets them know that they are appreciated.
4. Use Technology
If you do not have it already, consider offering a do-it-yourself tool, such as a mobile app. Your customers will likely prefer the convenience, and it will save you time.
Data can also significantly improve your services. Analyze your data and find insights that allow you to anticipate your clients’ desires and make better-informed decisions.
Start working on the suggestions above to fill the holes in your bucket, and you’re on your way to increased retention and compounded growth.
Ido Deutsch is an entrepreneur, growth hacker and insurance enthusiast. He is currently the head of growth at Agentero, creating a smarter, more intuitive insurance ecosystem. Prior to Agentero, Ido founded three technology businesses, resulting in two acquisitions, and assisted several startups in achieving their growth goals through digital marketing and rapid experimentation.
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