I am of the conviction that MOST insureds are only with you for a time no matter how well you treat them.
Why?
Well as Lauren Oliver once said, “Everyone you trust, everyone you think you can count on, will eventually disappoint you.
Now that is not my saying that you, my fair reader, are going to disappoint your insureds. You would never do that. You offer the best customer service and sage wisdom. Your clients LOVE you (I hope) and if they do not… well I will cover how to fix that perhaps in another article down the road.
But the sad truth of the matter is every relationship, no matter personal or business, if it lives long enough… will experience disappointment and in OUR industry… that usually precedes an exodus of your Agency.
Before we dig in to the how's and why's - if you are an Insurance Agent reading this - join The Insurance Soup group on Facebook. We are 30,000 Agents deep in the most active playground on social media for Insurance Agents.
You'll enjoy it. I promise. It's an infotaining roller coaster of a group.
Back to the article.
What is frustrating about it for Agents in particular; is how many outside forces we deal with that can ultimately totally ruin a great relationship.
Relationships that go beyond business at times.
An Underwriter does not like the way something on a photo looks from the house – denied.
A claim not being handled properly or paid in full when the insured distinctly remembers having “Full Coverage”
A rate increase that you have no control over.
A bad interaction with one of your staff.
The list goes on and on of ways that outside forces can ruin relationships you hold near and dear in your Agency.
Which leads me to my topic today….
Knowing that EVERY relationship has a shelf life…
Knowing that SOMEHOW... SOMEWAY... at SOME POINT.... the likelihood is that SOMEONE or SOMETHING is going to sour a household…
Why do MOST Agents fear trying to deepen a relationship with an insured from the on-set?
It’s true!
If you took an honest accounting of your Agency and staff…. What percentage of the interactions you have with your new insureds are tackling the whole enchilada?
Most Agents are scared to go too fast, too hard, too soon with a new insured.
They’re comfortable selling the home and auto together. Some are even ok trying to position a term life or a disability policy in with it… but most are not.
And once that client LEAVES your office that first time… for MANY of them… it WILL be the LAST time.
It will also be the last time you speak to many of them until they have a problem with you.
I am 40 years old and I have been a customer of the same exact insurance company since I have been 18 years old, for my auto insurance.
Do you know how many times they have EVER called me?
ZERO. LITERALLY ZERO. Someone call their local carrier suit and tell them what a bad job they do making their insureds feel special!
I get a birthday card from them every single year though with a printed fake signature AND a Christmas card from them so I know Im on their minds though. Real genuine stuff.
But my experience with my car insurance Agency is NOT unique and MANY insureds also NEVER hear again from their Agent or Agency.
Knowing your insured is never going to call you… and knowing there’s a good chance you are the type of Agent / Agency that rarely or never calls your actual insureds….
Why are you not trying to cross sell the heck out of them WHILE the relationship is STILL GOOD?
Sitting down with the client during their first 6 months with you is CRUCIAL in creating depth in the relationship and really anchoring that household down with you for a bit.
The client is at their happiest. They have not had any interactions with outside forces yet. They haven’t called in yet in a bad mood and been rude to your CSR and got some back from them in return. They probably do not have a claim. They have not experienced a rate increase. No one has rocked the boat with them yet.
On Jay-Z’s Blueprint 3 album, there is a track called On to the Next One.
The lyrics tell stories of people who are not happy with what they have in life and are moving on to the bigger and better thing.
Id like to implore you to pay attention to a key line of the song though…
“Hey bring it back, now double your money and make a stack”
You need to think like this with your new households.
If you are not cross selling that client to the fullest during that first policy period with them and you just are “On to the next one”
In 3 months from now when they have a fender bender and do not like the claim handling… in 6 months from now when their rate goes up $4.61/mos… in 18 months when their cousin opens an Agency… in 9 months when SOMETHING happens that rubs them the wrong way…
Guess what?
Theyre “On to the Next One” too…
But when you “Bring em back” you “double your money and make a stack”
How's that?
Let’s say for sake of the conversation you just booked the Jones families 2 cars.
They do not want to bring their homeowners over just yet as they feel it will be a pain and it's set up through escrow.
So you close the deal and move on. $1000 semi annual premium at 12% commission.
You make $240 on that client the first year.
You do not think twice about them because you're in hunter mode and you cant try and convince your existing book to insure further.
Month 11 they get a renewal notice and they're upset. They shopped you – didn’t even tell you – and are out the door.
Now you made $240 on the sale over the year … but had to pay Johnny boy, your producer, 50% commission on round one – so you really made $180… oh yeah and Johnny makes $15 an hour and the deal took 2 hours to chase down and set up… so you’re down to $150… of that $150, 40% is going towards your overhead and costs… youre down to $90… and you have not paid taxes on the money yet.. so you are really down to about $65 profit….
Oh yeah and Mrs Jones called in once to ask questions for 30 minutes… $58 profit…
And she called in with the rate increase to ask why and Johnny spent another 30 minutes with her…. $50 profit
On paper you made $240… in reality you made $50. …
And to replace that household you need to buy 8 internet leads… at $10 each…
And congratulations… you are officially in the red on that household. Don’t like that math at the end of the equation? Throw it in at the beginning. Took 8 leads to acquire the household. Results are the same.
Stay with me.
Now in walk the Smiths.
Same situation. They ONLY want to give the cars. Home is set up through escrow. They have enough life through work.
They leave that day and you ONLY closed the cars… 2 cars… $1000 semi annual at 12% - $240…
But even though you did not close the home or life, you spend your first 90 days following up with them to make sure they're happy and after hearing from you in month 3, they agree to come down to your office and make sure they have what they need protected, protected.
No other Agent has ever done this for them before and it feels special.
They come in and the relationship has become whole. It is no longer transactional or quick commission and the Agent is able to share their human side, laugh together with the prospect more as it’s a comfortable meeting, and truly deliver some candid value and advice the insured needed to hear but wouldn’t listen to when they were being “sold”
Now the Smiths bring their home over for the auto home discount - $1800 annual premium at 12% - $216 in commission…
During the conversation you were able to truly overcome why life insurance at work doesn’t cut the mustard and even though its not the whole life you felt the PH SHOULD have, they did take a term life policy out to cover their mortgage and provide each other 5 years income should one of them pass…
First term was $30/mos and the second was $22/mos - $924 year one premium. Lets call it 40% commission because that’s what captives seem to accept as the norm.
That’s an additional $370 in commission…. AND a third product they now have with you… that they purchased based on your advice and expertise… that you did not get a chance to display while just closing the auto.
And then on month 11… when the Smiths get that rate increase… they remember that you saved them money by bringing their auto policy over… they remember that you saved them MORE money when they brought their home over… they remember that they saved even MORE money on BOTH by bundling… and they remember that YOU are the FIRST person who spoke to them about the situation theyd be in if they didn’t have the right life insurance set up. And MOST powerful? They remember YOU and the RELATIONSHIP.
Now all those things that are out of your control do not seem nearly as big a deal to the insured. Moving to a new insurer is a pain in the ass. They have so much with you. They trust you even though they are not happy with the rate increase.
And the Smiths stay with you for 8 years….
That auto policy paid you $1,920 over that term… the home paid $1728… and the life paid $370 year one with some trailers over the years, albeit small.
That household that would have left you at the end of the first year with just 2 cars and you earning a meager $50... before having to replace them.
Instead you have a relationship that paid out about $4,000 while you protected them that also sent you in 2 referrals a year on average…. With ½ of them becoming new households themselves.
Do you follow what I am driving at here?
You HAVE to pursue a deeper relationship with your new policyholders.
You can not just be “On To The Next One”
You HAVE to “Bring em Back” so you can “Double Your Money and Make a Stack”
Deepen those relationships my Agent friends.
Its far superior to always looking for the next one.
If you are not already a part of Insurance Soup, our free Facebook group with 30,000 peers, we cordially invite you to join the family. You will find markets, referral partners, education, laughs, and more inside!