Do you struggle to retain customers after an initial interaction like many others in the insurance industry? If so, you need to consider implementing a few key strategies to help increase your retention. Doing so can drastically increase the amount of business you are able to do while cutting costs of equal or greater proportions.
Customer retention is all about the long-term relationships you build with clients to secure both their business and loyalty throughout the years. Let’s look more closely at the importance of customer retention before diving in to explore six strategies you can use to increase customer retention.
Why Is Customer Retention Important?
Customer retention affects almost every aspect of business today. When you have the right customers, and you hold on to them, your sale rate increases, your lead generation costs go down, your customers’ loyalty becomes stronger, and you exponentially cut your own costs.
By prioritizing customer retention, statistics show that you can directly increase your business’ profits by 29% at minimum, and it can increase them all the way up to 95%. This is an especially powerful statistic because the benefits for retention are balanced by the hefty price you’ll have to pay if you’re constantly hunting for new clients and not maintaining any existing relationships. In fact, the cost of acquiring new customers is five times more than the cost of retaining customers who already patronize your business.
Today, the average retention rate in the insurance industry is 84%. This makes it seem like most insurance providers are doing a good job of retaining their customers, and they are, but when other businesses are averaging 93-95% customer retention, you can see that the insurance industry has a lot of work to do to improve their statistics.
How Can You Improve Customer Retention?
There are many different strategies you can implement to help increase your customer retention rates. From streamlining potentially complicated and time-consuming processes to adding value, cross-selling, providing annual coverage reviews, incentives, and staying in touch with customers, there is no limit to how you can improve your strategies.
1. Streamline Paperwork Processes
One of the most frustrating aspects of working with new businesses for customers is the oftentimes lengthy paperwork process–especially when they’re onboarding. You can reduce this frustration and increase customer retention by implementing a few key elements to make the experience as painless as possible.
Perhaps the easiest way to do so is by automating as much of the process as possible. When customers no longer have to input so much data manually, they’re going to be much more refreshed and receptive to understanding your company’s policies, operations, and brand. The simpler and easier processes of getting quotes, servicing policies, and filing claims need to be as straightforward as possible.
2. When Policies are Active, Add Value
It can be easy to drop or overdo expensive, time-consuming customer service aspects from your company’s operations once customers have active policies. After all, they’ve already purchased your services from your company. But if you don’t take the necessary steps to ensure that your clients are happy with your business while they have it, you may not retain them for very long.
One of the fastest ways companies lose clients today is by overwhelming their inboxes with more information and advertisements than they need. In fact, the more times a client hears from you, the more likely they’ll be to quit working with you. So, no matter what you send, make sure it’s valuable information that comes in a variety of ways. Doing so can help retain customers long-term.
3. Cross-Sell and Upsell Your Customers
Cross-selling happens when you sell existing customers a new product or service that your company is offering. Upselling happens when you persuade customers to invest more money in their original purchase with upgrades or various add-ons to increase the value of their purchase.
If handled correctly, each of these methods can increase your customer retention. Cross-selling helps your customers’ loyalty to your company to grow because the more they buy from you, the stronger their opinion of your company will be. They’ll learn to trust your service quality and will stay with your business for years. Upselling helps increase customer retention because you can use the opportunity given in the original purchase to show clients your broader range of service and add-on options–options that other companies may not provide.
The key here, however, is to not be pushy with either cross-selling or upselling. If you push customers to make newer or bigger purchases, you may end up driving them away.
4. Perform Annual Coverage Reviews
When you perform annual coverage reviews for your customers, you keep them up-to-date with each new policy and programs your agency is offering. You can give clients the opportunity to explore the coverage options they have and add or remove policies as needed. This is a great way to provide accommodations for your customers that will make them work with your company long-term.
5. Provide Incentives and Rewards
Incentives and rewards are great strategies you can use to increase customer retention. After all, who doesn’t love a reward?
With these incentives, make sure they’re quick and easy to redeem. Don’t potentially drive away customers by making those processes too complex and frustrating. Additionally, make sure you offer packages and rewards that will appeal to a variety of people. If customers don’t want the incentives or rewards you’re offering, why would they take the action you’re trying to elicit?
Further, these incentives don’t have to be big, up-front prizes. Instead, you can use the element of surprise to add, like gifts, to encourage customer loyalty to your business. And, when they do, your company will stay at the top of your customers’ minds and its perceived value will only increase.
6. Stay in Touch With the Customer
Staying in touch with your customers is a key part of retaining their business. If your customers feel like you don’t care about them after you get their business or if they no longer receive updates or policy information from you, they may choose to work with another company in the future.
Make sure that you regularly communicate with your customers effectively and understand their experience with your company so that you can improve it. Send them reminders about policy updates, new information, or fun programs and incentives you have in the works. Just make sure that when you do so, you’re not overwhelming them with too much information that may drive them away.
Customer retention is a vital part of any business. If you don’t keep the customers you have and develop long-term relationships with them, you’ll constantly be sinking your time, money, and energy into finding and trying to hold onto new clients. But if you set yourself up in such a way that clients enjoy working with you, your business will be able to reach every goal you set.
Better Agency: The #1 Insurance CRM
If you are an insurance agent looking to grow your agency and streamline your processes with automation, then you need to use an Insurance CRM.
Better Agency was built by insurance agents and it’s the top choice for agents looking to grow their business. With Better Agency you can take advantage of all the top features included: automation campaigns that are built into the platform. This includes all of the emails and text messages, as well as reporting and task management.