It’s one thing to sign a new customer but another thing entirely to keep them happy and coming back for more.
As an insurance agent, it’s critical to focus enough time, money, and energy on customer retention. A high churn rate can kill your business.
While the research and numbers vary, it’s estimated that it costs five times as much to attract a new customer as it is to keep an existing one.
In other words, you can save yourself time and money by focusing as much on customer retention as you do on sales, marketing, and advertising.
What is customer retention?
Your definition of customer retention may vary slightly from the next person’s, but here’s a basic overview as shared by Salesforce.
“Customer retention refers to the rate at which customers stay with a business in a given period of time. This is often referred to as churn rate and is a key metric for practically all B2B and B2C businesses. In general, the lower the churn, the more loyal the customers and more successful the business, as the business retains more customers over time.”
Your goal is simple: to keep customers with your business for as long as possible. This helps with cash flow, stability, and growth and that’s just the start.
3 things that can kill customer retention
Before we discuss the five best customer retention strategies, let’s dive into three things that have the potential to hold you back.
1. Poor customer service
As an insurance agent, you won’t talk to your customers often. In fact, it’s most likely that you’ll only talk to them when something goes wrong. However, when you do have the chance to connect, be sure that you provide the highest quality customer service experience in your industry.
2. Providing the wrong solution
You’ll do whatever it takes to make a sale, right? While motivation is a good thing, it could lead you to sell the wrong solution to a customer. You may win the business upfront, but this increases the chance of a low retention rate.
3. Lack of communication
You don’t have to remain in constant contact with your customers, but it’s important to show that you care. A lack of communication makes it easier for a customer to pick up and leave you for a different provider. There are many ways to maintain communication such as a weekly newsletter, monthly mailers, and bi-annual phone calls.
How do you calculate customer retention rate?
With accurate data, it’s simple to calculate your customer retention rate. Use this formula to get started:
[(E-N)/S] x 100 = CRR
- E: the number of customers at the end of a given time period.
- N: the number of new customers gained during that time period.
- S: the number of customers at the beginning of the time period.
Finally, multiply the number by 100 for your customer retention rate displayed as a percentage.
What are the best customer retention strategies?
Now for the fun stuff. You want to know which customer retention strategies you can use to your advantage. Here are five of the best.
1. Focus on customer service
According to Zendesk, “approximately 61 percent of customers say they would switch to another provider after one poor experience.”
One poor experience could be the difference between a happy, paying customer and one that heads for the hills. This alone proves that dedication to customer service is critical to maintaining a high customer retention rate.
2. Build long-term relationships
Once you sell a policy, it’s easy to move on to the next prospect. It’s okay to do this, but don’t lose sight of the step you can take to build a long-term relationship with your newest customer.
There are many ways to do this, such as personally calling the customer to answer their questions, maintaining communication throughout the year, and providing regular policy reviews when applicable.
Your customers are more than numbers. They’re people. Build long-term relationships and your retention rate will thank you.
3. Pay attention to the details
It’s the finer details that have the biggest impact on your business. Examples include:
- How often you check in on your customers
- The approach you take when issues arise
- How many other people in your company provide service to your customers
There’s no detail too small. Treat every customer like your only customer.
4. Personalize your communication
The more customers you gain the more difficult it is to maintain personal communication. But that doesn’t mean it’s possible. There are many ways to do this:
- Hire enough staff to support personalized communication
- Personalize email communication, such as with the customer’s first and last name
- Make note of important dates, such as customer birthdays and anniversaries
5. Don’t just sell, educate
This goes along with providing industry-leading customer service.
As an example, let’s assume you have a large base of auto insurance customers. You want to introduce your line of life insurance policies to them and have two options for doing so:
- Contact them by phone, thank them for their business, and sell them the benefits of life insurance.
- Regularly share life insurance via email and mail to nurture the prospect.
The first one is a more direct form of sales. You’re diving in headfirst. The second option is more about educating and less about selling.
As you provide more information, your customers may reach out to you to learn more. And even if they don’t, you have a strong foundation on which to jumpstart your first discussion about life insurance coverage.
The more you focus on customer retention the more you’ll realize the positive impact it can (and will) have on your business.
Even if you only implement one of the strategies above, there’s a good chance it’ll lower your churn.
Are you looking for new ways to drive business? Aged Lead Store has what you need.
We make it simple to buy high-quality, affordable insurance leads in bulk. With these, you’re always in a position to win new business. And once you win them, you can focus on customer service and retention.
Photo by Yan Krukov