Why Cross-Selling and Retention Correlate
One commonality among most insurance agencies is “hitting the nail on the head” when it comes to retention. Many agencies will rely on loyal customers who renew based on their agent’s good customer service, convenience, and their relationship with that agent or agency over a period of time. As consumers continue to sing along to catchy slogans from the marketing efforts of carriers such as “save time and money in 15 minutes or less,” the local agent is at risk more than ever of their retention rates slipping away.
A misconception for many agents is that having more leads for their agency will result in a larger customer base, which ideally should help increase their policy in force (PIF) count, but also helping increase retention or at best keep it stagnant. What many agents tend to oversee is there are plenty of leads within their current book, which are called mono-lined clients. A mono-lined client is one who holds just one policy with you and is typically at a higher risk of leaving you quicker.Having new opportunities for your agency can help increase profit, but may be harder to sell and, in the long run, keep as a customer base.
But take a minute to looker deeper in your book of business to see if there are trends with multiple policy clients versus mono-lined clients. When was the last time one of your clients who had multiple policies with you left after a year or two? The number is most likely low and there are a few factors that go along with this correlation:
- Multiple policy holders have the convenience of being insured by one agent or agency.
- Shopping for insurance is not something people look forward to; if they can get everything done with one agent, they most likely will choose that route.
- Having multiple policies increases the chances of saving time and money for your client. The word “bundling” will always put a smile on their face.
- Building a stronger relationship with a current client takes less effort than with a new one; people are more likely to buy additional products if there is trust and value built in.
- Knowledge is power; some of your clients may not be aware of the importance of insuring some of their risks or assets, and may never ask about additional policies- it can never hurt to introduce risk they never knew they had.
Simply put, it is evident that agents, whose clients have more than one policy with them, are renewing more than those with one policy. Although this may be different across different agencies, and depending on what your niche market may be. Offering more products to the loyal customers in your book is going to help increase your agencies PIF, retention, and avoiding grabbing new leads that may not be the right customer for you.