An AgencyEquity Exclusive
You have built or acquired your agency and over the years, you have gained many existing clients. Some accounts may be well rounded, some are not, and some policies are on the verge of falling off the books. Yet you are still seeking new business the same way: what are you thinking? You can get a significantly better return on your marketing efforts when you concentrate on your own book. This article will review exactly why your efforts and investment dollars should be focused on your own clients and the warm prospects of your agency.
Very Cost Effective Marketing
Insurance is a very personal business. The best clients probably don’t come to you just from viewing your website. Those people who inquire on your website have probably requested a quote from several other ones in hopes of getting the best deal. This is not the most effective way you can prospect for business. An appealing website is great for prospects who want to learn more about you and you should have an informative one. However in most cases, it’s not going to bring you the most loyal and higher premium clients.
Directing your efforts toward your existing clients is smart because you are marketing to those in which 100% of recipients know you. In marketing to others, you would be lucky if 1% of those reading your material know you. Which group do you think will yield a better return on investment? I think you would agree that marketing to your own clients will get a significantly better response rate, but it does not end there.
What do you think the conversion rate would be for those who already do business with you vs. for those who don’t know you? In most cases, those who do business with you will probably exclusively inquiring with your agency, most especially if you reached out to them, while those who don’t know you probably have inquiries with a number of others. Because of this, you will get a higher response from your marketing efforts from those who know you, more trust and as a result a much higher closing rate. If your response rate for existing clients is double that of new business prospecting and your closing rate is also double, your marketing efforts on your existing clients will results in 4 times the return from new business prospecting. I actually believe both of those numbers are even higher. Therefore, the return on investment on client marketing is significantly higher than for new business marketing.
How many times have you asked a prospect who their agency or insurance company is and they say “I can’t remember.” That is probably because the firm they are with doesn’t do enough marketing. Most people probably won’t refer if their agency if they did not hear or know much about their agency, let alone remember their name. That why Coke and other well-known brands constantly advertise even if most people already buy their brand. Advertising works because it does a great job in making sure people don’t forget the name. In the same way, you can build your name recognition and professionalism with your clients if you have an ongoing marketing program. However, talking to your clients a few times a year is not enough. Marketing is a huge effort and those who do it enough and have strong interest in their client base get more noticed and as a result, more referrals.
Any account that has not been rounded has a significantly higher risk of attrition. Would you rather have three clients with one policy or one client with three policies? Well managed agencies know that having one client with three policies is going to stay on the books for a much longer period of time than a single line account. With some accounts, you may share the business with another agency. The other agency wants the other portion of the account as much as you want it. Often the client is happy with both agencies, but account rounding will eventually make sense because of multiline discounts and having a single contact. Who is going to be the winning agency? It’s the one that does a better job of marketing and making positive impressions on clients. It’s the agency committed to investing in its own clients.
In addition to rounding existing policies, there are clients who have coverage gaps in their insurance programs. Examples of this are those who don’t have and may need an umbrella policy, E&O insurance or life insurance. While a policy review should uncover these situations, proper and targeted marketing to existing clients can point this out and prompt a client phone call to the agency.
Cross Line Marketing
If a client has commercial lines with your agency, they know you as a commercial lines agency. If they have personal lines with you, their image is going to be that you are a personal lines agency. The same applies if a client only has benefits with you, but not their commercial accounts. If you don’t have a cross line marketing program, they have no clue that you offer a broad portfolio of services. The more you inform your clients about what you do, the more likely they are going to reach out to you. Even if they are happy with the great service you provide for commercial lines, they will never place their personal lines with you if they don’t know you offer them. You need to build a client’s knowledge and confidence about your other lines, quality targeted marketing to your existing clients will help accomplish this.
How many times have you prospected a client and regardless of your rate offer, the client seems very attached to their existing agency? It’s because that agency has done a great job with their existing client marketing program and has built a solid name for itself. You can also make your clients “bullet proof” to competitors if you reach out to your clients on a regular basis. The higher the retention rate is, the more stable your agency income is as the necessary foundation for growth. If you have an above average attrition rate, then you are just replacing policies instead of growing the business.