When will your customers go from lazy to leaving? (Here’s how you can make them go from lazy to loyal)
I recently had the greatest conversation with Kitty Ambers, CEO of NetVU. (It’s part of our Connected Insurance Podcast. When we publish it, you must listen to it. She’s in my Brokers-Best-Friend Department. We’re releasing it March 1. It’s not one you can miss.)
She was extolling one of the great virtues of the broker channel. That no matter how much customers get abused, ignored and neglected, we can count on 85% to come back.
Why is customer retention so high in the broker channel – compared to other industries?
- Inertia. It’s easy to stay.
- Pain avoidance. It’s (at least a little) hard to leave. If you know your broker, it’s painful to fire them. It’s embarrassing to run into them at the grocery, etc. At a minimum, it’s a hassle.
- The grass ain’t greener. Trust levels in the insurance industry are low. Expectations for ‘customer delight’ are low. To some consumers, ‘it’s just not worth the effort to end up back in the same damn situation I’m in now.’
85% retention is lousy. But, if that’s your number, you still can’t assume that 85% are loyal.
They may just be lazy.
As a quick aside, one of the reasons I obsess about retention is that a strategic approach to retention is among the biggest game-changers in the industry.
For example, bump that paltry 85% retention by 5 points, and you’ll earn another $1,310,849 for every million dollars in income in the next ten years.
Get it up to 95%, where it belongs, and you’ll earn another $3,072,953.
Really, an extra 3 mil just by earning loyalty?
That’s just the beginning. Loyal customers don’t just stay longer.
They buy more insurance.
And they refer more friends.
The Brilliant Broker manages their book of business for loyalty. Because loyalty creates much, much higher Customer Lifetime Value.
6 serious reasons you can’t ignore your customers in 2017
- 86% of insurance consumers are not ‘very satisfied’ with the outbound communications they get from their provider. In other words, they’re vulnerable.
- A stunning 44% report that they have had ZERO interactions with their provider in the last 18 months. Very vulnerable.
- Sam Friedman, Deloitte’s Chief Insurance Researcher reported that, ‘…six in 10 of those we most recently surveyed say they receive no particular service from their agents beyond shopping for coverage.’ We can do better!
- Very smart people are dreaming of ways to take your customers. And you’ve never heard of them. CB Insights reported on 173 venture capital investments in the huge and emerging ‘insurtech’ industry. Those startups grabbed $1.7 billion in new money. Most of those startups are not your friends
- Ellen Carney, Principal Insurance Analysts for Forrester, stated that, ‘There are 40,000 agencies in the U.S., and you could absolutely imagine them shrinking by a quarter.’ Why? Read the bullets above. (An insiders view of what the ‘big consulting firms are telling their insurance carrier clients: don’t wait for brokers to fix the gap between the industry and its customers. Here’s an exact quote from EYS report on their customer survey: ‘Be ruthless with brokers who are damaging the long-term economics of your business.” MY advice to brokers. Fix that gap before you no longer own your own customers!) NOTE: I’m releasing my podcast interview with Ellen Carney on March 29th. It’s imperative you listen to that conversation. She’s scary smart, believes in the value of the broker channel – and like me, she’s not afraid to tell the truth.)
- Several startups from the emerging digital channel are already selling insurance. Lemonade grabbed headlines a week or two ago when they closed a claim in three seconds. (Sure, they have their critics and doubters. Articles about Lemonade generate more comments in Insurance Journal than anything I’ve seen in years.) They don’t just have money. They have smart money. Google money. Sequoia money.
One way or another, your customers will have more choices. It’s my job to help you make sure that they keep choosing you.
Here’s how you can do it.
Talk to them. And add value when you do.
It’s that easy.
But, what do you say?
And how do you get their attention?
First of all, brokers must come to grips with a reality. Even though you may walk through your office and hear phone calls all day long, most of your customers don’t feel relationship with you. (Review the numbers above.)
The great majority of customer-to-broker conversations are initiated by the customer. In other words, the broker is passive.
And, absent issues with their insurance, the customer is just not calling. Your silent majority are busy, living their life…mostly getting nothing.
Like Sam Friedman said, they think the agent disappears after they get paid.
Three Powerful Changes Brokers Must Make in Their Client Communications
- Go from passive to active. Any serious business owner wants to be in control of their customer relationships and their customer journey. The more passive you are in your communication plan – if such a thing exists – the more likely you’ll customers will be drawn to a provider that shows they care.
- Go from one-to-one to one-to-many. Old school communications were usually one person at a time. It’s slow. Expensive. And it won’t get the job done.
- Go from missing-in-action to meaningful. Like the marriage counselor might say, ‘no communication, no relationship.’ Stuff down the temptation to simply communicate so you can sell more. Selling will come. First, give value.
9 conversations you must have with your customers in 2017
I started with a list of 33. Edited that list ruthlessly. Here are nine. Each with a one sentence description.
- ‘You’re a new lead. Here’s what you should know about us.’ If they’re a new lead – and they’re not a referral – there’s a better than even chance you’re up against two or three competitors. Why should they choose you? Tell ‘em.
- ‘You’re a new customer. Here’s what you should know.’ Retention starts here, on day one. Make them feel at home, like they just wok up in the greatest agency on earth. Like they made a great decision. And banish buyer’s remorse forever.
- ‘You just opened a claim. I’m sorry to hear that.’ Let them know, if they need an advocate, you’re their friend. This is where we shine.
- ‘You just closed a claim. Share your experience, please.’ Let them know you care. And that you’d like to share it with your carrier.
- ‘You’re approaching your renewal. Let’s make sure you have the protection you need.’ This is cross-sell heaven and renewal paradise.
- ‘I’m worried about your coverage.’ Because they don’t have all their policies coordinated with you. (EY reports that 81% of insurance consumers report a ‘positive moment of truth’ from talking about a new type of insurance. Cross sell your customers. They like it!)
- ‘We’re investing in our relationship. You’ll hear from us a bit more.’ (Of course, if you’re not investing in the relationship, move on. This blog may not be for you.)
- ‘I just want to say thank you.’ Ask for nothing. Give your heart. Once a year.
- ‘You need to prepare for this coming hurricane/storm/ice/wildfire – or whatever disaster hits your area.’ Because that’s our job. To protect people.
That’s nine. There are many, many more that our clients share with me. Or that we share with them. Generate referrals. Get Google Reviews. Say happy birthday. Monthly newsletters. And on and on.
In their report on customer relations, EY summed up their core finding neatly:
“Consumers want more frequent, meaningful and personalized communications.”
They also said:
“As consumers embrace digital, insurers must rethink their distribution strategies and partner relationships.”
Don’t let them ‘rethink’ you. Brokers have historically been the closest to the customer. But those relationships have become dangerously vulnerable.
The solution is simple. As I said, above, go from:
- Passive to active. Be in charge of your customer relationships. Not victim.
- One-to-one to one-to-many. Stop leaving so many customers out of your communication stream. Modern technology can do this for you.
- Missing in action to Add value. It’s the fastest route to loyalty.
And there’s one more. From:
- Impossible to automatic. Of course, you want to do more Account Reviews. More cross selling. More nurturing. More just saying ‘thank you.’ The old school way died 10-20 years ago. That’s why it’s not happening. That’s why carriers are stepping in. That’s why startups are attracting a ton of money.
Absent technology – a communication platform that integrates with your agency or broker management system, it simply cannot happen.
Those customers will end up somewhere. The tools for the broker channel to thrive already exist.
They simply need to matched with the commitment to keep and serve the customer, and the passion to build a business.