As retention must be your no.1 priority, please use the simple tactics below to make your plan more effective.
What you already know
- An increase in year-on-year sales is inextricably linked to an increase in client retention.
- Recruiting a new customer costs at least five times* what it costs to keep an existing one.
What you might not know
- Retention acts as a powerful new business tool because loyal customers are much more likely to refer you.
- And it works in reverse. The more your clients refer you, the more loyal they become to your business, and the more likely they are to renew.
- A 5% increase in customer retention produces at least a 25% increase in profits*. Why, because return customers tend to consolidate their insurance business with you over time, and as they do, your operating costs to serve them decline.
Your action points
- Include some of these simple tactics in your retention strategy.
- Give someone overall responsibility for implementing the plan. If everyone is equally responsible for retention then no one is.
- Include a ‘recognise and reward’ programme to maintain momentum throughout the year.
* Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. It makes sense: you don’t have to spend time and resources going out and finding a new client — you just have to keep the one you have happy. If you’re not convinced that retaining customers is so valuable, consider research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) that shows increasing customer retention rates by 5% increases profits by 25% to 95%.