How to Create a Client Retention Culture

Insurance agency owners are always looking for ways to generate more income and grow their business. This typically involves spending a lot of time, effort and money on marketing and selling to new prospects. As acquisition brokers and consultants to insurance agents, we frequently discuss the value of a true sales culture and help agencies create such cultures through goal setting, standardizing quote scripts, measuring every aspect of the sales process, and diversifying sources of income with additional lines and products.

However, what many agency owners fail to realize is that the real growth in their agencies won’t come just from creating a new business sales culture, but also from creating a client retention culture.

For decades textbooks and seminars have pointed out how costly it is to attract a new customer versus keeping an existing customer. But insurance agencies almost always focus on new business and ignore the fact that their real money is coming from their existing book.

There is only one way to increase revenue and that is to grow the total number of clients. Yet, most agencies barely write enough new business every month to replace what they lost. So at best, they are maintaining the same revenue they always had, with no growth.

Agency owners typically only attack one side of this problem: the sales side. Why not also look at the other side and try to answer the question, “Why are we losing so many existing clients?”

The answer is because client retention is hard. Let’s face it, the chase and excitement of quoting and closing a new deal is what keeps producers walking into the office each morning. The rush of adrenaline when the prospect says “okay, let’s do it” and then the feeling when the down payment hits the bank account…there’s nothing like it.

Is that the feeling after helping a long-time client change their mailing address in a polite and timely manner? No. Is that the feeling when answering every service phone call in a professional manner and patiently responding to every question asked even though the answers have already been explained several times? No, of course not.

But those mundane things, handled the right way, help create a retention culture and keep existing clients on an agency’s books.

Friendly, fast, consistent service is just the beginning of the creation of a retention culture. Agents need to reach out and stay in communication with their clients, the perfect time being at renewal. But the fact is that agencies don’t do a very good job keeping in touch with their clients, especially in a direct bill situation. Ask 10 friends to name their insurance agent in less than 5-seconds. Maybe one knows. Why? Because after their policy was written, they didn’t hear from their agent again.

Clients who haven’t heard from the agency since their original policy was written have no agency loyalty. So the next time they see that TV commercial to “Call the General” or hear on the radio, “$20 a month, no down payment,” why wouldn’t they look into it if they don’t even remember who their current agent is?

Growing an agency doesn’t just mean impressing new clients. Spending an equal amount of time satisfying existing clients who have already been impressed once—that’s building a retention culture.

Topics Agencies Leadership