What is your companies most valuable asset? For many businesses, it’s their customers. In the insurance industry, customers have a very high lifetime value and new customers have a high acquisition cost. Those two facts make current customers tremendously valuable. Are you properly protecting this asset? This post focuses on implementing a retention campaign to protect your current customer base.
Isn’t Lowest Price the Best Customer Retention Program?
Many people think insurance is all about price. They’re right, but for the wrong reason. Insurance is NOT all about price. The issue is there isn’t a quality metric for insurance. Think about it. If there’s no way to measure quality, the only easy dimension to measure is price. Hence, it is all about price. There are no viable options.
Surprisingly, lowest price isn’t the best customer retention program. People make purchase decisions based on perceived value. Value is a combination of quality and price. Therefore, low price can’t be a best value if the quality is poor.
What Should Our Customer Retention Goal be?
How many of your customers die each year? Let’s roundup to a whole number and say it’s 1%. It’s not even close to that, but let’s make our retention goal easy. For carriers, 99% plus is the goal. For independent agents (IA’s) the goal is a little different. For IA’s the goal should be 99% retention with no re-marketing. Why no re-marketing? Re-marketing is a huge drag on profitability. And, isn’t what most of your customers want, even if it’s what they ask for. They want a good value. There we are, back to the quality metric.
Every business has customers they don’t want to keep. Get rid of those customers. We will measure undesired turnover. Think of the benefits of retaining 99% plus of the most desirable customers:
- Better P&L performance
- Higher growth rate
- Lower customer acquisition cost based on getting more referrals
How do we Implement a Customer Retention Campaign?
Creating a customer retention campaign is simple. ValChoice has automated the entire process. Here are the steps:
- Connect your AMS to ValChoice agent tools
- Navigate to “Marketing Automations” => “Renewals” and click “Create” a renewal
- Choose the carrier(s) for whom you want to send renewal campaigns to the policyholders
- Select the
- days in advance of renewal to send a notification
- whether or not you want to A/B test the results
- who the email is from
- Choose a start date
- Click “Save” and “Run”
That whole process takes only a few minutes. Now you have an email campaign that can run for a defined period of time or continuously. Your choice.
Below is an example of the rating the policyholder will receive.
For Carriers and Agents
The ValChoice retention program can be implemented by either carriers or agents. Carriers implementing a retention program can do it direct to the policyholder, or in partnership with the agent. The most effective approach is for the information to be sent by the party most recognized by the policyholder. ValChoice tools are easily configured to be used by either the carrier or the agent.
Easy Steps to Winning More Business
ValChoice offers a suite of tools for winning and retaining business in the insurance industry. To summarize these tools, ValChoice has written a series of articles identifying easy steps to win more business:
- Market overview – The Future of Insurance is Here
- 1st step – Brand Your Company and Win New Customers
- 2nd step – This is the post you just read
- 3rd step – Tell Your Company Story. Nobody Else Will.
A Solution Tailored to the Needs of the Best Companies and Their Agents
Changing the competitive dynamic of insurance away from price requires a high-quality, comprehensive, competitive analysis database. In 2013 ValChoice was founded for the specific purpose of building this system. The ValChoice database uses only high quality data collected by the insurance industry. User surveys and online reviews are never used due to inherent innaccuracy. Carriers use the competitive analysis in areas spanning from product planning, to marketing and advertising, channel management and customer retention. Agencies use the competitive analysis to win business away from other agencies and carriers, stop re-marketing and increase retention.