5 Strategies for 100% Client Retention

I recently heard something that really caught my attention, and as an independent insurance agency leader, I think it'll catch yours as well. Your best clients are your competition's best prospects. We're going to talk client retention on today's Agent Leader Podcast. The Agent Leader podcast is brought to you by the Sitkins Network. Sell even more, retain even more, and earn even more. You can learn more@sitkins.com that's s I t k I n s. Well, hello there, everyone. My name is Brent Kelly, and welcome back to another edition of the Agent Leader Podcast. I'm so glad you're joining me today and we're going to talk about client retention. So if you're an independent insurance agency leader producer, anyone who's involved in retention, this podcast will be very, very important to you. In fact, I'm going to share five ways that you can get 100% effective client retention. I know I just said 100% effective client retention. Well, first of all, what does that mean when I say effective client retention? Yes, there are some clients, there are some account that you simply cannot keep. It's out of your control, right? There's a death, a business closed, whatever the case may be. But what I'm talking about is those clients that, your ideal clients, your best clients, how can you keep 100% of those? And let's face it, there's not a perfect world, but our goal in working with our agency members is 100% effective retention on ideal clients. I think it's very, very possible when you do the five things that I'm going to talk about today. Now, on the outset, I shared the quote that caught my attention, and I think it'll probably catch yours as well. It's obvious, but we miss it sometimes. Your best clients are your competition's best practices prospects. Your best clients that you have, that you love, that pay you the most, that you have the best relationships with. All those things are your competition's best prospects. And I think sometimes it's easy to take for granted the things that we value the most. This is especially true with relationships, right? Oftentimes the people that are that we're closest to, and this is on a personal level as well, we sometimes take for granted. I know I do that sometimes and not mean to. It just, it just happens. And this happens as well in the relationships that we have with our best insurance clients. Now, I'm going to take you way back. I just turned 40 years old, so I was 10 years old when this song came out. But in 1980, 8. The Long Hair, shrill sounding rock band Cinderella. You probably remember them, right? They had the long hair and the makeup all over, kind of crazy looking. They released the song, I'm not going to sing it here because I can't sing that high. Don't know what you got until it's gone. And if you're a fan of metal ballads from the 80s, this one will bring back memories, right? Maybe you want to go on your, on your iPhone or whatever your droid and check it, song right now, right? Don't know what you got until it's gone. But this song was about losing a lover. The message actually holds true for insurance agency losing their top clients as well. Have you ever had a lifetime? I say in air quotes here, lifetime client that you assumed would never leave, right? They would never leave me. And then unexpectedly, they moved their business away from your agency. I can tell you that as an agency coach, I see this happen often. I talked to the people that we work with and oh my gosh, we lost someone we never expected. Well, what happened? And I can also tell you that I learned this the hard way from my own personal experience. Now, midway through my insurance production career, this has been, I don't know, maybe 10, 11 years ago at this point. I wrote a $15,000 revenue account. So a nice account. I'm really happy with this account for several years. And we had a good relationship, or at least I thought we did. And after a few renewal dates, I simply figured they would be a client for life. Great. They're going to be a client forever. I don't have to do much. Then one cold, wintry day, I got back to my desk at the office to find a signed agent of record letter on my desk. Yes, they had just up and moved from me midterm, right? Like the ultimate insult. I remember it. I mean, I got back and I was like, what? My heart stopped. My face wrinkled and tensed up. And then immediately I just got angry, you know, how could they do this to me? I exclaimed, as any producer would when something like this happens, right? We put all the blame on the client. And after probably a good solid week of pouting. And of course I made some phone calls, but I was pouting. The stark reality hit me upside the face. I didn't earn their business. In fact, I took it for granted. And after more consideration, I looked at myself in the mirror one day and I said, you know what? I deserved to lose that account. See, as insurance professionals, there are two things that should be your focus every single day. Relationships. Building relationships and risk advice, offering value through your risk advice. You're a professional, so how are you developing and improving the relationships with your clients, especially your top clients, and what are you doing to help them control their true cost of risk? Now, of all the factors out there of how insurance agents lose clients, and by the way, there's a number of reasons, but the top reason that insurance clients move their account to another agency, another agent, is indifference. Indifference just simply not really feeling like their agent or agency cares. It's not typically an egregious mistake. I mean, that sometimes happened or a premium increase that sometimes happens. But most often it's simply indifference. Now, at the Sitkins Network, we believe that the goal of every agency should be to achieve 100% effective retention on their best clients. Now, I said this at the beginning, but outside of the business closing or merging or a death or any other factor outside your control, your agency should be able to maintain 100% or really close of the clients you want to keep. Now again, some of you are probably thinking to yourself, come on, that's not possible. You know, is maintaining 100% of your top clients possible? Well, my answer is this. If you're like most agencies or if you're like I was for many years as an insurance producer, the answer is no. However, if you're committed to providing a continuation process, AKA renewal process that starts from the beginning with exit barriers based on relationship management and risk advice, the answer is yes. So here's a philosophy that we often share with with our clients and our members. Stop renewing accounts and start continuing relationships. Stop renewing accounts and start continuing relationships. Most agencies focus on how they will renew accounts. How are we going to renew this account when it comes up at this date? My question to you and all agencies out there is what if your agency spent more time on building value based relationships and less time stressing over renewal dates and pricing? Right? Instead of thinking about the outcome the end, we think of renewal as one day on the calendar. Now that should be an ongoing process. So I want to talk about five ways to make the renewal a non event. How do we make the renewal a non event and achieve 100% effective retention? That's something we talk about all the time. How do you make the renewal a non event versus a hair raising crazy process, you know, for a day or two or whatever that is. So here are five ways. Five things you can do. And again, ultimately you want to be doing all five of these. When you put these five things together, it becomes really, really really hard for a client to leave your agency. And you'll see why. So number one, full time clients only. Full time clients only. This is, you know, been around for years and years, right? Round out your accounts. One of the biggest mistakes we see agencies still make today is they do not round out their best accounts. Do you write all lines of your client's business? Personal lines, commercial lines, life benefits? And if not, why? You know, even if the other lines of coverage are handled by a different department in your agency, if you're a larger agency and you don't handle personal lines and you have the commercial or vice versa, your agency agency should still be the point of contact for all their insurance needs. I know when I do workshops and talk with agencies individually, it's always very surprising to me that everyone knows, yeah, we should be rounding out our accounts. But usually it's a very low percentage. When you start to really look at it, every additional line of coverage you write for your client multiplies the likelihood of retaining that account for multiple years. In fact, there's been some studies out there that show that the average agency increases their five year retention. So this is over the, over the course of five years by 65%. That goes from 27% to 92%. This is over five years when they go from a single line policy to four or more lines of insurance. So simply by going from one line of insurance to four or more in a five year span, the average agency, not the great agency like you, who's listening? The average agency increases from 27% to 92%. What does that tell you? Full time clients only. That's number one. Number two, you've got to have proactive client touch points. Again, another duh. But not many agencies do it. The sad truth is that many agents do very little in terms of proactively contacting their clients. I talk about this all the time. Every touch point that you have with your client, you know, those people that pay your, pay your mortgage, pay your car payment, pay your vacations, pay your retirement, those people that should be the best relationships that you have. Most of the time our interactions with our clients, including our best clients, is based around billing claims or the upcoming renewal. And if those are the only touch points or the majority of touch points with your clients, you are sucking the life out of your most important relationships. I was recently speaking with an agency leader who said one of the most powerful and effective things he has ever done is, is to put a list of his top 20 clients. So he takes his top 20 clients, of course, you know, stays about the same most of the time because they're lifetime clients, right in his desk drawer. And he says, you know, every week or so I open up that desk drawer, I pull up the piece of paper and I just make some regular calls just to check in to see how they're doing. If I can help them any ways, any way I can add value to them. And he said it was the most powerful thing I've done. And simply making a phone call, that's the simple things that we miss sometimes in this business. Remember, if you aren't making regular contact with your best clients, someone else is. Someone else is. So schedule and execute on specific proactive client touchpoints. If you have to put in a calendar, do it. But this could be anything from a thank you. How about just thanking people for doing business? Right? Simplicity, a friendly check in, a birthday, a holiday, whatever it is, right? You've got to figure it out in your own scheme of things. But there is no bad reason to touch base with your client if it is providing an emotional deposit. So step two, or step three, excuse me, is proactive touch points. I guess that was step two. First time full time client. Secondly, proactive touch points. Let's get to number three. A defined continuation process. A defined continuation process. Could you imagine playing a game where the rules are made up as you go along? So you're playing a game, you think you know the rules. No, no, no, no, no, no, no, no, no, no. We just changed that. Now we're playing basketball, right, for an example. And it used to, now it's four steps, the rules have changed in the middle. So it just completely like, well, how do I win? That's what many agencies do with their clients. And here's what I mean. There is no defined outcome. There is no schedule, there are no set expectations. There are no rules of the game. Therefore, at renewal time, instead of feeling confident that you have performed as expected, like hey, we did, here's what we said we were going to do. We did it, we followed through, we were effective. You simply hope that the score will turn out in your favor. You just guess, I hope this turns out in our favor. When I ask most agencies about their continuation process. And by the way, let me take a step back here. When I say continuation process, this probably isn't ringing true for many of you. The continuation process is the renewal process. That's what I mean by continuation process. It's the renewal process. When I ask most agencies about their renewal process, which we call continuation, they Say, well, you know, we start about 120 days out or 90 days out or 60, 60 days out, even in some cases from the renewal date. An effective continuation or renewal process starts by understanding the client's expectations up front. What are the rules we're gonna play by? What do they expect from me in the agency? And this has gotta be defined upfront. So does your agency have a defined service calendar for your client? Do you provide annual stewardship reports? Right, where you're saying, this is what we said we're gonna do. This is what we did. Do you conduct annual risk reviews? Do you have a defined plan of how their account will be marketed in the future so they know how the renewal process looks like? As far as your carriers, these are just a few of the items that need to be discussed up front in your continuation process. The bottom line is this. Having no plan is a bad plan. And when your clients say, this is what we want, and this, and you can go out and say, this is what we delivered, guess what? Stress level goes down. Stress level goes down. Because you know what game you're playing. And you can win that game, right? You can win that game effectively. Number four, become a member of a trusted advisor team. You've probably heard this before, but let's face it, your best clients work closely with their attorneys, their cpa, their wealth manager, and their banker. You can go on and on with this, but financial people, they are their trusted advisor. What is the difference between a trusted advisor and a vendor? And by the way, most insurance agencies, a high percentage of insurance agencies are vendors. A vendor makes a change after the client has already made a financial decision, hey, we bought this building. How do we insure it? Right? Let's just give you an example. We did this thing, and now I need a certificate of insurance. A trusted advisor is contacted for advice before they make a financial decision. There's a big difference there. See, as an insurance professional, you provide knowledge, you provide insight, you provide advice that your clients can't get anywhere else. That's what makes you a professional. I always speak when I'm speaking to insurance groups. I'll sometimes ask, you know, how many of you are insurance professionals? You are a professional, what you do, and they raise their hand, and I say lovingly, then we've got to act like it, right? Professionals are experts in their industry. They have knowledge and insight that other people don't have. That's what makes you a professional. That's why you're the leader, the winner in this game. And so you've got to position yourself as a member on your client's financial trusted advisor team. There's a lot of ways to do that, but you've got to position yourself there because again, they can't imagine making a financial decision without you. You're that important. Which leads to number five. And this could be part of that, but it's becoming an indispensable resource. Becoming an indispensable resource. So there's a law that I love to share. It's the law of compensation. And the law of compensation states this, that your ability to get paid and to get paid well in our insurance world, that means, you know, having new clients and keeping new clients depends on three factors. Three factors. The law of compensation. Number one is the need for your products or services in the marketplace. Do people need insurance and risk advice today? Yes, they do. Number two, your ability to deliver those products and services. Can you effectively sell insurance products and services? Yes. Here's the big one. Number three, the difficulty there is in replacing you. Let that sink in for a second. The difficulty there is in replacing you. How difficult are you to replace? What do you offer or what can you offer to your top clients, your best clients that no one else can provide? What makes you indispensable? Now, I'm just going to throw out some ideas. It really depends on your agency and the type of clients you serve. You've got to come up and think deep into this. This has got to be your decision. But it could be a lot of things. It could come in the form of doing specific risk analysis for an industry. Maybe it's your network of resources. Maybe it's the way that you consistently communicate certain things. Maybe it's your community involvement. There's some agencies that are so involved in their community, it makes them indispensable. Or maybe it's your ongoing educational services. You do workshops and things for your clients, whatever that is. Only you can determine how to become indispensable. But when you find it, your clients could not imagine doing business with anyone else. They couldn't imagine doing business with anyone else. So here's the bottom line. And everything is 100% effective retention possible. Yeah, it is. If you do all these things and do them well. Now, here's the reality. It takes more work up front. This stuff that I'm talking about takes a little bit of work. But when you implement these five strategies with your best clients, your relationships will be stronger, your referrals will increase rapidly. And here's the big one, your stress level, it will decrease See, the goal is to have clients for life. We don't want to churn clients. We tell me, oh, we got these clients coming in. Well, who's coming in the front door and how many are coming back out the back door? We want clients that are with us forever for their life, for their business life and for our life. And here's something to think about, even a 1 to 2% increase in your retention, 1 to 2% in retention. So if you're at 93 and you get to 94, I know I'm talking 100, but just talk about process in your agency, you're 95 and you get to 97, a 1 to 2% increase in YOUR retention can improve your agency's overall profitability by 5 or 6%. That's big time, right? That's big time. Remember again, your best clients are your competition's best prospects. So handle with care.