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The Key to Retaining Clients
Michael
Beck, Founder
The Insurance Coach
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Have
you experienced this scenario? You sell someone the policy they need,
but after a short time, they leave you. It's one of the most
frustrating things in our business. In fact, rather than being a
client, they've really become a customer.
Why does this happen? Even though we sold them the policy they needed,
they up and go. Why do they leave? Sometimes they leave due to
circumstances out of our (and often their) control. It could be a move
out of the area, loss of a job, divorce, etc. But more often they leave
for other reasons. Many clients/customers leave because of rates
– or so they say. But the truth very often is that the excuse
of rates is really a symptom, rather than the problem. Even more
importantly, it's not that they found a better rate that's the real
issue. The real issue – or symptom – is that they
were shopping rates at all! Which brings us to the real question. What
problem is rate shopping a symptom of? Why would they be rate shopping
at all?
People generally look elsewhere because of one or
more of the following reasons:
1. Wrong Kind of Client (relates to how you
acquired them)
2. Lack of Credibility (relates to how you made the sale)
3. Absence of Relationship (relates to systems)
Let's discuss the cause of each problem and how to
avoid or overcome it.
1. Wrong Kind of Client
(relates to how you acquired them)
Cause: If you find your clients
through passive methods – internet leads, yellow pages,
newspaper ads – then there is generally only one thing they
are interested in - a good rate. After all, they have nothing else to
go on. There's no other reason for them to do business with you other
than your rates.
Solution: How do you avoid attracting
price shopping customers? Attract clients instead using active
prospecting methods. Active prospecting methods are: effective
networking, generating client referrals, properly leveraging centers of
influence, and just talking to people as you go (personal observation
– an art in and of itself).
2. Lack of Credibility (relates
to how you made the sale)
Cause: Plain and simple, if
you just sell your client a good policy, you run the risk of being
viewed as an insurance salesperson. And if that's the case, then when
your policyholder meets someone they view as an insurance professional
(as opposed to an insurance salesperson), they are attracted to them
and will often leave you for them.
Solution: Become someone who other's
view as an insurance professional. What's the difference between an
insurance salesperson and an insurance professional? An insurance
salesperson sells insurance and an insurance professional helps people
solve problems. One sells. The other helps. This is not simply a matter
of semantics. The most effective way to illustrate this distinction is
by offering an example. Let's use a multi-line property and casualty
agent as an example. Someone who thinks and acts like a salesperson
will provide a quote to a prospect for an auto insurance policy and may
also try to sell them a homeowner's policy. Their focus is on selling
one or more policies. In contrast, an insurance professional will make
every effort to sit down with the prospect and truly assess their needs
in full so they can suggest the best solution to the problems they
uncover. Often it leads to a sale, but not always. However, when you do
this, you 1) establish credibility, 2) build a relationship, 3)
ultimately sell more products, and 4) develop more loyalty (retention).
Conducting one's self as a professional rather than a salesperson
requires a shift in thought, action and words. Professionals offer
solutions that may not even involve a sale. They may refer their client
to other professionals as needed. They take an interest in their
clients, not just their policies. The payoff is more than worth the
effort.
3. Absence of Relationship (relates
to systems)
Cause: If, after you
make a sale, you either have no contact with a policyholder again or
only speak to them when they call you, then you have no relationship
with them and they are, in fact, a transactional customer rather than a
client.
Solution: Obviously the way to
create relationships is to interact with clients. But the challenge
that most of us have is in finding the time to build these
relationships. Which brings us to why Absence of Relationship is
related to systems. In the absence of one or more systems, staying in
touch with clients and the entire relationship-building process is a
hit-or-miss endeavor. Without consistency, it is difficult for any
relationship to grow. Additionally, if contact is infrequent no real
connection develops, while too frequent contact simply becomes annoying
and reflects poor judgment.
The key to consistent contact at an appropriate frequency is to
implement systems. In order to implement systems you need contact
management software or some other systematic means of generating
reminders. If you don't presently have CRM (Client Relationship
Management) software, then shame on you! Anyone who is in the business
of marketing must have some software or some system for purposes of
scheduling calls, to-dos, and meetings. [A couple of popular CRM
software programs are ACT!™ and Goldmine.®]
Assuming that you have a CRM solution in place, we
need to answer three questions:
1. Which of your clients should you build
relationships with?
2. What are some practical ideas for staying in touch and building
those relationships
3. How often should contact be made?
The answers to these questions are dependent upon
one another. Staying in touch with clients requires both passive and
active systems. Passive systems are those which are essentially on
"auto-pilot" and don't require much of your personal time. Active
systems are those which are dependent on your direct involvement.
Passive systems can reach greater numbers of people because they don't
require your personal involvement. Active systems, on the other hand,
require you to be more selective. You need to choose who will get your
personal attention.
Passive Systems
Due to their nature, Passive Systems can be used
with every one of your clients, or more accurately, every one of the
clients you'd like to keep. Some Passive Systems you can implement are:
Printed or email birthday cards (annual)
Printed or email anniversary cards (annual)
Printed or email annual review reminders (annual)
Printed or email thank you note (annual)
Printed or email newsletters (monthly or quarterly)
Email thought of the week (weekly)
All of these systems are good, but have only a
marginal impact on their own. They're best used in conjunction with
Active Systems.
Active Systems
The very nature of Active Systems requires us to be selective with whom
we choose to invest our time. Basically you'll want to nurture the
strongest relationships with your best clients – your "A"
list. These clients typically will be those who have multiple or
sizable policies with you, are easy to work with, and/or have been
doing business with you for a period of time. This group will generally
comprise 10-20% of your book of business.
Some of the Active Systems you can implement are these:
(Use your CRM solution to
keep your systems consistent and timely)
·
Take your "A" list clients out to lunch for no reason (once or twice a
year)
·
Personally call just to say Hi and stay in touch (2-3 times a year)
·
Personally call to thank them for their business (annual)
·
Conduct "A" list client appreciation events, open houses and seminars
·
Send "A" list clients a Thank You gift (annual)
·
Ask for their help (don't you feel more of a connection with someone
when they ask for your help?)
·
Send referrals back to clients when possible
Clearly, these are just a handful of Passive and
Active systems. Hopefully they'll get your creative juices
flowing. Also, keep this in mind. While these are
effective systems to be aware of, they're not nearly as effective as
when you actually implement them!
In conclusion, anyone can turn their retention problems around as well
as improve an already good rate of retention. By implementing
more Active Prospecting methods, by shifting to more of a Professional
attitude and demeanor, and by utilizing both Passive and Active
Relationship Building systems, any insurance or financial services
professional can boost their rate of retention, improve client loyalty,
and generate more client referrals.
Written by
Michael Beck, "The Insurance Coach". Michael, an
Executive Coach and Recruiting Activist, helps insurance professionals
succeed faster and easier. He can be reached at
877-977-8956 or mbeck@theinsurancecoach.com
You can subscribe to his newsletter, purchase audio programs, and learn
more about Michael and these ideas at www.TheInsuranceCoach.com
Permission
to reprint with full attribution. © 2006 Exceptional
Leadership, Inc.
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