Daily sales & marketing tips for insurance professionals

My wife and I insure our cars and home with Safeco (which, as it happens, is now teamed up with the awesome Liberty Mutual) and we bought our combo policy through The Denver Agency, a well established and respected independent agency located in, you guessed it, Denver, Colorado.

When we decided to consolidate our home and auto policies last year (we had been insuring our cars direct with Progressive), our agent was incredibly helpful and responsive, and the process went smoothly.

Point for The Denver Agency.

However, where The Denver Agency comes up short, and I’m looking at this as both a client and a student of marketing and customer service, is in conveying the sense that they care about me. To be sure, every time I call or email, I get excellent and attentive service. But the rest of the time there is … silence. No communication whatsoever.

For some consumers, this is just how they want it: forget the boring newsletters and mail-merged holiday cards, they say, just get me covered and leave me alone.

While I can understand this point of view, I think it’s risky for agencies to assume that it is widespread. I would venture that most consumers want to have some kind of regular interaction with their agent or agency, even if it’s as simple as a yearly email asking if there’s anything they can do. Such touch points reinforce the relationship, and they give people a reason to stay.

Without any communication, consumers are left to wonder if the agency takes their business for granted, and such thoughts, needless to say, prevent any kind of loyalty from developing. My experience is case in point: to put it bluntly, inertia is perhaps the only thing keeping my wife and I with the Denver Agency, and while inertia is a powerful thing, it’s not something a business should bank on.

Earlier this year, J.D. Powers’ surveyed independent agents, asking them to rate their satisfaction with their insurers. The survey results revealed that “agent satisfaction typically increases the more often agents interact with the business contact from their insurance company. Agents prefer to receive business contacts via phone or e-mail at least once or twice a month.”

As a matter of fact, independent agents value their relationships with their carriers more than their compensation.

Consumers are the same as agents. We all want to feel valued, connected. Regular touches can create this feeling, generating satisfaction and loyalty in the process.

Customer retention is essential to a thriving business. The fewer clients you lose, the fewer you’ll need to add. It’s basic math (my favorite kind).

But a lot of agents lose track of their clients after the policies have been issued, and the result is an alienated customer base that lacks loyalty and will chase after a lower price at the first opportunity.

The key to retention is to show them you care. It’s essential to instilling a sense of loyalty. Send a card or call every once in a while, even an email while do most of the time (but a card is better). Stay on their radar.

We’re emotional beings, we humans. Econ 101 teaches us that consumers are rational, utility-maximizing individuals, but we’re not, at least not most of the time. You know the phase “people buy on emotion and justify with facts”? What about “buy now, worry later”? Have you been watching the Dow lately? I think I’ve made my point.

When you build a relationship, even a superficial one that’s based on sending a Christmas card each year, you make a connection with the emotional part of the client’s brain—their limbic brain, if you want to get scientific. Loyalty resides in the limbic region.

If you don’t build an emotional connection, the client’s neocortex (the rational, penny-pinching part) takes over. They will start to wonder … Could I get a better deal elsewhere? Cold calculation ensues: Why would I stay with my current agent if I could better deal?

Then the client is no longer your client.