Most insurance brokers work hard searching for the next client. If this sounds like you, it’s time to work smarter, not harder. Some of your best prospects are the ones you’ve already developed a broker-client relationship with. Instead of spending a lot of time and effort looking for your next client, try looking back at the last five clients you worked with.
Client Retention vs. Acquisition
You’ve probably heard some of the statistics on customer retention versus acquisition. According to Harvard Business Review, various studies have shown that acquiring a new customer can be five to 25 times more expensive than retaining a current one, and increasing retention by 5% can increase profits by 25% to 95%.
It makes sense. You know how hard it is to develop a relationship with a new client. If you’re losing clients, you’re losing revenue.
Client retention is vital strategy – and you probably already know that. But if your client retention campaigns are focused solely on renewals, you’re missing a huge piece of the puzzle. Cross-selling should be part of your retention strategy, too.
Your Clients Need More Than One Type of Policy
Let’s say you sell a client life insurance. That’s great – but more specifically, that’s a great start. Life insurance gives your client some financial protection, but it doesn’t protect them against all risks. They need other insurance products, too – like disability insurance. If you sell it to them, you get a commission, and your client gets important coverage.
Now think about what might happen if you don’t make the pitch. Here are two possible scenarios.
- Scenario One: Another broker offers your client disability insurance, and your client accepts. You’ve missed out on a commission. Even worse, your client might decide to go to the other broker for future insurance needs. By not offering more options, you’ve given your competition a foothold.
- Scenario Two: Your client experiences a disability and isn’t covered. As a result, your client suffers financial devastation. Your client may blame you for failing to offer disability insurance, and you could even be hit with an errors and omissions lawsuit.
Focus on Your Last Five Clients
According to McKinsey, cross-selling and category-penetration techniques can increase sales by 20% and increase profits by 30%.
Cross-selling is a proven technique in many industries, including insurance. Instead of struggling to find new clients, try focusing on the last five clients you placed a policy for. What other insurance products do they need? Help them get coverage – and help yourself get a commission.
Are you ready to boost your sales with 12 effective cross-selling techniques? Download our cross-selling guide now.