The longer you retain a client, the more profitable that client becomes. That’s why even a marginal shift in overall client retention can have a significant impact on a company’s bottom line. In fact, reducing your customer defection rate by 5% can increase profitability by 25% or more.
So choose which of the following will work best and then combine them into a dynamic and integrated plan to boost ongoing profitability:
- Cross sell more
It’s logical that the more policies a client has with you, the more embedded they are with your company, and the less likely they are to move.
- Annual coverage reviews
Most brokers agree that this is a valuable use of their resources. What usually holds them back is allocating the time, developing a process, and following through.
Make it easy on yourself and start with doing just one coverage review a week, then build up from there. And remember that even if they decline your offer, they’ll still appreciate the gesture and won’t be able to use, “I never hear from my broker.” as an excuse to shop around.
- Warn them if costs are going up
Don’t use either the ‘head in the sand’ or ‘let sleeping dogs lie’ strategy. If you know a client is going to receive a price increase, be proactive about it.
When you speak to them, orient your conversation around what is causing the increase and what can be done to try and offset it. If you’re open and honest, most clients will appreciate the ‘heads up’. This also gives you the opportunity to change or amend their cover and/or identify any discounts to reduce the effect.
- Set up automatic payments
Clients paying by direct debit renew their policies at a much higher rate.
- Pre-renewal phone call
Agree whether this is cost effective, and if it is, call your clients before the renewal to thank them for their continued loyalty and offer to answer any questions they may have.
- Educate clients on the value you deliver
Brokers deliver a range of important benefits to clients. The more they’re aware of these, the less they’ll be interested in shopping around for a better price.
- Be even more client focused
Understand what’s important to your customers and get better at delivering it. Notice that ‘price’ and ‘cost’ hardly feature, so consider directing your resources on further improving customer services and delivering more value.
- Stop them before they leave
Be more proactive in identifying and resolving client issues before customers start looking elsewhere. Here’s some guidance on how to do this.
- Have more customer contacts
Perceived indifference (not price) is the main reason why up to 68% of clients take their business elsewhere. The more they hear from you throughout the year, the more they’ll feel there’s a connection, and the less likely they are to shop around.
The key to multiple touches is to vary the method and make sure you’re always bringing value.
Here’s some ideas if you need them: emails, phone calls, newsletters, postcards, seminars, policy reviews, Christmas cards, birthday cards, text messages, surveys, handwritten thank you letters or cards, webinars, community events, recommendations, google reviews…
- Be friendly
Clients who see you as a friendly face, or voice, are going to be more loyal.
- Better retention, more referrals, more sales
Every single thing you do to improve retention will improve the relationship, and make your customers more likely to refer you.
- More advocates, more referrals, better loyalty
Just by making your business more referable, you’ll make it more client focused, and therefore more attractive to your existing clients, plus as clients actively recommend you, they’ll naturally become more committed and less likely to move.
- Random acts of kindness
If you do something unexpected and nice for someone, there’s a better chance that they’ll do something nice for you (like renew their policy); in Psychology it’s called reciprocal altruism. Why not brainstorm some ideas of what you might do.
- Say ‘thank you’ more
Two simple words that act as powerful client loyalty tools.
- Invest more resources in your customer claims service
Experiences vary. Some brokers find that customers who’ve had a claim in the last policy period are less likely to renew (usually because they’ve had a frustrating experience). Other brokers find that they are a great source of referrals. In each case there's a business opportunity if you want it.
- Attract the most profitable clients
What do your ‘loyal clients’ look like? Are they from a particular demographic, segment or niche? When you next plan a recruitment drive, consider specifically targeting people who are more likely to stay with you for longer and deliver a more profitable lifetime value.
- Connect via social media
Clients who have connected with you on, say, Facebook or LinkedIn are less likely to move to a competitor.
- Make someone responsible for retention
When everyone is equally responsible for retention, no one is. Consider putting someone in charge and paying them to deliver better results. Also work out how to motivate your staff to get behind your retention campaign.
- Run an annual customer survey
When you ask clients for feedback about your business it accomplishes a lot of things:
- It gives unhappy clients a chance to show their unhappiness with words instead of actions.
- It shows clients how committed you are to keeping them happy.
- It reinforces positive thoughts about your business.
- It’s another touch point that helps to build and maintain a positive relationship.
- Don’t burn your bridges
When a client moves to a competitor make sure that it’s as pleasant an experience as possible. In this business the grass is not always as green as it looks, and if you keep in touch there’s a very good chance of winning them back at a later date.