Customer service is one of the most important aspects of an insurance company’s profit — especially when it comes to the long term. It’s not much help to be great at sales unless you also have great customer retention.
Perhaps you feel that you’re already great at customer service, or maybe you realize that you could use a little work. The reality is that customer service is important enough to always be a work in progress for nearly everyone, no matter your current skill level. Most insurance companies have a retention rate of 84%, but it's possible to raise that rate to 95% by using better customer service practices.
It’s not always easy for a company to gain a 10% increase in profit (or more). But imagine if you can do so by simply handling customer interactions in a better way. Think of customer service as low-hanging fruit — it doesn’t take a lot of extra effort to improve, but the payoffs can be dramatic.
For example, you may not realize, but it can cost five times more money to find a new client than it costs to keep an existing one. That means that if you don't prioritize customer retention (through great customer service), then you’re missing out on profit.
Using great customer service techniques (and attitudes, most importantly) leads to a dramatic increase in company profit. According to Bain and Company, a global consulting firm, If you increase your company’s customer retention by 5%, that can lead to a 25% increase in overall yearly profit.
Additionally, people talk about both their positive and negative experiences. If you treat someone to a sub-par customer experience, that could obviously lead to you losing additional clients. However, treat someone well, and the opposite occurs. A HubSpot survey showed that 68% of people say they would pay more to be with a company that offers exceptional customer service. This means that along with your profit increase on improved customer retention, you could actually make your word-of-mouth referrals sales increase, as well.
If all this isn’t enough, 84% of companies that have put in the effort to deliver better customer service experiences for their customers have reported an increase in profit. How much profit will depend on your book of business size, but there’s no denying that a little effort toward customer service goes a long way in the long run.
The most important thing to remember is that customer service is a long game. It will take some time for the monetary value from your extra effort to show up since you’ll see most of the results when customers start renewing their policies.
There's no need to get dramatically better by tomorrow. Simply pick one of the following topics at a time, and dedicate yourself to small, 1% improvements per day. Then, never stop improving.
By far the best customer service “method” that you can use is compassion.
When working in any given career for an extended period of time, it’s easy for the work to become routine. Even situations that may seem emotionally intense to others (such as a home claim or car accident) can become just another day at the office for someone in that environment every day.
It’s not that you have to become more emotional to develop empathy for others. Before interacting with anyone, whether their situation is emotionally loaded or not, simply remember what it was like to be in the world of insurance on your first day. Step back for a moment to before you knew as much as you do now — before insurance lost much of its mystery to you. Going back to that time will help you see things from your customer's perspective.
Compassion shows itself in many forms. It’s more important to focus on becoming compassionate than the specifics of how to express it. For instance, we can tell you that you should:
But the truth is that any action you take to “show that you’re compassionate” will fall flat unless you actually have compassion. And if you’re focused on having compassion with people, every action you take will reveal that positive attitude to others.
In our modern-day world, we’re used to things getting done fast. When we want it, we want it done, now. Yet there’s another element to “getting something” that’s just as important but far less utilized in our speed-driven times. And that is the idea of thoroughness or completeness.
In other words, when someone leaves a message, sends a text, visits your office, or leaves a voicemail, of course you should get back to them quickly. But when you do, give your best effort to delivering to them every part of their request the first time. Attention to detail means a lot to people. It shows them that you care and that you’re handling their account with a high degree of professionalism.
Alternatively, lacking in timeliness and thoroughness is almost a sure way to lower customer trust in your agency. And that lower trust means lower retention.
True customer service is becoming an increasingly rare experience nowadays because much of what people experience when interacting with companies has become increasingly automated. There’s nothing wrong with automation. It’s great in its own way because people at least know what they’re getting and their expectations are solidly met. But what if, for the opportunities you personally have to interact with customers, you take the chance to not simply meet their expectations, but to exceed them?
It’s easy to promise something. And if you’re a professional, you’ll certainly deliver on that promise. But that’s just the beginning. Is there a way for you to instead deliver more than what the customer expects, or to deliver it sooner? It’s very rare for someone to feel like they’re the most important person in someone else’s world, if even only for a moment. Because such a high level of service is so rare, it creates a real opportunity for anyone looking to increase their business.
One very tactical way to increase your over-deliverability is to actually promise a touch less. Here’s the thing, If you’re certain you can deliver a complex quote or update within 10 minutes, and promise a prospect that you will, but then an emergency comes up, that looks bad on you. Why not promise you’ll get it done in 20 minutes? That way, if something comes up, you’re still set. If nothing comes up, you finish in the 10 minutes you’d originally planned for — and you look like a hero to your customer.
If you have a large book of business, utilize a CRM (customer relationship manager) program or another tool that works for you to remember people’s names, important dates, and important things about their lives. Then, use that info to connect with them in every interaction you have.
When greeting someone at your office, say their name (it’s every person’s favorite thing to hear). When sending an email (even a mass email), utilize your emailing software to make sure each individual email specifically says each individual person’s name.
Send emails on people’s birthdays, anniversaries, and holidays. When talking to people on the phone, ask about their family or important events going on in their world. Treat them like a friend with whom you’re excited to reconnect, not just a customer who pays your bills.
As we mentioned earlier, the monetary value of improved customer service shows up during customer renewals. In the meantime, though, you still want increased sales and profit. That’s where Nectar comes in. We offer real-time leads so you can begin scaling your business today. Our leads are people actively looking for insurance you offer, and are available for you when you’re ready to begin taking them.
After all, you want to gain every advantage you can in today’s insurance marketplace. So, start improving your customer service. And along the way, take a look at our insurance leads so you can keep selling without all the hassle of chasing your own. The larger your book of business is when you start improving your customer service, the greater impact it will have on your profit and revenue.
This article reflects the features of Nectar as of the date of publication. Features are subject to change at any time. This article is meant for informational purposes only, it is not a guarantee that using Nectar will help you achieve specific business or financial results and is not intended to serve as the sole recommendation for any business financial decisions.