Staying Close to Customers in a Down Economy
Act cFluent Newsletter, April, 2009 - Subscribe today Subscriber benefits include early evaluation of new products and discounts.
Information for independent insurance agents about issues at the confluence of technology, consumerism, marketing and agency practices. Subscriber benefits include free trial evaluation of new products and programs.
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Times are tough. Lay offs, foreclosures, and consumer confidence at low ebb. All that results in lower inventories and payrolls, fewer new cars in the driveway, and anemic real estate activity. A little closer to home in the local insurance agency that means renewal premiums are down and customers are more price sensitive than ever.
It's always important to stay in touch with your customers, but especially in a down economy. If you have a chance to intervene before a customer defects, you can usually prevent lost business. But you need to know a customer is thinking of leaving before it happens; that's where staying in touch comes in.
Consumers and businesses are looking for every way possible to cut their expenses. And you know there are good and bad ways to do that with insurance policies. This is not the time to cut coverage. Desperate times call for desperate measures, and many more people will see lawsuits as a way to fill an income gap (and the personal injury lawyers and referral services are launching more and more ads to make that suggestion).
This economy has presented most insurance agents with a double edged sword: Consumers more likely to leave or cut important insurance coverage, and a reduced agency budget for customer contact programs. But this is not the time to throw your hands up in despair. This is the time to make some changes, and start doing more with less. You can significantly increase customer contact and reduce costs. Here are some ideas that will help you out.
Remember all those email addresses you were going to collect? They sure would come in handy now. If you have them and are sending an e-newsletter, good for you. If you don't have the addresses, see Phone Campaigns below. Email marketing isn't as effective as it used to be because of in-box overload and the shift to texting and social networks as preferred communication methods. But ROI is still good because costs are low. If you want to save, use your website content as the basis for newsletter features rather than license a third party service. But be aware of the prevailing consumer mindset; people are less interested in more protection than they are in saving money. Be sure sure your newsletter adopts that theme. And be sure to give people a way to contact you directly from the newsletter email.
Remember, we need to find out what customers are thinking: 'should I stay or should I go?' Sending out annual review forms, whether in paper or online is fine for the 25% - 35% you get back (although paper and postage cost money, and you should think about cutting this expense). What about the majority you don't get back? What are those customers thinking? You need to follow up with something more than 'we will assume there are no changes' message. Send a link to an article on your website about economizing insurance costs, or to a video about the dangers of reducing coverage. You probably do personal reviews with some of your clients. Time and cost constraints have always kept you from performing reviews with all your clients, and now those constraints are even more, well...constraining. Web conferencing and pre-recorded streaming video of review-type presentations allow you reach out to more customers without spending any additional money. Use these tools to do group sessions or to push recordings out to non-attendees. The time has come to branch out.
Surveys are an excellent way to find out what is on customers' minds, and there are several excellent, free tools like SurveyMonkey and PollDaddy for putting an electronic survey together. But be careful about what you ask. If you aren't prepared to change your office hours or add parking space, then don't ask about those things. Be ready to share survey results, and let customers know what changes you have made as a result of their survey participation. Include at least one question that will tip you off about price sensitivity; for example:
Please choose the statement that most accurately describes your feelings about insurance:
- I need to balance good protection with cost,
- I cannot afford to be under-protected,
- Since I'm forced to have insurance, I want to spend as little as possible on it
Follow up by phone with as many of your customers choosing answer 'c' as possible. Don't start the conversation with, 'Your survey results indicate you are a cheapskate', but something like this, 'We are following up with a few of our customers to thank them for completing our survey. Would you like to schedule a few moments to review your needs and see if we can reduce your premiums by changing deductibles or combining policies?' One more thing. Keep the surveys short - five or six questions, a lot more will be completed.
I know a number of agencies who routinely call their customers to thank them for doing business with them. Some agencies have account managers call a select number of renewals each week, and some do a big, all-hands-on-deck after hours call-a-thon over a few days. I hear the same story from everyone: the agencies delight their customers with this unexpected thank you and many customers place additional coverage with the agency. This is also an excellent opportunity to update contact information (ahem! email addresses...).
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