Business gained isn’t business guaranteed. While an effective insurance agency sales campaign will bring in new customers, your retention strategies will turn new business into sustained profit.
The average customer retention rate for insurance agencies is roughly 85%. While that sounds high, losing 150 out of every 1000 customers annually can translate to significant losses, potentially over six figures in profit margins. Here are the top five strategies you can integrate into your insurance agency sales efforts to increase your customer retention rates.
Honesty is foundational for any insurance agency. However, many fail to consistently maintain this principle. When it comes to retention, honesty is crucial. For example, if a customer files a claim regarding an auto accident that wasn’t her fault, you have an ethical responsibility to be transparent about possible compensation. This honesty builds trust and significantly improves customer retention rates.
The best insurance agencies distinguish themselves by focusing on customer retention. Regardless of how many new customers you attract, you're missing a critical element of success if your goal isn’t to grow your existing business. Cultivating current client relationships and having a sales strategy focusing on expanding their life, home, or auto insurance needs is essential for long-term success.
Specializing your product offerings allows you to target specific customer demographics more effectively. By providing more personalized service to targeted customers, you can strengthen your relationships with them. Developing your agency around specialized products can help you create a niche. If you’re the only agency in town offering certain types of policies or if you understand your product offerings better than any other agency, your customers are more likely to stay with you. This approach benefits both sales and management strategies.
The insurance industry is subject to change, with new trends and legislation continually emerging. Staying updated on these changes ensures you can provide your clients with the most current information. For instance, if a client is trying to purchase a new auto or home policy, she’ll want to know if insurance prices are expected to rise soon. Being well-informed allows you to offer valuable advice, fostering trust and loyalty.
Long-term success in insurance sales hinges on staying connected with your customers and understanding their needs. Recognize how you can best serve their evolving requirements. While certain products are designed to attract new customers, knowing which ones can positively impact your current customers’ lives is a smart sales strategy. Tailoring your offerings to meet their needs demonstrates your commitment to their well-being, encouraging them to stay with your agency.
You've invested significant time and finances to start your independent insurance agency. As you would with your clients, be sure you have the proper coverage. AAI provides your agency with a roadmap to success, including advising you on the essential insurance policies you need to build and grow your independent insurance agency. Contact us to learn more!