How to Increase Insurance Client Retention
The average retention rate in the insurance industry is 84%, with the top performing agencies in the 93%-95% range. Retaining customers is all about the long term relationship you build.
It's no surprise that acquiring new clients is far more expensive than selling to existing ones. Your clients are people you already know. The Independent Insurance Agents of Dallas point out a couple key facts to consider:
- The insurance industry has the highest customer acquisition costs of any industry.
- It costs seven to nine times more for an insurance agency to attract a new customer than to retain one.
When thinking about your customer retention strategies, remember what you've already done with your "best" clients. You've taken the time to understand their wants and needs, honed in on your customer service, and have learned how to deliver. These clients trust you.
Building a relationship with a new prospect or client can take several months or more. Whether you sell health insurance, life insurance, or both, you know the importance of strong client relationships. That's why insurance agents focus so much on client retention.
Arthur Middleton Hughes, Vice President of Database Marketing Institute, says there are two ways you can increase retention amongst your existing customers.
Two ways to increase client retention at your insurance agency:
- Sell another policy
- Communicate often with your clients
How to Sell Another Policy
It makes sense that the more products a client has purchased from you, the more likely you are to retain them. But, there's also proof of it in the numbers (taken from Hughes's article):
Image: Database Marketing Institute
The answer to selling another insurance product to clients is to take a look at cross-selling. If you're maintaining a clean book of business, it won't be difficult to identify your clients' gaps.
Hughes offers this tactic for selling another policy:
- Offer a discount on your client's current policy if he/she buys another. Hughes suggests that you study your clients' purchasing behavior and figure out which types of products they're most likely to buy.
Selling another policy to current clients is likely to increase customer loyalty, but you have to make sure you're doing it with the best interest of your clients in mind. That's where AgencyBloc can help.
There are a couple ways to identify cross-selling opportunities with AgencyBloc:
- Find the average number of policies per client in your book of business. This will give you an idea of how many cross-sell opportunities you have and will be a good number to use to measure the success of your cross-sell efforts. However, this tactic doesn't tell you who needs what.
- Look for specific cross-sell opportunities within your book of business. AgencyBloc's Cross Sell Report quickly uncovers cross-selling opportunities for you. Using this report, search your book of business by coverage type and quickly find policy coverage gaps.
Once you identify these opportunities, reach out! If it's a short list, phone calls might make sense. However, if your search brought up a large list, an email campaign works perfect.
Keep your email concise. Let them know that you noticed their coverage gap, give them a few quick bullet points on the benefits of said coverage, and ask if they would be interested in chatting about it.
From there, treat these current clients like new prospects with timely follow-ups and heightened attention.
It doesn't hurt to run these cross-sell reports a few times a year, especially as the products you sell change. Your clients might not know everything you offer, so point it out to them!
How to Communicate Often with Clients
The second tactic to improve customer retention is to simply communicate often with them. Start this from the onboarding process and continue it throughout their customer lifecycle.
How often is often? It might differ client by client. Only you understand those individual relationships. A best practice for communicating with clients is to always reach out when something affects them and to find additional times you can add value to your relationship.
For instance, a carrier change on a product they own affects them. You'd always reach out in this situation. Similarly, a policy renewal date approaching affects them—always have a plan in place for this.
As for additional times to add value, find areas you can show you care about the relationship. The simplest example of this is Happy Birthday greetings. Beyond this, think about your expertise. What do you know that your clients don't, but should? Offering this advise (and value!) will add another layer to your client/advisor relationship.
Consistent communication reassures your clients that you haven't forgotten about them and that you're available when they need you. Even better, it shows them you're proactive and care about your relationship with them.
There are several touchpoints throughout each year that you can make. A few examples are:
- New Prospect - Lead Form Submission
- New Client Welcome
- Policy Status Update
- Happy Birthday
- Policy Renewal
- Referral Ask
- Clients turning 65 (or another important age)
These touchpoints could be phone calls or emails, but the main idea is to maintain communication. Provide a customer experience where your clients feel like a priority to you, no matter what time of year it is.
An easy way to ensure this happens is to automate! Set up emails to go out on these dates or a few months before, depending on the situation. Use these email templates to help you out!
AgencyBloc's Automated Workflow helps insurance agencies stay on top of client communication with minimal effort. Once you identify the touchpoints you want to make, create a workflow that will automatically trigger when the event arises.
A simple example of this is to automate policy renewals. Set up emails to be sent 90, 60, and 30 days before the renewal date to begin communication with your clients. You don't have to remember to send the emails; AgencyBloc sends them for you. You can have an activity (to-do) automatically appear on your dashboard at the same time, if you prefer.
When you use automation, you're making certain you communicate with your clients when you should. You're ensuring nothing falls through the cracks.
When you chat with clients, it's also important to remember to take detailed notes. And don't forget the informal stuff! Take notes on how their family is doing, their hobbies, and their vacation plans. That way, next time you speak with them you can pick up where you left off.
Insurance customers are relationship buyers. If you want to increase client retention, your relationships with your current clients have to always come before gaining new clients. And two ways to put your client relationships first is to identify their coverage gaps and to keep the lines of communication open.
Start communicating more often with clients right now!
Use these automated email templates to start communicating with your clients more often throughout the year, but without extra effort from you!
Download the Email Templates