The quest for turning a customer from an indifferent client to a loyal one has a true bottom dollar value. A so-called “loyal” customer delivers seven times its lifetime value to an insurance broker, according to research from Bain Consulting.
“Once you know that from an agent’s strategic perspective, life is never the same again,” said Michael Jans, founder and CEO or Agency Revolution, in a recent webinar aimed at insurance brokers and executives. Jans is the author of The P&C Marketing Bible, The CSR Money Bible and The Agent’s Road Map.
For a small investment in making a customer truly loyal, the ROI is, in the words of Jans, “huge.”
Simply put, a customer rated as “loyal” will spend more money with an insurance broker. “If an insurance broker can move a customer from a low level of loyalty to a higher level, the broker can score more from their client,” said Jans.
This is the one of the key findings of Jans’ in a recent webinar entitled, Why the Money Is the Relationship. He explained that although lead generation is important, increasing customer loyalty can pay more down the road.
According to Bain’s research on insurance company loyalty, Jans cited that highly loyal insurance client renews at a rate of 97%. He also cited findings that so-called “neutral” loyalty client renews at 84% and the low loyalty clients renews at 73%.
“Most agents have a mix of these clients but we discovered that that mix they can be fixed,” said Jans.
Jans described the lifecycle of lending a new client as a series of interactions. The client typically starts by asking for a quote and this allows the brokers to focus on forming a bond with the client. “First they ask for a quote. We put a lot of energy into courting them and we say anytime [they] call, we say we will guide them.”
He added, “If you can get that guy to be a loyal customer, that guy is worth a lot of money to you.”
Low loyalty clients are not to be written off, Jans added. “Those relationships need to be healed first so they become eventually high-loyalty client, and the moderate loyalty clients have to be elevated to high-loyalty clients,” said Jans. “For the high-loyalty clients, they are waiting to be asked if they are ready to spend more money.”
He added, “They have to be asked.”
Don’t overlook email
Jans said that email has finally come of age as a platform for reaching out to new and established clients. “I would say email is now working for insurance agents. Marketing automation is the fastest growing category of software in North America. It has been around for a long time,” said Jans.
Also see: “How to avoid telemedicine’s legal gotchas.”
Traditionally, the contact resource management data has been locked in the brokerage’s agency management system. This often created what Jans called “disconnected verticals that cannot market effectively.” He added, “Very recently, some elegant integration of marketing brokerage agency information [has been introduced] that now allows the information to work effectively.”
Now, if a broker has a new lead, they can unlock information and deliver “a valuable experience to the customer,” said Jans. “And that is what they expect. They say “I will reward you if you earn a relationship with me.” Now we can earn that relationship.”
Jans added that novice marketers believe that marketing is how much that can get from the client. “Advanced marketers realize that the most effective marketing is about “how much can I give so that I have earned the right to have a relationship with people where if I lead you to more coverage and better protection?” said Jans.
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