Increasing Retention with More Lines of Business

Independent agency owners fall for shiny new object syndrome a lot. You may be thinking “If only I had a better location, referral list, or a different market…” or whatever the next best thing of the day seems to be. There will always be a next best thing but using the foundation already available to you serves you better in the long run. Grow your roots with your current client base instead of exhausting yourself looking elsewhere. Your current client base provides numerous opportunities to increase profitability – you just have to know where to look! By cross-selling to your client base, you’ll retain them longer and reap the benefits of a lifetime customer.

Here are the facts about retention:

  • It costs 7 to 9 times more for an agency to attract a new customer than to retain one.
  • Sustained, 5% improvement in retention can double profits in five years.
  • Improving client retention by 3% could improve profits by 6% to 10%.

The average retention rate for the insurance industry is 84%, but top companies in the industry are beating that average by 10%.  While a retention rate of 84% isn’t bad, you’re still losing 16% of your customers to your competition per year. Beating the average isn’t just nice for vanity’s sake – it’s where the money is! And stronger relationships with your customers. So, where do we start?

Write 100% of your client’s business.

Your client’s will need several lines of business over time. They don’t want to have to keep track of an agent for every separate thing. When they write all of their business with you, you’re their main agent and it profit’s your agency. Do you offer personal lines, commercial lines, benefits, and life insurance? This isn’t anything new they need, they just may have purchased it elsewhere before. Think of it this way, for every $1,000 of commission income, there’s another $1,000 sitting out there in the hands of your competitors.

Provide a great client experience.

A great client experience is one of the factors that leads to 99% effective retention and 50% referrals. This experience is made up of subtle reminders that you’re there for them and have what they need.  Think about adding one or more of these processes to your regimen:

  • New client onboarding process
    • Identify coverage issues. Find their pain points from the old policy or relationship and provide a solution.
    • Make sure to give them the best contact information for your agency and your direct line if possible. No one likes getting stuck not knowing who to call.
    • Create an exit barrier by asking for referrals.  This will take some retraining of your staff but they will get the hang of it if you are persistent. 
  • Renewal process
    • Renewal questionnaire mailed 90 days prior to renewal to stay up to date on things that may have changed during the year.
  • Drip campaigns  
    • Email drip campaigns regarding coverages relative to their business are a great way to keep you top of mind and show them you offer additional lines
    • Several carriers provide postcard campaigns that can be personalized with your agency’s information and mailed to your clients. These could be geared toward coverages related to today’s marketplace, seasonal changes, or trending topics.
  • Online presence
    • You’ve heard it a million times – your online presence will make or break you. Stay up to date on social media, but keep in mind it doesn’t have to be all insurance all the time. Feel free to keep things relatable with things like community involvement, work anniversaries, and even some personal life updates.

These simple changes could solidify the relationship your client has with your agency and open the door to more lines of business. When seeking additional lines of coverage, they will call you first instead of shopping around. They trust you – and a trusted relationship is one of the best ways to retain a client.  In today’s time, your clients can buy coverage from Flo or a gecko without ever speaking to a live person.  We need to be aware of this and make the relationship with your agency a smooth and easy one, therefore shutting that door of price shopping with your competitors. 

Invest your time in your best customers.

One of the benefits of owning your agency is choosing who you want to work with, but several agencies drain their time and energy with clients who don’t really fit them. Hear us out on this one. Identify your most profitable clients and give them an “A” rating. You’ll be surprised they are about 20% of your book. Next, identify your “B” clients. These should be 15%-30% of your base revenue. Anyone not in the “A” or “B” category need to be fired. Again, hear us out on this one! The “C” clients are the easiest to acquire but take up the most of your valuable time. These are the ones that barely generate revenue but seem to need the most servicing. For one, your team should be spending more time rounding out accounts with the clients that generate the most income rather than servicing. That’s what service centers are for! But in the grand scheme of things, if you get rid of “C” clients, it will free up time to round out your book of business and ensure the agency’s long-term profitability.

As time is the only commodity we can never get more of, it’s best to use it wisely and profitably!  The more you’re able to write your client’s business, ensure a wonderful experience, and continue to establish strong relationships with your top customers, you will find business to not only boom, but become enjoyable and rewarding for you, your staff, and your clients!


Category: Agent Success