The more products and services your clients buy from you, the closer your relationship with them. In this document, Lynn Thomas discusses seven proven strategies for using cross-sales to boot your retention rate -- and bottom line.
Most agents want their clients, especially their most profitable ones, to be so tied to their agency, so involved, that moving business to another agency would consume a lot of time and effort and produce a multitude of problems and headaches.
Therefore, as an agent, your goal is to cross-serve clients so well that you create multiple exit barriers, deterring them from ever leaving your agency. The way to create these barriers is simple: The more products and services your clients buy from you, the more difficult it will be for them to create a similar relationship with someone else.
People have less free time today than five years ago. Your clients don’t want to spend their precious, shrinking free time searching for another agency. The more effectively you cross-sell, the more time is on your side.
It’s known in the banking industry that if a customer has seven products with a bank, they will almost never leave, no matter what occurs. In the insurance industry, the number is between five and seven. So why don’t most clients buy five to seven products or services from a single agency? Here are three reasons:
-
Most agents don’t know about the power of cross selling and the way that it increases profits.
-
Many salespeople aren’t aware that cross selling is a powerful retention tool. Once you’ve met your clients’ needs on repeated occasions, they won’t even think of leaving.
-
Plain human habit. Most agents see themselves as the hunter, constantly looking for that new big client. They’re accustomed to the adrenaline rush of turning a total stranger into a client. Is this you?
The insurance industry reinforces this behavior by measuring new business more diligently than it does cross-selling, referrals, or even revenue per client. Yet these latter three factors reflect your agency’s financial situation more accurately.
The “new business” focus is reinforced by Americans’ unquenchable fascination with the new sale and the new client — even at the expense of profitability and higher retention rates. This ingrained pattern is neither logical nor economically sound.
The good news is that we can form new habits. The not-so-good news is that the old habits don’t disappear from lack of use. Our old selling strategies can be powerful habits to break, but the rewards for those who have the determination and perseverance to do so are limitless.
Here are seven new strategies that will produce more cross-sales:
-
The first step starts with you. Be honest with yourself. Do you really want to take this road? Do you feel the fire in your belly? Is it your burning desire to adopt an easier, more profitable way to do business? Don’t fake it — you’ll fail! You have to want to change your habits to benefit yourself and your client.
-
Establish a firm rule that your agency will not accept any monoline clients. Period. Monoline clients eat up your time and are unprofitable to keep on the books. They’re not part of your road to more growth and profits.
-
Review your reward system. If it doesn’t provide substantial rewards for all employees to cross-sell, change it.
-
Track cross-sales at a visible location in your agency. Ask employees for ideas on fun ways to celebrate when one of them makes a cross-sale. Select the most fun and outrageous ones. The more celebrations, the more momentum there is to keep everyone on the new groove of cross-selling.
-
Create a method to capture your clients’ service preferences (for example, calling them between 7:00 a.m. and 9:00 a.m., before business starts). Awareness of these preferences allows you to provide customized service, which usually “wows” a client — and it’s easier to turn a wowed client into a cross-sale than any other type.
-
Create opportunities to contact your most profitable clients proactively to provide them with value-added services. Create an annual relationship management plan for each client, and follow it. Show the plan to them. Ask for their input. How could it be improved? How can you “wow” them? Have they had an annual review? Do they want one? Do they need loss control? Could a captive reduce their premiums? Bring more and more of these value-added services to the table proactively, and soon your clients will perceive you as an advisor, someone they trust, who’s looking out for their insurance needs. They’ll no longer view you merely as the dispenser of a product.
-
Based on my experience with hundreds of agencies, 80% of your current clients aren’t familiar with all of your products and services. Don’t keep them a secret! Take a lesson from the banking industry: Market your products and services to your clients regularly.
Create a marketing plan and stick with it. Time is the test. Repetition is the key. Be innovative and outrageous. Your marketing material doesn’t have to look like it came from an insurance agency. Make it colorful, fun, entertaining, eye-catching, and easy to respond to.
CONCLUSION
You now have the basics of cross-selling. Remember, this is not a one-day, one-week, or one-month effort. It’s a long-term commitment to be the best agent for your clients -- which, not coincidentally, also means being the best agent for your agency. Cross-selling is about creating a win-win situation. You want to have many threads connecting you to your clients, each thread representing a product or service. You can’t have too many. You want to create thick intertwined ropes from these threads. Your clients will never leave because the costs of severing those ropes will far exceed the benefits of working through any problems with your agency.
Be forewarned, though: You must stay proactive. Remain on top of your cross-selling program. Gone are the days when you could be reactive and still grow a profitable agency. Relationships today need value-added services. Retention tools are the name of the game for winning.