I opened the book Relationship Aspect Marketing with some statistics that have withstood the test of time in relation to why businesses lose their clients:
- 1% will die
- 3% will move out of the area
- 5% will be lured away by other sales people
- 9% will be lured away by lower prices
- 14% will leave due to unresolved complaints
- 68% will leave because of indifference
In other words, more than two in three customers who leave you will do so because they feel that you don’t care - that you take them for granted. This sounds like personal relationships that wither over the years.
The sales culture in many organizations mimics the “hunter” mentality. Salespeople daily go out to hunt for new business - and this is a critical component in today’s economic situation. We need the new business to survive and prosper.
Historically, humankind eventually moved into agriculture.. It had become obvious that there were times when game was scarce or competitive tribes were beating others to the kill. As a result, humans began raising cattle and planting crops to augment what the hunters were able to bring home.
Selling is much the same. Our producers need to go out and hunt down new business, but we also have to focus on farming: nurturing clients for retention and cross-marketing our clients for additional services. Granted there’s some nurturing on the prospect development side as well - beating the bushes to drive forth the wildlife - but today I’d like to focus on nurturing our existing book of business.
An old Sanskrit proverb deals with the timeline of yesterday, today, and tomorrow. Sections of it read: “yesterday is but a dream, and tomorrow is only a vision; therefore, look well to this day.” If we were to paraphrase this in business terms, it might go, “Yesterday’s efforts will not ensure tomorrow’s clients; it’s what you do today that counts.”
What are you doing today to solidify and enhance your relationships with existing clients?
In the past, insurance producers dealt with individual decision makers. The owner or CEO of a company generally controlled who would get their insurance business. A producer could focus on the personal side of the relationship with occasional golf outings, luncheons, and dinners. If you kept the personal relationship, you kept the business.
Although this might still work for some smaller clients, larger businesses have become far more segmented and specialized. A large operation here in Branson recently partnered with another company in California to generate additional strength in battling the vicissitudes of our economy. Although senior management decisions remain in Branson, the insurance decisions now go to a risk management officer win the California offices of the new partner. The game has changed - which means that insurance providers must reinforce existing loyalties and establish new and critical relationships.
Game Changers
Other organizations have created risk management committees, turned over decisions to CFOs, and otherwise compartmentalized the insurance purchasing process. In this environment, e successful producer must maintain numerous relationships with many clients in order to maintain a solid level of client retention.
As businesses continue to bring more individuals into the process, some successful agencies are doing the same. Rather than relying on an individual producer-client relationship, these agencies use a team approach to the management of accounts. Such interaction at multiple levels can result in stronger relationships and a deeper understanding of the needs and concerns of your client, providing that team members are sharing information effectively with each other. This enables the agency to become more proactive in collaborating to solve problems and develop success strategies for their clients. Remember, as a professional, you’re far more than an insurance “peddler” - you’re a true partner with your clients.
Today might be a good time to assess how well you’re nurturing your client relationships. I’ve often said that if we put 50% of the energy expended in developing new clients into nurturing our existing ones, we would have the best of both worlds—high rates of new client acquisition, combined with excellent client retention.