There’s an adage that getting new customers is expensive, but keeping them is profitable. Insurance agency owners know this conundrum. Yet, owners continue to struggle with investing in their insurance agency marketing.
A 1990 study by Bain & Company and Harvard Business School’s Earl Sasser famously showed that increasing customer retention rates by 5% can increase profitability by 25-95%. A recent Invesp infographic backed up the case for customer retention, showing it costs five times more to attract a new customer than to keep one.
For insurance agencies, customer retention is especially important: personal and commercial policies can take two to three years to show profit based on commissions paid. Keeping customers around for those two or three years becomes important.
Digital Marketing: Your Customer Retention Boost
Digital marketing allows you to communicate with your customers more effectively and at a lower total cost per impression than ever before. Plus, digital marketing lets you capture information on customer engagement and preferences to continually improve your tactics.
Take a digital newsletter, for example. With today’s technology, you are easily able to write, mass distribute, and collect information on exactly how your customers are interacting with that newsletter. You quickly pull a distribution list from your management system, create the newsletter using agency blog posts, and track interactions through your newsletter distribution platform.
That same newsletter content can be posted to Facebook, Twitter, LinkedIn, Google+, and other areas where your customers engage with your agency. This helpful content can be customized per channel, and all serve to help drive pertinent information to your clients, directing them back to your site for more.
And you know what’s happening every step of the way. Through this simple process, you can capture what’s working and where your customers are going. You’ll get stats on who’s visiting your website, accessing your blog, and leveraging your self-service portal among other information.
With this information, you can reach out via phone to touch base. You’ll be armed with the knowledge of what they viewed, giving you insight into what they need, and inviting to help them with more.
It beats the heck out of sending a postcard.
Get Connected through SIS
If you aren’t fighting for space in your customers mindshare – no matter how small that space is – you are essentially surrendering it to your competition. The best way to fight for that space is to get the right tools and tactics. At SIS, we work with our partners at NuGrowth Digital to stay up to date on industry marketing trends, providing solutions through our marketing arm Agency Marketing Partner. And, we continually collaborate with the Partner XE community to integrate the Partner XE agency management system with the latest marketing tools.
Your insurance agency marketing goal is to stand out among the noise. Identifying and investing in serving a niche market is one of the most efficient and effective ways to achieve this challenging goal.
When you serve a niche market, you have less competition, making it easier to gain new customers in a specific arena. Your agency is set apart as providing “X” type of insurance, making you distinctive. PIA National’s 2022 Independent Agent Survey found that respondents devoted more than 20% of their book of business to a niche market. You, too, can capitalize on this valuable strategy.
Over the past few years, there has been a surge in insurance agency management transitions. Mergers and acquisitions specifically are on the rise, with an estimated 550 deals, up 12% from the previous year, in the first quarter of 2021. While these transitions can be profitable for owners, they can come with significant trepidation and worry from employees and customers.
As an owner, you need to start thinking ahead about how to prepare your agency for its eventual ownership transition. Whether you plan to perpetuate internally or externally, it’s essential that you prepare. That preparation includes setting your agency up for its highest valuation, prepping your team, and investing in tools and processes to bring your agency into the future.
Good partners and partnerships are critical to success in any business, but it’s crucial in technology where the pace of change and breadth of innovation is high. Insurance tech is growing fast, and it’s critical to look to progressive partners to keep up with the pace.
Why Partnerships Matter
Innovations happen everywhere, every day. Things like electric cars, an increase in IoT, the interconnectedness of tech systems in healthcare and our own homes, and other innovations significantly impact our industry. These tech advances inform how insurers can gain data to inform policies and process claims.