Client Retention Requires a Plan

By | March 21, 2011

Never Take a New Insured’s Business for Granted

Client retention is a bellwether of a professional firm’s success. It indicates whether buyers value what the seller offers or if they simply buy once or twice for reasons of expediency.

In the agency business, retention ratios are a matter of constant concern to carriers and the agents who sell for them. Desirable ratios, which vary by line, are often 90 percent and higher. Lesser percentages are influenced by myriad factors, including inadequate producer pre-underwriting and poor client support from CSRs. Carriers can also impact these metrics with uncompetitive premiums and harsh renewal restrictions. Causes beyond either party’s control include fallout from the down economy, most notably business closings and cutbacks, home foreclosures, and transient populations. Still, the actual retention numbers themselves aren’t as significant as how agents respond to them. Some disregard them entirely as long as their carriers remain on board. Others refuse to make any client selection or operational changes at all, preferring instead to bring in new sales to maintain revenues. Still others are willing to take the steps needed to maximize policy retention, not merely to quell their carriers, but also to satisfy themselves.

Retention Takes Action

The actions that agencies take differ by line and account size, yet there are still some constants. These include sending exit surveys to former insureds to learn the causes of their defection and then take corrective internal actions. It’s also common to introduce new insureds to their agency team in person or via welcome letters, videos, and social media Ð along with with various nurturing communications. But, nothing is more potent for keeping a new client on the books than developing and following through with a retention game plan. Do it for each commercial client you wish to retain.

Retention Game Plan

As in sports, business-based game plans are most effective when developed prior to the event rather than attempted at halftime. So, always endeavor to create yours as early on as possible. Start by making some basic assumptions including identifying the buyer’s personality and insurance philosophy based on your pre-sale impressions. Then once the sale is closed, decide upon which immediate post-sale actions to enact, when to cross-sell/upsell any unsold coverages, and how to make future client contacts.

Basic assumptions. Determine the contact person’s buyer personality and core philosophy towards insurance. These subjective “facts” influence your decisions of what to do and how often to do it.

Immediate post-sale actions. Decide what to do immediately after getting the go-ahead to write newly quoted policies. Your options range from a simple thank you note to preparing a schedule of future service activities, sending a post-sale survey, introducing the newbie to key personnel, etc. Another consideration is how professionally you package and deliver the freshly sold policies. A client’s first impression of this expensive tangible has important long-term implications. Also, interview new, satisfied insureds for your e-newsletter, video blog, Facebook page, or Web site Ð or request a written recommendation on LinkedIn. These public testimonials, obtained soon after the first sale, make it more awkward for the business to non-renew.

Cross-sell – upsell targets. As every insurance pro knows, the more policies you write for an insured, the greater the odds of retention. Address this key issue as part of your plan. Prepare a detailed plan (complete with timeline) for soliciting the specific policies and endorsements you seek to add. Then act to supplement the policies you now write.

Future client contact. Tailor each contact method to your knowledge of the business and to the client. For instance, if you know that key insureds are active in an industry trade association, participate in that group’s events and publications, when permitted. If the firms are fond of a particular non-profit organization, inquire about joint sponsorships. Supplement these and other custom communications with generic ones such as Facebook postings, tweets, LinkedIn updates, e-newsletters, blogs, and e-mails.

Topics NonProfits

About Alan L. Shulman

Alan Shulman, CPCU, is the publisher of Agency Ideas® sales and marketing newsletter (free basic subscription at He is also the author of “500 Sales Ideas for Commercial Lines Producers” among many other P&C sales resources. Email: Website: More from Alan L. Shulman

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Insurance Journal West March 21, 2011
March 21, 2011
Insurance Journal West Magazine

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