Today, winning a new customer is much more costly than retaining existing ones.
This reality is even more evident in the insurance industry, where the cost of acquisition sometimes exceeds the first year’s revenue.
When we talk about the cost of acquisition, we are not only referring to advertising and marketing expenses. If your company has not yet automated the essential processes to close insurance sales, such as quotations, exclusions management, documentation submission… The resources allocated to attract new customers often exceed the revenues of the first annuity, not resulting in profitable insurance sales. This explains the importance of retaining customers during the next renewals. In other words: loyalty.
But how do you satisfy and keep the customers of brokerages or insurance companies? There are several levers and loyalty techniques that, combined with the right technology, lead to increased profitability in the business.
What is customer loyalty?
Customer loyalty consists of the set of strategies, techniques and actions that a company carries out in order to retain already won customers, who decide to renew their policies thanks to the positive conditions and experiences they have had with the company.
Of course, retaining customers implies an effort at the sales, marketing and customer service team level; especially because this task must be focused on transforming, from a strategic point of view, customer loyalty into a natural insurance promotion channel.
Benefits of retaining insurance customers
Customer retention in insurance sales is what ensures that our company continues to grow. This requires: listening to their needs, differentiating ourselves from the competition, offering them what they really need and providing a better personalized service. This will not only help us to have a portfolio of satisfied customers, but also to attract new ones.
Save costs
As we mentioned at the beginning, the cost of building customer loyalty is cheaper than acquiring new customers. Investment in advertising, push calls, offers for new customers… all these efforts are significantly minimized if it is a user who is already part of our portfolio.
In addition, if retained customers refer us, we will acquire new conversions at no additional cost.
Although we have talked about the economic cost, we can also mention the human cost and the resources needed, such as the time dedicated to the tasks to be addressed. In the insurance sector it can take several months to close a sale with a client. For this reason, if you already have clients, you only need maintenance and cross-selling actions to make your portfolio even more profitable.
Weakens the competition
Your clients will have you as a reference, either because they perceive you as a better alternative than the rest or because they have already contracted one or more insurances with you and prefer to have all their insurances with the same company.
Facilitates cross-selling
As mentioned above, we enjoy the possibility of offering other insurances that complement your policies or others that protect you from risks that were not contemplated.
Cross-selling is the key to open the door to new business objectives, because:
It strengthens customer service.
It allows you to discover customer interests in greater depth.
Builds healthy business relationships.
For this type of action, it is essential to know the customer and offer him only what he needs. In this way, you will avoid over-saturation and the customer will feel really cared for. A good way to carry out this practice is by using fields that filter according to their work activity, gender, age, marital status…
Provides brand ambassadors
Normally, customers who repeat purchases in your company are satisfied, and once loyalty strategies are applied, you can get them to start recommending you.
In this way your reputation in the industry increases, and you can turn your customers into ambassadors of your brand who will speak well of your company in their circle.
Improve your reputation
As a brokerage or insurance company, by building long-term relationships with customers, we gain more and more information about them. This puts us in an advantageous position, improving our image and authority with respect to the competition, being able to launch highly personalized marketing strategies to sell insurance that multiply the probability of success.
Strategies to retain insurance clients
How can you retain customers in your insurance company?
There are certain techniques and loyalty strategies to differentiate yourself from the competition and offer novelties, improvements or advances that seduce the interest of your customers, both current and potential.
The implementation of a loyalty strategy to retain customers in your insurance company not only reorients you to study the needs of your customers, but also allows you to compete more efficiently, providing real value in the relationship generated between both parties.
Understanding this, we can take into consideration some of these techniques to retain customers:
Differentiate yourself from the competition
One of the best ways to attract the attention of customers is to clearly differentiate yourself from the competition, a strategy that can be carried out in several ways, such as:
Specialize in one type of products and services.
To offer an agile, reliable and secure service.
Customize the products offered.
Be more sociable by creating a community in RRSS.
Show Visibility and Credibility.
Create a need where it does not yet exist.
Implements business rules management systems (BRMS)
What is BRMS?
It is an automation system that manages business rules and decision logics. A BRMS software can distinguish between various business opportunities and, through associated rules, apply different solutions or actions.
What are the benefits of implementing BRMS in your insurance business?
It streamlines processes so that they flow in a faster and more automated way.
Improves process control, detecting failures in time that can be corrected quickly.
Helps in decision making and compliance with pre-established strategies.
Detects conflicting or incomplete rules.
Allows scaling the business by being able to serve more customers with less effort.
Ensures compliance with policies and regulations of the brokerage or insurance company.
Improves customer service, offering only available solutions for their specific case.
In short, it is an excellent support for decision making and compliance with corporate strategies.
Customize your offers and promotions
Segmenting your customers according to their buying habits helps you design marketing and loyalty campaigns, based on customer groups, depending on whether your goal is to increase retention, frequency or purchase value.
You must show the customer that you know them and that you offer them something really good that can satisfy them. The customer must feel that you invest time and resources in communicating with them in a personalized way, offering them an effective service tailored to their needs.
It is also useful to reactivate customers who have not purchased in a while, informing them of promotions based on the last products or services they quoted, or based on particular characteristics (profession, geographic location…). As long as you have a good database or CRM.
Rewarding customers
Loyalty programs, which are used to reward a user’s purchasing behavior in order to retain them and encourage them to make repeat purchases, are very important in this regard.
Some examples of customer rewards are:
Offer unique rewards, not just “free stuff”.
Today there are insurance companies looking to offer good experiences, sweepstakes and digital content as rewards. In other words, the rewards we are going to offer must be strategic. Make them personalized, not general.
Provide rewards with intrinsic value.
Customers know that not everything for free is effective. That’s why you should offer rewards that have intrinsic value to consumers.
You should provide rewards tailored to your buyer person, and offer them a gift that makes them feel that their loyalty is being rewarded in some way.
Remember that we talked in a previous post about how to define your buyer person.
Thank consumers before they make a purchase.
For example, your brokerage might discover a way to thank your users who have spent time on your website, mentioned you on Twitter or any social network, or participated in an online or real-world event.
This way you project to the outside world the appearance of a business that is loyal, responsive and polite to its customers.
Take advantage of the information you collect
Information is the basis for success in any business. Establish plans to keep you informed on a regular and constant basis of your customer’s satisfaction.
Keep in mind that databases are a perfect source to know the behavior of our customers. If we have a local or online brokerage, we will know what our company’s clients are interested in, in order to provide them with personalized advice thanks to the customer service and sales team. Knowing this, it is possible to target marketing strategies to make them work.
Some of the benefits we can obtain by taking advantage of the information provided by the customer are:
Allows to reduce investments in other less effective actions.
Gives rise to more effective discounts and promotions.
Provides business opportunities.
Increases loyalty.
Offers exclusive products and services
To achieve successful results with your professional services, a good strategy can be to focus on few and exclusive, high-value services that give you the possibility to become a reference within a specific niche.
Identifies those customers most likely to abscond
Detecting in time any symptom that indicates a possible loss of customers is decisive for the reaction margin of a business, since once they have switched to the competition, recovering them is quite complex and costly financially.
In addition, if we need to optimize resources, it can help us to know whether it is worthwhile or not to spend time with customers who are unlikely to sign up.
There are solutions such as AI and Machine learning software, which help us to collect customer data, measuring their satisfaction with the services provided, and interpreting the analysis performed, converting them into valuable information that helps us to understand more deeply the reality of our customers, to act in time before they abandon us to the competition.
This information is of vital importance to make tactical and strategic decisions in order to build customer loyalty, thus being a competitive advantage.
Careful attention to customer service
Customer service in your insurance brokerage has to be one of the most important factors to take care of. When customers seek to contact the company, they should feel comfortable and confident. Naturally, they should have an easy and accessible contact, thanks to a professional customer service team.
It is necessary to actively listen to customers and respond efficiently to their needs.
These are some of the functions most valued by customers
Loyalty. Loyal customers are the most important business asset.
Flexibility. Timing and deadlines are necessary for everything to run smoothly, and for customers to be satisfied. They must be carefully respected.
Communication. We must listen actively and assertively, we must create feedback with customers and make them feel heard and understood about their concerns.
Values. A company concerned with the environment, with the welfare of its employees and with inclusion, will have a more dedicated community.
Be honest and transparent
Communicating transparently and honestly is essential to build a brand image that inspires trust. Starting with the information on your website, and continuing with all the communications you make to your customers, whether through newsletters or social networks.
Failures to avoid in order not to lose customers in the insurance industry
There are certain mistakes that are more common than we think and that can negatively affect your insurance company, such as:
Poor customer service
Your services do not meet the expected expectations
Not showing the value of what you offer
Comparing or badmouthing the competition:
Not giving exclusivity to your clients
Conclusion on insurance industry loyalty
As we have seen, loyalty is fragile and must be earned continuously, with perseverance and effort. On the other hand, consumers are becoming more and more demanding in terms of their purchasing habits. As an insurance company, you have to take this into account and try to optimize your insurance sales in order not to lose market share to your competitors.
That is why we recommend you not to neglect communication and interaction with each of your customers, so that relationships are lasting and in a short time your policyholders become loyal ambassadors of your brand.
