How Retention Software Can Help Your Agency Succeed
Addressing the daunting task of renewal management
By Vijay Rengarajan, CPCU
The hard market continues. Premiums are increasing, insurance companies are more selective about the risks they cover, and finding affordable coverage is tougher. These factors result in more customers shopping to find lower premiums, which means any account can become at risk.
Client retention is vital in a hard market. It not only safeguards financial stability but also highlights your expertise and paves the way for future success. It is important for all agents to pay careful attention to retention because of the competitive nature of the market. The industry saw that agencies who had lower retention rates in normal times often saw their retention plummet during a hard market, according to an article by One Agents Alliance.
Need more reasons to focus on retention? Here are some important benefits you’ll see when you incorporate a successful retention strategy:
It stabilizes revenue streams. In a hard market, existing clients may be tempted to explore other insurance options due to rising costs. Retaining these clients helps you stabilize your revenue streams by preventing a decline in policy renewals. This steady income provides financial security during market fluctuations and ensures a reliable source of income.
It builds trust and reputation. By successfully retaining clients during hard market conditions, you can demonstrate your commitment to clients’ needs. This builds trust and enhances their reputation as reliable and customer-focused professionals. Satisfied clients are more likely to refer new business and remain loyal in the long term, contributing to sustained growth.
It’s cost effective. Acquiring new clients can be expensive and time-consuming, especially in a competitive market. Industry data shared in a 2019 article titled “Lowering Costs of Customer Acquisition” showed that acquiring a new insurance client for independent insurance agents can cost approximately nine times more than keeping an existing one, with the expense of securing a new customer estimated to be as high as $900.
By focusing on keeping their existing clients satisfied, your agency can save on the costs and efforts of constantly trying to attract new ones, leading to better overall profitability and efficiency.
Embracing retention strategies allows you and your agency to overcome challenges, maintain your reputation, and set the stage for sustainable growth in the constantly changing market. It’s wonderful to see all the benefits of incorporating a retention strategy into your agency, but you may be asking, “Okay, retention is important, but how do I implement a retention strategy on top of all my normal responsibilities?” The key is in retention software.
Benefits of retention software
Retention software addresses the daunting task of renewal management. Investing in the right retention solution that seamlessly integrates with your agency management system will help your business stay focused and organized while efficiently managing the renewal stage. Retention software empowers you to guide clients through these trying times and strengthen your book of business by:
Getting to know your clients better. Retention software helps you understand your clients’ needs and preferences by tracking all interactions between you and your clients.
Tailoring your approach. Experiences outside the industry have set the standard for what customers expect when it comes to client communication. You can show your clients that you genuinely care about their specific needs with retention software. It personalizes your communications and offers to each client based on information in their client profile.
Staying on top of renewals. Renewals are one of the most important touchpoints for your agency but can be easy to miss due to the busy nature of insurance. Retention software can set up and send you reminders about when policies are up for renewal, so you never miss a chance to keep a client onboard.
Simplifying communication. Communication is everything, but it can be overwhelming to remember all your client communication touchpoints on top of your normal responsibilities. Investing in retention technology can help by automatically sending out updates, reminders, and special offers using automated triggers and/or templates, making client communication even easier for your agency.
Measuring your success. Retention is one of the most important metrics you should be measuring in your agency; however, it can be difficult to identify what scales and numbers to reference your success rate. By providing easy-to-comprehend analytics and reports from your management system, retention software helps you track how well your retention efforts are doing and allows you to fine tune your strategies.
Saving you time and resources. Time is a finite resource in the insurance industry and, for too long, manual processes have plagued many insurance agents. You can free up your time and resources for more strategic retention efforts with retention software that minimizes manual routine tasks and automates your processes.
Helping you stay competitive. As more consumers are shopping the market, it is crucial to invest in technology to help you stay competitive. Retention software can help you be a fierce competitor in the market by providing useful insights to improve services and customer interactions so you can retain more clients and maintain a stable income, even when times are tough.
Remaining cost effective. It’s more cost effective to keep existing clients happy than constantly seeking out new ones. By identifying patterns and trends, retention software can predict customer churn and allow you to take immediate action and prevent revenue loss.
Investing in the right retention solution that seamlessly
integrates with your agency management sys-tem
will help your business stay focused and organized
while efficiently managing the renewal stage.
Detecting problems early. It’s important to be proactive rather than reactive when it comes to dealing with potential problems, especially in the hard market. Retention software helps you spot potential issues such as decreased customer engagement, or significant changes in usage patterns early on, so you can address them and prevent clients from leaving.
Fostering loyalty. The first step to foster customer loyalty is understanding the customers, their needs, behavior and preferences, and retention software can be instrumental in achieving this. Through real-time analytics, the ability to personalize client communications with retention software, you can focus on effective strategies that create loyal clients who refer others and keep coming back.
Customer retention strategies strengthen your agency’s reputation, reduce acquisition costs, and enhance the overall client experience. By prioritizing retention strategies and investing in the right retention software, your agency can build long-lasting, profitable relationships with your clients and your business will thrive, not just survive, during this hard market.
The author
Vijay Rengarajan, CPCU, is the director of product management at EZLynx. His passion is delighting customers with intuitive products that drive efficiency and growth for agencies. Rengarajan holds an MBA from Texas A&M International University, with a specialization in strategic management, and he holds his Chartered Property Casualty Underwriter designation. He is an innovative strategist and effective product leader with over 16 years of experience in product management in the IT industry and property/casualty insurance domain.
