customer service

Why Your Clients Are Leaving and How to Stop Them

As an insurance agent you probably have a solid idea of how your clients feel about your agency. Right? After all, you are working with them day in and day out, so certainly you have a good understanding of how you are performing in regard to customer loyalty.

Probably not. Unfortunately, most agents are bleeding clients by not focusing on client retention. Here’s why:

1. They are laser focused on acquiring new clients
2. They don’t invest much time with clients outside of renewals and claims
3. They believe retention is a natural byproduct of good customer service

I agree: zeroing in on new clients is important for new and mature agencies alike. After all, if you do not bring in new blood the only way to increase commissions is through cross sales. It’s a no brainer. But, if your existing clients are dropping like flies it makes it even more difficult to grow an agency and increase commissions.

Finding new clients versus client retention

To be fair, most agencies receive higher commissions for new policies than renewals. But research shows that, on average, it costs 6 to 7 times more to acquire a new client than retain an existing one. So, when the cost of acquisition is accounted for, existing clients are actually netting higher profits for the agency over the long-term.

Why are your clients really leaving your agency?

But there is a very important thing to keep in mind. pie chart Most clients are actually leaving your agency – not because of price, or competitors, or even holes in satisfaction – but because they feel like their agency doesn’t genuinely care about them.

In fact, this is by far the number one reason why clients leave their insurance providers/ agencies. The American Society for Quality references a study which indicates that 68% of customers defect through perceived indifference. The next closest reason at 14% left because they were dissatisfied with some aspect of the service.

For many agencies this will turn the notion of client retention upside down. Great service only prevents 14% of those clients that would defect from doing so. The perceived indifference that accounts for an astounding 68% of client loyalty is due to the lack of regular meaningful communication from the agency.

Honestly, I did not fully believe this data until we saw it for ourselves at Rocket Referrals. We work with hundreds of insurance agents and have collected thousands of negative and positive comments from their clients using the Net Promoter Score.

What’s the number one reason clients are upset with their insurance agency?

We were able to analyze over a thousand negative responses from clients across many different insurance agencies. Comments were provided from clients which outlined the reasons they were unlikely to refer their insurance agency to others. This feedback focuses specifically on client loyalty but also indicates precursors for specific reasons why clients are leaving their insurance agency and searching elsewhere for coverage.

Our data was very much in line with the study referenced above. The number one reason clients were upset with their insurance agency was that they never hear from their agent outside of claims and renewals. This accounted for a total of 44% of the responses we collected with comments like:

“There is no personal contact. No call backs. No customer care with questions that would give us better coverage.”

Issues with high price ranked second at 21%. Not returning phone calls and other various service related problems both came in at 18% and 17% respectively.

When you combine the lack of personal communication with never returning phone calls you get a total of 62%. This number is very close to the 68% mentioned above due to perceived indifference.

The proof is in the pudding. By and large your clients are not leaving because of price – a factor generally out of your control. The number one reason your clients are upset with you is because you are not communicating with them regularly in a meaningful way. This is in your control.

Customer Service vs Customer Experience

The new thing for many bloggers and speakers to mention and discuss, in minor detail, is the understanding that customer service is great, but the customer experience is what separates you from the competition…

Here is what I say….Customer service is just foreplay, the customer experience is the home-run.

What sets your agency apart?

When I speak to agents across america I ask them, “What would you say sets you apart and makes you better than the agent down the street?”  They always say:  “Customers service.  Seven out of ten times, that is what they say.

Then they always give a whole list of reasons to back it up.  But here is the issue:  customer service is something the customer expects, and they should.  It is what they pay you for.

I mean, come on, be real here.

To win “the customer of now and tomorrow,” the customer experience is what’s going to set you apart.

This is not the new service, this is the expected experience?

A visual description of “customer experience.”

So what does it look like?

Up to right now, this very minute, no one has told you in a simple way…

From a 20,000 ft view:

“Customer Experience is the process the customer goes through from them first knowing about your brand to them buying multiple products from you.”

From a 10,000 ft view:

  • Your advertising and marketing so they know your brand and name.
  • Your networking and prospecting so they know your story and support for the community.
  • Your sales process; from qualifying, to quoting, to proposing, to the close.
  • Your customer service options you provide them and how you provide it to them.
  • Your retention process of providing value by answering their question in the channel and media they need.
  • Finally and most important, how you cross sell and have them buy multiple services from you.

From a 1,000 ft view:

  • Agency apps
  • E-signatures
  • Self service websites
  • Instant online Quotes
  • Payments on your website
  • Media to answer questions

These are all desired and demanded by the customer.  We need to offer these, not the companies.

Insurance companies should provide the intangible products, we should be offering the tangible products.

How do we do this?

We organize these tangible customer demands into a process that suits our clients first.  We build our agency and work flows second.

Through trial and error we find out what works and what doesn’t. Then we circle back on a regular basis to back-fill the errors and build on our success.

Once our agency masters this process in a consistent manner . . .

BOOM!

That is the Customer Experience I speak of!

The customer experience we all know

Here’s an example to relate:

When you go to McDonald (I don’t recommend this, just an example), you know it is bad for you, but in certain instances you stop there . . . why?  Because of the experience.

Whether you’re in Florida, Washington State, or Rio de Janeiro, a McDonalds experience is the same, the menu is the same, the Big Mac tastes the same, the wrapper and bag looks the same, the fries are the same, and they all have a drive through and this makes things simple and convenient for the customer and business.

Still doubt me and others?

That’s ok. In life I have found that when people don’t know or understand something, they initially don’t like it.

Be honest with yourself and ask “Are the things I am doing today working and yielding the same results it did when I did them 15, 10, or 5 years ago?”

The answer is no because you pride yourself on customer service, when all you need to do is create an awesome customer experience.

Agents are doing it everyday and their growth is way above average.

Take a few of these tangible products and expand on that service and create the experience.

You can do it no doubt.

What other tangible products are you offering your customers that’s not listed here.

Share with the community!