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How to Increase Insurance Agency Client Retention

Open enrollment season is winding down. What should your focus be next? In today’s competitive marketplace, retaining your clients is key to ensure long-term profits. The average customer retention rate in the insurance industry is 84%, while the top five companies have a 93%-95% customer retention rate. This difference can represent a potential loss for you. Furthermore, it costs seven to nine times more for an insurance agency to attract a new customer than to retain one. Since replacing lost clients will cost you more, it makes economic sense to focus your efforts on keeping the clients that already trust you. In this week’s Broker Tool Belt, we share 4 programs to increase insurance agency client retention and help you succeed in 2020.

Four Programs to Increase Client Retention

Signing a BOR letter is hard enough, but keeping your clients happy after that is a different challenge. Your clients expect flawless service from you, and even if you are a smart and competent broker, you can still lose them if you decide to ignore them until Open Enrollment. Customer retention programs help you stay connected with your clients and create a mutually beneficial relationship. In 2020, adopt the next four marketing programs to increase your insurance agency client retention.

why do customers leave a company
Source: The Rockefeller Corporation (via Smashing Magazine)

1. Onboarding

Onboarding is the process of welcoming new clients to your agency. When you win new business, don’t sign the BOR and forget about them. If you bring your new clients through a thoughtful onboarding process, it will help you build long-term relationships and set your agency up for success.

Welcome package: once you win a new client, send a welcome email to start strengthening the working relationship. After sending the welcome email, make them part of a drip campaign. In each email, share the most important information and materials you consider your clients should know. For example, add your contact information, some background about your agency, their policy information, a guide to online accounts, and other resources like your blog.

Discuss expectations: miscommunication of what your clients expect from you can lead to high churn. Vice-versa, it’s important for your clients to understand what they should expect from you as an insurance broker. Sit down with your clients when they join your agency and discuss expectations to set yourself up for success from the beginning. For example, if you say you are going to make your clients’ responsibilities easier by implementing a technology solution that will help streamline benefits management and then you don’t, you will be disappointing them and they’ll end up leaving.

2. Customer Service

Customer service is a one-on-one interaction between your agency and your clients that aims to solve a question or problem. When talking about customer service, you might picture big companies with a whole team dedicated to pick up phone calls and solve clients’ problems, for example, with product purchases or software. However, customer service doesn’t only apply to big business.

Implementing great customer service into your agency will add more value to your clients’ experience and will demonstrate a commitment to them. For your clients, being able to call you and get a personalized solution to their problem will boost trust and increase customer retention. Your clients will remember your effort to help them accomplish their goals.

Don’t make it difficult to contact you. Don’t pass your clients around from one person to another and don’t make them talk to a machine. That will cause the opposite effect. Your clients will get frustrated and will be prone to leave. A way to be proactive with customer service is creating a knowledge base that provides your clients with resources to solve their own questions. For example, create basic “how to” articles or brochures and add them to one place so your clients can access them easily.

importance of customer service
Source: CXL Institute on June 3, 2019.

3. Customer Loyalty Program

A customer loyalty program is a strategy designed to reward your most loyal clients, for example, clients that have been with you the longest. If you have cashed in miles or got a free coffee after buying nine, you are familiar with the way a loyalty program works. 70% of customers would recommend your agency if you offer a good customer loyalty program. Your clients will help you grow your agency when you show them you care.

We understand that an insurance agency is not the same as a coffee shop. For some businesses, the reward is clear. They can offer their products for free or at a discount. But you are selling insurance, an intangible product that you can’t give away for free. Although complicated, you can still generate loyalty and increase your insurance agency client retention. For example, if you want a simple solution, you can give away branded gadgets. If you want to go bigger, offer your most valuable clients gift cards or tickets to an HR conference to show them your appreciation.

4. Digitize Your Agency

Employers and employees often find health care options confusing. If your clients get frustrated trying to figure out what the best package for their company is and give up on your process, you would be wasting all the money it cost to get them interested in the first place. They might still go through open enrollment with you, but their user experience will be poor and they will be easily convinced to change brokers if a competitor approaches them.?

When you provide your clients with a technology solution to make their work easier, you will bring greater value, streamline the process, and allow them to manage benefits online, 24/7. Everyone involved in the process will save time and will have a more satisfying experience. For example, if the tool you are offering to group administrators has a rules-based system, meaning employees can’t advance if they haven’t filled out all the fields, you will be making their work easier and eliminating potential missing information. If the system has a comparison tool that shows a side-by-side overview of all the plans offered, employees will get a better understanding of the differences and will be able to more accurately pick the right one for them.

When your clients start using the tool you offer, they are less likely to move to another insurance provider, even if they can get a slightly better price, because the whole company will be integrated and using the same system. Their satisfaction with your services will be boosted and you will be able to increase your insurance agency client retention.

51% of employers want help from brokers to find technology
Source: Guardian Workplace Benefits study 5th Annual

Final Thoughts About Insurance Agency Client Retention

If you want to generate long-term advantages, it’s key to increase your insurance agency client retention. Engage with your clients and make your agency an indispensable factor in their day-to-day work. To accomplish this, ask your clients what they want and need. Empower them by providing solutions to their pain points. With time, your clients will see that you care about them and they will trust your agency more and more. Go that extra mile to build true loyalty that generates long-term customers.

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