Acquiring a new customer is 5 – 25% more expensive than retaining an existing one, depending on which studies you read. Yet most insurance agencies invest infinitely more in sales and marketing than they do in customer retention. If that’s true at your agency, it may be time for management to ask, “Why is that?”
Retention and churn are opposite sides of the same coin. And changes to your retention/churn rate almost certainly tell you that something is either working well or needs attention.
Now that we’ve established the importance of client retention, here are 4 ways insurance agencies can increase client retention.
According to a recent McKinsey study, consumers associate personalization with “positive experiences that make them feel special.” Furthermore, that same study showed 71% of consumers expect companies to deliver personalized interactions and 76% get frustrated when this doesn’t happen.
How do you suppose your clients would rate your agency on this metric? What could you do to improve that? Here are a few ideas that could make an impact with your clients:
These types of initiatives make clients feel special, increasing retention and minimizing churn.
Developing a regular communication program is a smart way to escape from making every interaction transactional. Consistent communication fosters trust, enhances the client experience, and reinforces the value clients receive from their policies and your agency.
Furthermore, taking an active interest in clients’ expectations of and experiences with your agency demonstrates your commitment to customer satisfaction. Sending follow-up surveys directly after interactions such as consultations or claims processing is a relatively simple and easy way to increase insurance agency client retention.
Digital tools and platforms have revolutionized the way insurance agencies engage with clients, enhancing satisfaction and fostering long-lasting relationships. This is especially true for Gen-X and Millennial clients.
If you’re not embracing technology, you are falling behind competitors, signaling to clients that you are not a top-tier agency. And you’re almost certainly spending money to have people do things technology can do better. Here are some ways your agency can increase retention by leveraging technology:
Mobile Apps & Online Portals for:
Obtaining quotes and purchasing policies on-the-go
Filing and tracking claims in real-time
Accessing policy documents and payment history
Receiving personalized alerts and reminders
Managing policies and updating personal information
Accessing educational resources and FAQs
Data Analytics and Personalization for
Delivering highly personalized experiences
Tailoring products and communication based on individual preferences
Providing proactive advice and recommendations
Anticipating customer needs and addressing them preemptively
Digital tools empower insurance agencies to engage customers seamlessly across multiple touchpoints, offering convenience, transparency, and tailored experiences – key drivers of customer satisfaction in today's digital landscape.
Educating insurance clients about products and the insurance industry offers significant benefits for client retention. Education and engagement initiatives enhance understanding, build trust and credibility, improve loyalty, facilitate cross-selling/upselling, and reduce misunderstandings.
To increase insurance agency client retention, consider engaging clients through educational initiatives such as these:
Organize seminars, workshops, and client appreciation events with expert speakers
Distribute informational newsletters via email
Create online resources like articles, videos, and webinars
Leverage social media for sharing educational content and discussions
Provide personalized learning opportunities
By prioritizing client education, agencies can foster stronger relationships, increase satisfaction, and ultimately improve client retention rates.
Does every interaction with your agency leave customers feeling special? The COVID-19 pandemic forced most people to explore alternative purchasing channels, patterns, and suppliers. That simply increases the pressure on your agency to work hard to make your most desirable clients feel special. Because clients who feel special are more loyal, and more likely to recommend your agency to family, friends, and colleagues.
Acquiring a new client is 5 – 25% more expensive than retaining an existing one. As a result, investing in client retention initiatives, such as those identified above, is as important as your ongoing investments in sales and marketing.