You've spent years building your book of business one client at a time. You care about your clients, and you give them your best every day. You hate seeing them leave. Sure, some attrition is going to happen, but the cost in revenue and referrals is high. Let's talk about five ways that you can get way ahead of the industry in keeping your clients and increasing customer retention rates.
Develop a Relationship of Trust and Value
The worst way to try to keep clients is to compete on price. One-time customers buy on price; long-term clients buy on trust and value. If you want to increase your customer retention and find clients who stick with you, you have to establish trust and provide value.
Trust is an emotion. It tells the client that everything is going to be ok. Why will everything be ok? Two reasons:
- Care. They know that you think of them as your people, not as transactions.
- Credibility. They are confident that you know what you're doing with their money.
Trust is a barrier to entry. Once they trust you, you have an advantage over a competitor with no established relationship. Clients can't get care and credibility from a website.
Value is what earns you the right to a premium. Sure, they can get a cheaper policy from a website, but what will they lose? Having everything in one place. Having someone they can trust. Being able to meet face-to-face when needed. The list goes on, but the more value you add to the relationship of trust and value, the less susceptible you are to price competition.
Meet Your Clients
The old adage "absence makes the heart grow fonder" is not true with clients. When your client doesn't have any meaningful interaction with you for too long, they forget about your value. Worse, they're constantly bombarded with opportunities to jump ship and save some money. So it's no surprise that agents with the highest retention are those who get in front of their clients.
In fact, they do more than just meet: they train their clients to look forward to meeting them periodically. Hands down, the best way to do that is through a well-designed and consistently executed review appointment program.
Many review appointment programs fizzle out because they're viewed as tasks or mundane activities. A good program has important properties, such as the following:
- It starts with a clear understanding of the desired outcome.
- It is managed, measured, and optimized for performance over time.
- It focuses on the overall customer experience.
- It's consistent.
Engage With Your Clients
It's one thing to meet your clients and provide them a service. It's another to engage with them. Engagement goes beyond selling them a good product or service at a fair price. The local grocery store sells good products at fair prices, but that doesn't mean they engage with you.
Engagement is where you add the most value to the relationship with your client, and where you can have the biggest impact on customer retention. What does it look like? Here are a few examples:
- Communicating with them even when it's not time to sell them something.
- Sharing valuable information with them.
- Making them feel at-home in your office.
- Being 100% focused on learning about them and their needs.
- Being completely authentic and transparent.
- Educating them.
- Empowering them to make decisions with confidence.
- Showing sincere appreciation.
- Following up and keeping commitments.
- Creating a consistent, positive client experience from beginning to end.
Multiline Your Clients
Clients with 3 or more policies are likely to stay with you for a decade or more, providing numerous opportunities for revenue and referrals, not to mention deeply fulfilling relationships. Single line policyholders, armed with unlimited price information, are more like a conveyor belt.
This is a great time to mention the single metric that most accurately represents the overall health of a book of business: your Policies to Household ratio (P2H™). We consistently see that agents with P2H over 3.0 have lower attrition than agencies with P2H closer to 1.0. They also spend more time meeting with clients and less time on cold leads than their peers.
Of course, not all policies are created equal—three auto policies are not the same as a combination of auto, homeowners, and life. On the whole, though, finding more ways to leverage your portfolio to serve your clients is a must for great retention.
Get Referrals and Social Proof
Every business wants referrals because it means more revenue, right? Yet there's another reason that referrals are important. When a client refers a friend or family member to you, they're signaling that they trust you. Think about someone you've give referrals to. More than likely, you felt more strongly committed after the referral than you did before. You may have said something like, "my dermatologist," or, "my real estate broker," or, "our favorite restaurant." Every time you say this, you're increasing your personal commitment to them.
The same is true of social proof. When you give a positive rating on Yelp, or like something on Facebook, you're making a recommendation. It's the same thing as a referral, and it has the same effect.
Never meet with a client without asking for referrals.
Bonus Step: Make it a Priority
High customer retention isn't just a statistic; it's a way of doing business. Retaining clients at top-agent levels requires making it a core part of your agency's business. A look at Client Focus' business model will help illustrate what this looks like
At Client Focus, we have the same customer retention challenges that every business has. How we've addressed it, however, is different. First, we've made it part of our shared purpose. What's a shared purpose? It's like a mission statement in that it describes the reason that we all come into work each day. Ours looks like this:
- Employees who thrive (learn more about this here).
- Customers who stay.
- Aggressive, sustainable growth.
Number 1 is management's job: creating an environment where employees can grow and thrive. Everyone else aligns to number 2: doing whatever is necessary to keep customers. Instead of aligning to a bunch of policies and procedures, they align to that. It's incredibly powerful.
Moreover, one of our Company Values is "Customers. We understand and deliver on our customer's definition of success." We make it every employee's business to drive success for our customers, and we empower them accordingly.
How does that apply to an insurance agency? Good question! Have you made customer retention an explicit piece of your agency's culture? Is it spelled out in your objectives and in your values? If so, implementing the steps we described in this article will be much easier and much more successful.
Putting It All Together
At the end of the day, clients need to know that they're better off with you than without you. They need to recognize that saving a few dollars by going elsewhere is a bad trade-off. That will happen when they move from being a customer to being a client. You move them from customer to client when you meet and engage with them, develop a relationship of trust and value, and provide a superior overall experience. If you make this a business priority, you'll lead the industry in client retention.
by Matt Wagner, Vice President of Strategy