How Insurance Agents Convert Loyalty into Revenue
Earlier this year the management consulting firm Bain & Company released a study regarding customer loyalty in the P&C and life insurance market. This research provides unique insight into how client relationships play an important role in carrier and agency revenue growth.
Great news for the insurance agent, as they are best positioned to develop strong personal relationships with clients. These relationships can translate directly into referrals and strong client retention – provided agents take a proactive approach at leveraging their best assets: loyal clients.
Define customer loyalty
So what’s customer loyalty, anyway? Harvard Business School defines it as customer behaviors, rather than attitudes. Collectively, it is interpreted as the three Rs: retention, repeat business, and referrals.
According to Bain, loyal clients “stay longer, buy more, recommend the company to friends and family, and usually cost less to serve”. The study spoke heavily of utilizing the Net Promoter Score survey to identify both loyal, and disgruntled clients – essentially determining their referral equity.
It is important to note that customer satisfaction is merely a precursor to customer loyalty. A client can be content with their agent and never refer them. Shifting gears to obtain those referrals takes a little extra effort on the agent’s behalf.
Ways to convert satisfaction into loyalty
The best way to convert satisfaction into loyalty is by communicating with clients regularly in personal, and meaningful ways. By regularly I mean outside of renewal and claims. Clients want to feel ongoing value, not only in the service an agent provides – but also in the relationship itself.
Relevant and original content in the form of newsletters is a good start. But personal handwritten loyalty cards go even further with building long-term clients. Consider identifying a group of clients and sending a note saying: “Thank you for being a loyal client. I truly value having you as part of the ABC Insurance family. If you have any questions about your existing policy or are considering any other types of coverage just give us a call or send a quick email.”
No strings attached. This will go a long way with establishing a solid relationship, referrals, and longevity with a client.
Earning goodwill is not enough
Furthermore, Bain notes: “While earning goodwill among customers is necessary, it is insufficient for generating superior revenue growth. Leaders must also motivate customers to actively promote the company.”
Keep in mind that referrals are not an automatic response to happy clients. Agents must also take steps to keep clients in the referral mindset, and subtly nudge them to recommend services to friends and family.
Agencies can accomplish this with language in welcome notes or loyalty cards that includes “If your friends and family ever have questions or need advice have them call me directly. I’ll take extra care”.
Again, insurance agents are best positioned to create an army of loyal clients. It is what they do with them that determines the impact on the bottom line.