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The Customer Relationship Lifecycle: Maximizing Insurance Customer Retention

Troy Wilson
By Troy Wilson
The Customer Relationship Lifecycle: Maximizing Insurance Customer Retention Feature Image
4 minute read
⚠️ Disclaimer: While every effort has been made to ensure that the information contained in this article is accurate, neither its authors nor Aged Lead Store accepts responsibility for any errors or omissions. The content of this article is for general information only, and is not intended to constitute or be relied upon as legal advice.

Customer RetentionKeeping the customers you have is more than half the battle. Too many focus on the acquisition and sales closing stages of the customer relationship lifecycle, ignoring what comes after.

So who’s winning in the insurance business? The ones who are building their book of business. The ones who maximize that customer retention.

The reason is simple. As John Carroll puts it — customer retention is a sales strategy.  Understand the customer relationship lifecycle and you, too, can increase customer retention. Here’s how.

The Customer Relationship Lifecycle

To focus on the latter part of the customer relationship lifecycle, you have to understand it. So much time in sales in spent on getting to the close, it’s worth taking a look at this bigger picture cycle in more detail. In general, there are five key stages:

Reach – You reach prospects either through your inbound marketing or cold calling. Once you establish first contact, the process of establishing a potential new customer relationship begins.

Acquire – You qualify your leads and pursue a sale for those who meet your criteria. You acquire new customers, and the cycle should really be getting underway. However, far too many agents drop the ball at this point.

Develop – The crucial setup for retaining and upselling customers down the line — not to mention getting high-value referrals — starts here. You have to develop a relationship with your now-established customer. Start with their buyer satisfaction and send out light communications at regular intervals.

Retain – A one-time satisfied customer is a repeat customer. The time you spend caring for your current customers pays for itself over time. Consider simple gestures — birthday or account anniversary cards, surveys that show you value their feedback, discount offers, relevant product tips or updates.

Advocacy – A satisfied customer that feels appreciated is going to become an advocate for your agency. Here you have the opportunity to get more and better referrals. An agency that pays attention to this whole cycle will have a self-perpetuating business.

Customer Retention in Practice

You may be wondering what customer retention looks like in the real world. The fact is, with a little bit of cross-selling and a few yearly communication pieces, you can increase retention, as well as profits.

Arthur Middleton Hughes has one of the best discussions of how insurance salespeople can put a customer retention program into action and what the payoff can be.

Many agents know that the more insurance products a customer has purchased from their agent, the more likely they are to remain a customer. It’s true for other industries as well, notes Hughes. That’s why your bank always wants to give you a free savings account when you open a checking account.

Hughes goes into detail on NBP (Next Best Product) strategies to use on your existing customers, but suffice it to say that adding a second product — say, adding an auto policy along with a home policy — kills two birds with one stone.

Your customer will be buying a second product, generating a profit, obviously. But you save enough money on prospecting and marketing to a new client that you can offer an incentivising discount and still make a profit.

How much profit, you ask? According to numerous studies, every $1 spent on customer retention efforts increases profits by $5.

However, customers don’t want to buy one insurance product in January only to be upsold on a second purchase out of the blue in August. They want to be wooed.

In an internal study at Travelers, a test group of agents sent out customer retention communications over the course of a year:

  • An annual policy renewal
  • A thank you card
  • A cross-sell postcard
  • A newsletter
  • A seasonal greeting card

The efforts resulted in a 4% higher retention for auto insurance customers and a 5% higher retention for property insurance customers. For Travelers, the increased customer retention resulted in millions of increased profits, while for the individual agents, the ROI was hundreds of dollars per policy.


Customer retention matters — both to your short-term profits and long-term business growth. It pays to understand the customer relationship lifecycle, especially those fuzzier stages that come after the sale. When it comes to your customer relationship efforts, a few postcards and cross-sales promotions really can move the dial.

Looking to build relationships with a new batch of customer leads? Consider a fresh supply of high-quality aged leads today at The Aged Lead Store. You’ll find thousands of sortable aged leads that are ready to go whether your business is auto, life, health, or home insurance, mortgage refinance, or solar installation.

Troy Wilson

About Troy Wilson

Troy is the CEO and founder of Aged Lead Store. He has been in the lead generation industry for over two decades. His blog posts focus on how to refine your sales process and get the most out of your insurance leads, mortgage leads, and solar leads.

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