The higher your agency’s referral and renewal rate, the stronger your bottom line. In this document, Pres Diamond recommends a two-step process for helping grow renewals and referrals.
We all grew up learning our ABCs. There are 26 letters to the alphabet, but to insurance producers, only two letters really matter: C and R.
The “C” relates to new and renewal business. It stands for CEO, COO, CFO, and other chiefs. Address your marketing to the “C” person. When you’re prospecting, focus on the C person. When you do your research, find out all you can about this person. By focusing myopically on them, you’ll win more accounts than you lose.
The “R” zeroes in on agency profitability. It stands for retention, renewals, and referrals. This is your agency’s value. When we all seem to know that it costs five to ten times more to get a new client than keep an existing one, why do we market for new business before marketing to our own clients, either to round out accounts or take the clients’ pulse?
About 80% of our income comes from renewals, so don’t become complacent about any account. Market to your existing clients at least as much as you market to prospects. Work just as hard to keep them happy as you would to land a new prospect. As Scott Cook, founder of Intuit, says, “If you can’t please your current customers, you don’t deserve new ones.”
The Loyalty Effect, the Hidden Force Behind Growth, Profits, and Lasting Value, by Frederick F. Reichheld, reviews various insurers and brokers and concludes that profits are driven by client and employee loyalty — that is, by retention of key people and clients. Retention leads to referrals. Most producers agree that it’s easier to get in to see a referral; your credentials have already been established. It’s easier to sell a referral, and those who buy stay longer and give you more chances when you err. Referrals also have a lower acquisition cost than other types of business.
Yet how many agencies have an agency retention plan that all employees know and consider mandatory? How many have a mandatory referral process etched on each employee’s mind?
GETTING ON THE RETENTION TRACK
If retention and referrals are your agency’s lifeblood, designate a person to act as director of retention — the “client keeper” — no matter what the size of your agency. This person’s task should be to make sure that your renewal process is solid and followed by acting as the “let’s get referrals” taskmaster.
Now run your renewal list for the next 12 months, not just the next 90 or 120 days, to organize your internal workload. You must know your workload for the year so that you can schedule your best accounts for the 12-month service they deserve. Can you move renewals to another effective date? Why does the same account appear on so many renewal lists? What does this client think of having so many different renewal dates?
Your renewal list should reflect the entire client total premium and commission, not just policies renewing for the month. When you see the value of each client on your renewal list, along with all their policies, you can determine the rounding possibilities without having to wade through a file.
Once you’ve organized your workflow based on client renewal dates, commit to deliver all renewals, no matter the size of your client, for the next 12 months. Use a checklist for all the policies your client might buy, including Life, Disability, Legal, your client’s Personal Lines, Personal Lines for their employees, and referrals. Put a checkmark in the box opposite the policies you provide for each client. Any blank box is an opportunity for discussion.
On site, hand your client a copy of this checklist and review the entire list of potential policies. Don’t forget to include a column to capture at least three referrals.
Consider getting a new producer to personally deliver all policies to non-A accounts. This person would get the checklist completed and gather referrals. Now you have a new producer with an instant payback! This person needs only to know enough to admit that they don’t know the answer to all questions — but that they’ll find out. Another option would be to hire a retired insurance person for this task.
TWO NEW STEPS FOR YOUR STAFF
Now comes training. Each person in your agency should add two steps to their everyday work. Yes, more tasks — but the learning takes two minutes, and the task will reduce work and pressure.
First, have agency personnel (CSRs and producers) ask every client, “Would you grade me and the service you receive from my agency? Do we deserve an A, B, C, D, or F?” Don’t have them ask any long questions or have the client answer survey questions. You’ll get all the information you need from their answer.
Each CSR should get one grade per week from a client, and each producer should get two.
If you receive an A rating from a client you have an automatic invitation to ask them for referrals (after you state that you fully intend to keep that “A” come next year). If you receive anything but an A, find out why and what steps you must take to earn an A next year. You’ve just helped the client release some steam, and saved them for at least one more year. Don’t think that a B is OK: the only acceptable grade is an A!
The other task is for everyone in your agency is to call one client a day to say, “Thanks for insuring with us. You know, we just don’t take enough time in this hurried world to say ‘thanks.’ I hope everything is going smoothly with your insurance. If not, is there something I can do?” If your client isn’t in, or doesn’t answer, your call still counts. This simple call will wow your clients, show you care about them, and obligate them more deeply to you. Be sure to note your comments on the proper menu in your agency management system.
To recap:
- Designate a director of retention.
- Organize workflow based on renewal dates.
- Deliver all renewals in person.
- Every week, have each CSR get a grade from one client, and each producer get two.
- Have every agency person except the receptionist make one “thank-you” call daily.
CONCLUSION
Sure price counts. But an agent who makes it easy for the client and demonstrates care for the client is usually the agent who wins and keeps the account. Make it easy for your clients to stay with you. Work renewals harder than anything else you do. When you do, your retention will increase and you’ll start to receive an endless stream of referrals.