Many insurance agents try to grow their books of business through endless pursuit of new clients. In doing so, agents risk losing business they already have. The people who have already trusted you with their insurance may purchase more and can be an important source of referrals. If you don’t keep in regular touch with them, they may take their business and referrals elsewhere.
Joe Totah, president of Strategic Agencies, LLC, the publisher of AgencyEquity.com, warns that clients will leave if you don’t consolidate all of their coverages with you.
“When an agency shares an account with another agency, sooner or later one of the agencies is going to consolidate that account. That is why single line accounts are risky.”
Totah says agents who don’t regularly market to existing clients are also short-changing themselves. “By not doing regular existing client marketing, you are missing out on easy business, not rounding accounts and not getting referrals,” he says. Prospecting for new clients can be tedious and often comes down to battles based on price. “Winning on price is not easy business,” he says, “and many won’t even move for price.” The easier way to grow is to market to existing clients so that you “operate more like a doctor’s office where people are coming to you.”
Despite the danger of losing business, the average agent doesn’t focus enough on retention by doing annual policy reviews with clients, says Chris Paradiso, owner of a Connecticut independent agency.
He advises combining aggressive marketing for new business with proactive outreach to existing clients. A marketing team and budget for new business is important, he says, but “the foundation of an agency is residual income from existing clients.”
Some agencies don’t cement relationships with clients because of a negative mindset, according to insurance management consultant Brent Kelly of Sitkins Group. “They don’t ask, maybe because they feel like they haven’t earned it,” he says. Consequently, while 90% of clients may renew for a time, less than 10% refer others to their agent.
To keep existing clients from walking away, Paradiso says three steps are critical:
- Cleaning up the agency’s data within its agency management system
- Implementing a technology tool such as DONNA, an artificial intelligence and data analytics platform for independent agencies.“It literally hands you up sale opportunities and finds holes and opportunities within what clients presently have for coverages,” he says.
- Documenting processes and procedures to ensure staff are operating consistently. He recommends a video library of procedures.
Totah recommends outreach at least monthly and phone calls to clients at least once a year. “Constantly touching the client not only helps retention,” he says, “it helps get more referrals.”
While emails, social media and electronic newsletters are great, he believes sending a couple of hard copy mailers each year and community sponsorships that clients will notice can make a big difference.
Kelly says agents should identify the 20% of clients who produce 80% of their revenue, call them and make appointments, and arrive prepared. Be ready to discuss the coverages the client doesn’t have with the agent. Also, “I would have relationship conversations about what the expectations are, and I would ask for a referral. That would be it. Your best clients want to help you, but you have to give them a chance.”
Kelly says agents should replicate their best clients. “You’re gonna replicate something,” he says, “so what do you want it to be?” Marketing to existing clients and asking for referrals will provide the answer. It will also help ensure that they stay for a long time.