Today, winning a new customer is much more costly than retaining those who are already part of our portfolio.
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 acquisition cost, we are not just referring to advertising and marketing expenses. If your company has not yet automated the essential processes for closing insurance sales, such as quotations, managing exclusions, sending documentation, etc., the resources allocated to attracting new customers often exceed the first year’s revenue, resulting in unprofitable insurance sales. This explains the importance of retaining customers during the next renewals. In other words: loyalty.
But how to satisfy and keep the customers of brokerages or insurers? There are various loyalty levers and techniques that, combined with the right technology, lead to increased profitability in the business.
What is customer loyalty?
Customer loyalty is 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
Retaining customers 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 recommend us, we will be acquiring 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 industry it can take many months to close a sale with a customer. For this reason, if you already have clients, you only need maintenance and cross-selling actions to make your portfolio even more profitable.
Weaken 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 already have one or more insurance contracts with you and prefer to have all their insurances with the same company.
Facilitates cross-selling
As we mentioned earlier, we enjoy the possibility of offering other insurances that complement their policies or others that protect them from risks they had not contemplated.
Cross-selling is the key to open the door to new commercial objectives, since:
- It strengthens customer service.
- It allows to discover customer interests in greater depth.
- It builds healthy business relationships.
For this type of actions, it is essential to know the customer and offer him only what he may need. In this way, you will avoid over-saturation and the customer will feel truly 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…
Provide brand ambassadors
Normally customers who repeat purchase in your company is because they are satisfied, and once applied loyalty strategies, you can get them to start recommending you.
In this way your reputation in the sector increases, and you can turn your customers into brand ambassadors who will speak well of your company in their circle.
Enhance your reputation
As a broker or insurer, 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 chances 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 product or service
- Offering an agile, reliable and secure service
- Personalize 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
Implement 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?
- 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.
Personalize your offers and promotions
Segmenting your customers according to their buying habits helps you to design marketing and loyalty campaigns, based on customer groups, depending on whether your objective 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.
Reward customers
Loyalty programs are quite relevant in this aspect, which serve to reward the buying behavior of a user, in order to retain him and make repeat purchases.
Some examples of how to reward customers 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 persona, 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 persona.
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 outwardly the appearance of a loyal, responsive and polite business to your customers.
Leverage the information you collect
Information is the foundation 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 physical or online brokerage, we will know what interests our company’s clients, 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:
- It allows us to reduce investments in other less effective actions
- It gives rise to more effective discounts and promotions
- Provides business opportunities
- Increases customer loyalty
Offer 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 of becoming a reference within a specific niche.
Identify those clients with a higher probability of leakage
Detecting in time any symptom that indicates a possible leakage of customers is crucial for the reaction margin of a business, since once they have switched to the competition, recovering them is quite complex and costly economically.
Moreover, in the event of having to optimize resources, it can help us to know whether it is worthwhile or not to dedicate time to 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 analyses performed, convert 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 essential to make tactical and strategic decisions in order to build customer loyalty, thus providing a competitive advantage.
Take care of 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 secure. 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 building 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.
Mistakes 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 loyalty in the insurance industry
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 buying 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.
