Over the past 12 months, most agents found themselves considering a business “win” to be anything that wasn’t a loss — that is, the main focus was on client defection prevention. As consumers started looking to cut costs anywhere they could, producers worried that their clients would begin shopping around, and they simply couldn’t afford to lose their clients to a competitor. So they worked diligently to try to help temporarily lower premiums when asked to do so, and maintained just enough contact with clients to make sure that they didn’t lose them. In other words, agents were incredibly focused on playing defense.
This was a wise decision in light of the recession. Now, however, many people have had time to adjust to the economic maelstrom of the past 18 months. Though we’re still operating in a fear-driven environment, it’s time to get back to playing a bit of offense. Yes, that means that it’s time to redouble efforts to increase business — but in a fear-driven economy, this offense needs to be conducted with utmost tact.
Rest assured: A recent study demonstrates just how this can be done, and why this approach can be so effective in attracting new business while preventing you from losing clients.
The study
This case study was conducted by InTouch Corporation over the course of 14 days using the databases of 400 independent insurance agents. Calls were made to the clients of all 400 agents, asking specifically how the client felt about the service they had been receiving from their agent. This call was not intended to simply thank them for being a loyal client (defensive strategy), nor to offer them new policies (too offensive for this market). Instead, the strategy behind this study was to proactively reach out to clients to ask for their opinions of the service they were receiving. Did the clients have any concerns their agent should be aware of? Was the client happy with their agent? Was there anything the agent could do to provide better service?
This experiment revealed good news for agents. In 84 percent of the calls, clients didn’t voice any concerns. In 7 percent of the calls, the client did make some sort of issue clear to the caller; this information was then relayed to the agent to help them correct the problem.
But the best news for agents came in the 3 percent of clients who told the caller that they actually needed additional coverage. These clients reported additional drivers in the household, additional policies needed on new or second homes, and more.
(The remaining 6 percent of clients could not be reached.)
What does it mean?
This study showed conclusively that, despite this fear-driven economy, not all clients are shying away from spending money, making it a fantastic time for agents to begin gently reaching out with a tactful, offensive strategy. The study also showed that independent agents have been right on the mark with how they have managed their client relationships over the course of this recession. For the 7 percent of clients who reported a concern, this simple strategy provided agents with the opportunity to contact those clients and address any fears or issues, thereby preventing them from defecting to a competitor.
All agents can benefit from selling additional policies to even 3 percent of their clients. And if 3 percent are looking for additional policies now, during these uncertain times, just imagine the increase in business you can realize as the economy continues to improve. It is imperative, however, to start playing offense now — because there’s little doubt that your competitor will be, too.
Brenda Rhodes is the CEO of InTouch Corporation, a CRM and insurance review appointment-setting service. She can be reached at 408-458-4300 or brhodes@in-touchcorp.com.