This is part of a series of posts on strategies to grow your insurance agency. These strategies incorporate digital marketing tactics, are inspired by technology companies, and are suggested steps you can take to win more business. If you haven’t already, you can read part 1 here.
When we left off last week I introduced the concept of a Flywheel, first described by Jim Collins in his best-selling book Good to Great. Jim Collins’ Flywheel has several components to it. Direction or focus, momentum or loop, push or effort, and the start or initial push. This post is going to focus on only one, which I find is most commonly referred to as a “loop”, and look at loops within the context of client acquisition.
The Loop is the component of the Flywheel where the momentum takes over and keeping the Flywheel spinning requires less and less effort. You probably have some client acquisition loops already in place, let’s look at how they impact your agency:
Loop In Action – Referral Loop
To illustrate the impact a strong referral loop can have for an insurance agency, I’m going to use a simple example:
- You left your previous agency to start your own at the beginning of 2018.
- 10 of your clients came with you.
- You get 1 new client referral each year for every 10 clients you have
- A 30 life group is worth $18,000 to you in commission each year. (This is low if you are using an online enrollment solution, but it’s an easy number to start with.)
- All 10 clients are the same, so your 2018 revenue is $180,000.
- No clients churn in 10 years
Acquire a client > Client has good experience > Client refers a new client > Acquire a client
Loop In Action – Paid Acquisition Loop
Consider the following statement: Customer Lifetime Value (LTV) > Acquisition Cost (CAC)
Strategies To Grow Your Insurance Agency
Understanding the impact of the loops you already have in your acquisition programs will give you a starting point to evaluate strategies to grow your insurance agency.
- LTV: Do you know what a client is worth to you? How long do they stay a client of yours? Do they refer other clients?
- CAC: Do you know how much it costs you to find a new client? Do you buy business contact information? Go door to door prospecting? Pay for software like Miedge to build lead lists?
Next week we’ll discuss ways to increase LTV and decrease CAC using digital marketing strategies.