Most (if not all) insurance agents have heard the sentiment “don’t poke the sleeping bear” when it comes to renewals - especially when there’s a lovely little rate increase along with it!
If you’ve felt like this is the way to go, that’s alright! I can tell you from my own experience in life that avoidance isn’t a viable long-term strategy for…pretty much anything.
That absolutely applies to rate increases for your customers.
Take just a few minutes to consider the benefits of transparency with your customers via proactive renewal calls.
Here’s why you should poke the sleeping bear.
Relationships over Transactions
People choose to go with a local insurance agency over buying insurance online, in large part, because they want to have a personal relationship with an agent who will look out for them.
While getting insurance online is convenient, that convenience makes things strictly transactional.
To compete with large Insurtech companies and small insurance agencies in your area, you must have more than a transactional relationship with your customers.
Instead of assuming your customers would like to renew, call them before their renewals to see how they feel about the policy and whether it will continue to meet their needs.
This makes it abundantly clear that you’re not just after their premiums, but that you care about them - you care about providing the coverage that matters.
Calling to discuss a renewal with your customers - specifically when their rates are increasing - is the confident move you need to make.
Agents have typically been afraid to “poke the sleeping bear” when rates increase in hopes that their customers don’t mind.
In this economy?? People mind.
BUT that doesn’t mean that they won’t renew.
Your proactive communication about the upcoming rate increase tells your customer you’re confident in the product.
It shows them that you’re not afraid to be transparent.
On the flip side, when you avoid the renewal call in hopes of dodging an awkward conversation or cancellation, it can come across to your customers as a sneaky business tactic.
You can be sure that they won’t be with you much longer if they see you in that light.
Not to mention, feeling fooled or taken advantage of by any business is sure to lead to negative reviews online or by word of mouth.
Bigger "Bang for your [Agency’s] Buck"
According to Agentero, signing a new customer costs the average insurance company $500. On the other hand, maintaining a client costs about $25 a year. (Agentero)
As we’ve often discussed, the insurance industry has the highest acquisition costs of any industry, costing 7-9 times more to attract a new customer than to retain one. (IIA Dallas)
To recoup those acquisition costs, you’ll need to ensure your clients renew after the first term. (Lexis Nexis)
Okay, but what do all of these statistics have to do with renewal calls?
Client Circle found in a recent study that, of clients that leave their agent, 81% say it’s because “they lack regular and meaningful communication” with their agency.
A renewal call is just one of many ways to provide the meaningful communication that your customers want from you.
Calling to discuss options for their renewal and potential needs means a lot to customers, and they’ll stick around if your agency gives them regular, meaningful communication, especially regarding their money.
And when your clients renew, your agency profits without having to spend even more in acquisition!
Get More Referrals & Online Reviews
If you’re contacting your customers about renewals, chances are, you’ve implemented a proactive outreach strategy at your agency.
When your customers are accustomed to that regular communication, the renewal call can be a perfect time to ask for referrals or online reviews! (Smart Financial)
When you call your long-time, loyal customers about renewals, you’ll find plenty more opportunities in the call than just the renewal.
Your customers who stick with you and have multiple policies are the customers that will be more than happy to refer you to someone or, at the very least, give you a positive online review.
In conclusion, if you’re guilty of opting not to poke the sleeping bear when it comes to renewals, don’t worry! We’re all learning as we go.
Consider instead, to take this opportunity to build better relationships with your clients, increase retention, and get more referrals and online reviews by implementing proactive communication - especially when rates increase upon renewal.
We’re excited to now be offering a Retention Rate Increase call at Engagex! It’s a pay-as-you-go package with no contract.
If you don’t have the capacity in your agency to make proactive calls, outsourcing is a viable option - and much cheaper than hiring another staff member to make these calls.