By Carl Maerz
CALLING DETRACTORS PAYS OFF
The value of transparency and TLC when dealing with dissatisfied clients
My father has operated a lawn and garden store in my small Iowa hometown for the last 40 years. As a kid, I’d spend my time after school sweeping the floors, carrying out bags of fertilizer, and running my fingers through the seed bins. Most memorable during my time helping out were the interactions he had with customers on a daily basis. To this day, he offers personal service and expertise you just can’t find at the big box stores. Every year his customers return with a fresh set of questions, like help identifying the little bugs nipping at their kohlrabi, or how to keep squirrels from infiltrating their bird feeders.
Most people just want to feel like they are heard and appreciated. It’s also satisfying to take care of lingering issues.
Come spring, people stop in to buy grass seed for their lawns that mysteriously didn’t survive the winter. It turns out there’s a misconception in the landscaping sphere that you should allow the leaves from your trees to blanket your yard each fall rather than raking them up. The belief is that the decaying leaves will provide nutrients to the grass below. What ends up happening, however, is that the grass doesn’t get the air and sunlight it needs and turns brown.
I get it. Who likes to rake leaves?
It’s easy to accept rules of thumb when they make our lives easier. This is true even for insurance agents—from time to time. For example, some agents believe it’s best to refrain from communicating with an entire segment of their client base: their unhappy clients. The idea is to “let sleeping dogs lie” and focus instead on reaching out only to their most loyal clients. This belief usually rests on the notion that communicating with disgruntled clients only increases the risk of their leaving the agency. Why bother them with unwanted contact or remind them of the relationship altogether? The contrasting belief is that it makes sense to devote time and energy to satisfied clients.
Both are myths.
I understand that few people get enjoyment from calling their unhappy clients. It’s more pleasant to deal with the happy ones. But that doesn’t mean it’s better for your bottom line. Agents tell us all the time about how, after beginning to reach out to unhappy clients, they see a sizable bump in overall client retention.
At Rocket Referrals we love data, so we decided to measure the overall impact this practice was having on agencies’ bottom lines.
We believe all agents should implement the NPS (Net Promoter Score) across their entire book. It’s like a Fitbit that keeps tabs on client loyalty. Unhappy clients are called “detractors,” and these individuals have been shown across industries to be at risk of shopping around in the near future.
We wanted to know just how likely detractors are to leave their agency over the next year and if calling them increases thechances they will stick with the agency. Or is it better to let sleeping dogs lie?
We grouped agencies into two categories: those that were calling their detractors after they responded to an NPS survey and those that weren’t. We found that agents retain only 56% of detractors over the next year if they don’t give them a call. When agents reach out within 48 hours of receiving the detractors’ survey responses, they have an 87% chance of keeping them. All this happens inside a five-minute discussion.
It turns out that simply identifying and calling detractors can make a big difference. The average agency’s client base is made up of 11% detractors. For an agency with 2,000 clients this is 220 accounts. By identifying and following up with them, it’s possible to retain 68 more of those 220 over the next year than if you took no action. This is 3.4% of this average agency’s entire book. When accounting for the impact this additional revenue has over time, it certainly adds up.
Here’s the kicker: Calling on detractors really isn’t as bad as you might think. We hear from our clients all the time about how they were apprehensive about calling a detractor, only to find out it was a pleasant experience. Most people just want to feel like they are heard and appreciated. It’s also satisfying to take care of lingering issues. Satisfaction comes not only at year end when you see a bump in net profit. Ultimately, for most agents, it’s as much about the relationship and helping people as it is the bottom line.
A stitch in time saves nine. When it comes to addressing client issues, this is a proverb that agents should abide by. At the end of the day, an agent’s business is built on relationships. Over time these connections need transparency and a little TLC. Most clients—even the detractors— are willing to stick with you when you give them a little attention.
Carl Maerz is the co-founder of Rocket Referrals, an automated communication strategy that helps agencies improve their referrals, retention, reviews and relationships. He aims to help local agencies leverage their advantages over direct writers by replacing common industrial myths with relevant and practical advice. Contact Carl at email@example.com.