Most agencies are automated, some even using their second or third generation of automation. Many agencies load their policy data into the system, interface with their carriers and rarely access their paper files. Few agencies, however, are taking advantage of a well-managed client database. Gathering meaningful data that you can regularly manipulate is the key to successful database management.
Let's assume you have an agency management system (and if you lack one, get one!). Once, you have downloaded or entered all your client and policy data, the ongoing management of the information can begin. Rather than using your computer as a glorified Rolodex, why not take advantage of the money and power available in your system? This article focuses on four advantages of managing and exploiting your client database.
First, use your client database to cross-sell. For years, industry consultants have been talking about the importance of cross-selling, so it's not a new idea. However, it remains an idea that can quickly make you money. Evaluate your client database for all your single policyholders and generate a campaign to cross-sell at least one additional policy to these folks. Determine which customers are carrying minimum coverages and create a campaign to upgrade them. When you have a new appointment with a carrier for a special program, select all your customers in the niche and announce the new program to them. By the way, while you're cross-selling, you can also request referrals by asking for the names of three associates who might require your services.
Second, use your client database to improve your customer service image. Too many clients hear from their agencies only when it's about money-an invoice, a rate increase, or a claim. Instead, you can use the information in your database to contact your customers proactively. For example, in some areas of Southern California, clients appreciate earthquake preparation tips or suggestions for rating appropriate Flood insurance. In another instance, you might notice claims reports portraying a high incidence of carjacking in certain zip codes. Prepare a newsletter for your clients in those areas advising ways to avoid carjackers and what to do in case of a car jacking. These positive contacts confirm your value as an independent agent and solidify your relationships with your clients.
A third advantage of managing your client database is the automated tracking of your submissions. Often company representatives visit to ask you for more business or different business, but they never write what you submit. Or a company will not renew your appointment because you haven't given them the type of business it wants. How many times do you know you've submitted many qualified appointments, but can't prove it? With up-to-date information, your computer enables you to produce a report detailing your carriers' closing ratios, what business they refused and why. When you meet with your representatives you'll be able to discuss your submissions and support your conclusions with facts.
Last of all, your client database provides you with the information you need to make intelligent business decisions. You can manipulate the data to determine what business is most profitable and least profitable. During the depression, catalog companies, such as Sears and Ward's began to feel the crunch. They developed a formula for working with clients that is still used today: R-F-M (recency, frequency, monetary). The theory is that your best customers have purchased something from you recently, do business with you frequently, and spend more money with you than your average client. Without an automated database, determining this information could be awfully time-consuming. However, with a well-managed client database, you can quickly and easily identify your top 10 revenue accounts, your top 10 profit accounts (and they might not be the same 10), your most profitable business, and so forth. This helps you plan where to spend your time, money, and energy in developing prospects as well as servicing and selling to your client base.
Managing your client database enables you to cross-sell your accounts easily, provide quality service, monitor your carriers' performance, and focus on profitable business. The ongoing management definitely requires discipline. However, the rewards are limitless when you measure how much quick access to relevant information increases the quality and quantity of work.