4 Steps to fast reliable growth for insurance agents & brokers

Here is a simple 4 Step business exercise to guide your agency or brokerage through the most reliable growth strategy. I’ve used this system with hundreds of clients throughout North America. The general reaction has been, “Oh! Now that I look at it that way, this is way easier than what I was doing before.”

It is, admittedly, counter-intuitive to the knee-jerk, wrong-headed and obstinate industry proclivity that says, “In order to grow, I need more leads! Leads, leads, leads!” Humbug. Not when the floor of your agency is littered with gold coins. Of course, leads matter. Conversion matters. But, unless your shop is new and tiny, the “acre of diamonds” is in your backyard. It’s in your book.

Step One. Describe your ideal client in these terms

  1. # of policies.
  2. # of referrals/year.
  3. Retention %.

Example: “My ideal client has three policies. Gives me .5 referrals per year. They retain at 95%.”

Step Two: Describe your average client in the same terms.

Example: “My average client has 1.8 policies per customer. If I add up all the referrals I got in the last 12 months and divided by the number of customers I have, my average customer gives me .1 referrals per year. And my retention is 89%.”

Step Three. Subtract Step Two from Step One. Using the example above, the gap is:

  1. 1.2 policies per customer
  2. .4 referrals
  3. 6% of retention

Loyalty is important for insurance agencies & brokerages

Here’s the secret sauce: Bain’s research on the Highly Loyal Insurance Client reveals that your most loyal clients – “promoters:”

  • Have 25% more insurance and place more with one provider
  • Give .63 referrals per year(!)
  • Renew at 97%

They deliver seven times the lifetime value of your high churn low loyalty client. The research also demonstrated that it’s easier to move “neutral” clients to become Highly Loyal Clients than it is to move low loyalty clients.

Step Four: Recognize the massive business value of loyalty. Design and align your internal systems to strategically move every possible client to a high loyalty position.

How? Easy. Communicate frequently. Always give value. And direct your communications to guide your customer to deeper and better protection. Recognize that your business interests and the interests of the client who values peace of mind align perfectly. They want to be protected. They want confidence. They want a relationship they can trust. And if you deliver on those things, you will be richly rewarded by your customers. With more policies. More referrals. Higher retention. And faster growth.


By the way, if you want to “run your own numbers” and see what a few tweaks in revenue per customer and retention will mean to your income, you can do that here.

One last thing. This is a unique but economically proven approach to insurance marketing. I still love leads. I still love converting leads to new customers. But, when you run a business, growth is the result of good strategy. Stop throwing new customers into a leaky bucket.

Another way to look at this exercise is to see the difference in policy count as the gap in your promise to your customer. If they’re not properly protected unless they have, let’s say, three policies, and they have 1.8, your firm has a 1.2 failure rate. It’s no wonder this industry has the low public opinion and low customer trust we’ve learned to take for granted. It’s not because of an ungrateful public. Trust and loyalty are earned.  If the promise is to protect – not just quote and sell when the consumer asks us to – we’ve broken the promise.

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