The Benefits of Retention for Health & Life Insurance Agencies

You know how important client retention is. You’ve heard all the stats: “the success rate of selling to a customer you already have is 60-70% vs. 5-20% for a new customer” and “increasing retention rates by 5% increases profits by up to 95%.” 

It’s proven that retention is more cost effective than bringing on a new client, but only 18% of companies heavily focus on it.

You might think you’re encouraging retention, but how are you rewarding your agents who are actively pursuing and boosting their client retention rate? Do you have a retention incentive or incentives program in your agency?

What is a Retention Bonus?

Investopedia defines a retention bonus as: “a targeted payment or reward outside of an employee's regular salary that is offered as an incentive to keep a key employee.” 

For this blog, we’ll take that definition one step further and define it as: “A retention bonus is a targeted payment or reward outside of an employee's (agent/producer) regular salary that is offered as an incentive to keep a key employee who actively pursues and builds their own client retention rate.”

We’ll discuss how you can start a retention incentive program at your agency and which tools will give your agents the best advantage to earn the retention incentive.

Setting Up a Retention Incentive Program In Your Agency

Northstar Meetings Group outlines these 10 steps to setting up an incentive program in your agency:

  1. Clearly articulate what problem you wish to improve through using an incentive program. 
  2. State the specific improvement desired from using a planned incentive program.
  3. Identify the specific employees being targeted by this incentive program.
  4. Define the desired performance in actionable terms so the performance can easily be measured.
  5. Empower employees to have control over the desired performance outcomes.
  6. Ensure you're using the right metrics to measure the correct behavior or desired action.
  7. Determine an appropriate incentive that can be applied fairly to all targeted employees.
  8. Examine the criteria and processes of the incentive program carefully.
  9. Consider the best way to communicate incentives earned and the distribution of incentives to employees.
  10. Maximize the value of your incentive programs by making results visible to everyone.

Another important step Entrepreneur points out is to “align the system with company objectives”. Every program can be similarly run, but you can make it your own by aligning it with your objectives, keep it consistent with your brand, and coordinate it with your agency’s goals.

Creating Your Incentives

To inspire your team to pursue a higher client retention rate, here are some things your agency can do:

  • Offer monetary/gift rewards
  • Post a success board
  • Hold an awards ceremony

Let’s go through each one.

Offer Monetary/Gift Rewards

Money is one of the simplest ways to encourage people to do something. Providing the opportunity for a bonus could be a definite motivator for your agents. A fun way to do this is stair-stepping the award like:

  • $500 bonus for 95% retention
  • $1,000 for 96%
  • $2,000 for 97%
  • $3,000 for 98%
  • $4,000 for 99%
  • $5,000 for 100%

This is just an example. You could start at $50 and work your way to $500, or start at 90% instead of 95%. You could do this quarterly, every 6 months, or yearly—just ensure you have an accurate way to track your agents’ success. 

If your agency is not able to offer a monetary reward to your agents who qualify for your incentive program, other options you could consider are:

  • Company swag (branded mugs, polos, and other gifts)
  • A rotating trophy 
  • Extra PTO days
  • Sponsored lunch of choice

The incentive should embrace  your company’s culture, it doesn’t have to be extravagant. Your employees may get really into it even for a rotating trophy. I remember a friend working at John Deere that won a trophy for some incentive program and she displayed it proudly on her desk. 

It can be simple. It can be fun. 

Finding what works best may take some time, but this could prove to be a powerful employee retention booster if used correctly.

Post a Success Board

This is similar to an “employee of the month”, but it’s a chance for everyone to celebrate those individuals who went above and beyond. 

The success board can come in a variety of ways:

  • A physical board centrally located in your office
  • A shout out in internal emails
  • A celebratory social media post
  • A place of prominence on your website

This way people can celebrate the employees’ success with them on multiple occasions and the honorees can find pride in their accomplishment.

Hold an Awards Ceremony

Have an annual or semi-annual event where you celebrate those who qualified for the incentive program. You could work it into your annual holiday party or throw a specific party just for the awards. 

For an extra layer of fun, you could set a theme for the whole party in hopes everyone participates. Not only is it a laugh, but it can help build community within your organization and be a morale booster.

If you build multiple incentive programs, you can create awards to hand out or certificates that everyone can enjoy. It’s also important to take a moment to honor those that helped.

Maybe one agent achieved 99% retention (awesome!), but they could have had assistance from a customer service rep or engagement specialist. Make sure to honor that person with an “assist” award to share the fun and the credit. For example, at an old job, my company would recognize one person for the project they led, but would include four gift cards, that person could then recognize up to 3 others that helped them with a gift card, too!

Helping Agents Track Their Client Retention Rates

It’s great to empower your employees to aspire to higher retention rates, but unfortunately, your agents don’t know what they don’t know. The major thing you need for an incentive program to run smoothly is the ability to track and report on client retention rates. This means having the tools in place to run that analysis.

First, to calculate a retention rate, you need the formula:

Retention rate= ((CE-CN)/CS) X 100

  • CE = number of customers at the end of a period
  • CN = number of new customers acquired during a period
  • CS = number of customers at the start of a period

Once you have your method to decipher the rate for each agent, then you can start launching your retention incentive program—of course, after you’ve completed the other steps listed out from above!

How an Agency Management System Helps Agents Increase Client Retention

An industry-specific agency management system can help your agents stay in consistent communication with their clients throughout the year to help them boost their retention rate and achieve their goals. In AgencyBloc, the two main communication-based client retention tools our agencies use are:

  • Automated Workflows (workflow automation)
  • Segmented Email Campaigns

Automated Workflows are built to simplify and automate the regular administrative tasks like some of your client-specific touchpoints. This automation can include:

  • Policy renewal reminders
  • Happy birthday emails (or half birthday to make it even more unique)
  • Client anniversary thank-yous
  • Policy submission notifications
  • New Medicare client onboarding

This ensures communications with their clients don’t go missed regardless if they’re busy or on PTO.

For segmented email campaigns, agents can target their opted-in clients with relevant, specific information that is pertinent to them. Some examples of this are:

  • Open Enrollment notifications to those who participate in OEP
  • Annual Election Period notifications to Medicare clients
  • Policy type-specific changes to those who hold those policy types
  • Carrier-specific changes to those who’ve partnered with those carriers
  • Group policy-specific information for better utilization from those enrolled
  • Changes for specific regions/states/counties/cities/zipcodes

Using segmented email campaigns, your agents can notify their clients ahead of time of coming changes. Identify which clients you want to target with the email, create the email(s), and press send. Clients will be appreciative of the proactive communication from their agent.

It’s a win-win situation.

Agents can use both workflow automation and segmented email campaigns to supplement their already stellar customer service to take their service to the next level. When this occurs, both the agent and their clients benefit—giving the agent a chance to boost their client retention rate and work towards your agency’s retention incentive by providing true value to their clients. 

Give Your Agents the Tools to Boost Their Client Retention

Using a system made for your specific industry needs can help your agents work smarter, not harder when it comes to client retention. Check out our free eBook discussing the 3 ways you can improve your agency's client retention.

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Posted by Allison Babberl on Tuesday, June 16, 2020 in Agent Management

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About The Author

Allison Babberl

Allison is the Content Lead at AgencyBloc. She manages the creation and schedule of all educational content for our BlocTalk and Member communities. Favorite quote: “Conversation is the bedrock of relationships. Without it, our relationships are devoid of substance.” -Maribeth Ku ... read more