2024 is shaping up to be a tough one for insurance agencies. GDP growth and increasing inflation will continue to impact the insurance sector. There is a 3.9% unemployment rate to consider and shifting consumer sentiment. These factors may have played a big role if you struggled to keep your agency on track this year. This means it is time to re-focus your daily operations around your existing customers.
For your insurance agency, customer retention is the key to success during tough times. You still need to acquire new accounts, but when you retain your existing customers, it’s easier to weather the coming storms.
This is especially important, considering that modern insurance customers have many choices. They do not have to stay loyal to you because another insurance agency can provide the same coverage. And they could even receive that coverage at a lower premium. So, how do you build loyalty by retaining customers? An often-overlooked strategy is sending out automated renewal reminders. Something as simple as sending out a reminder on time can help retain customers without doing anything more.
Customer Retention Is a Challenge In the Insurance Industry
Customer churn (losing customers) has always been a challenge in the industry. Additionally, it costs agencies five times more to gain a new customer than to keep an existing one. This shows how serious this situation can become. If you start losing customers and have to fork out more money to attract new ones, you will soon have a massive problem.
Customers leave insurance agencies for several reasons. These include the following:
- Price: When economic times are tough, people tend to scale down on insurance. This means they will start looking for cheaper options and switch to another provider if they offer a better deal.
- Radio silence: This is very common in the insurance sector. Once a customer is signed up and their first premium goes off, they do not hear from the provider again. Until the renewal date comes around, that is.
- Complicated renewal process: Some agencies have not upgraded their systems to include an automated renewal process. This can lead to frustration because customers cannot renew their coverage easily. Instead, they have to go through a long-winded process, which may cause them to go elsewhere.
- Poor customer service: This is another big reason why customers jump ship. A single negative customer service experience can cause a customer to cancel their policy and find another provider.
The Importance of Automated Renewal Reminders
This is why automated renewal reminders are crucial for your agency. You can offer your customers something new (and affordable) each time they upgrade. It gives them more value for money. You can also simplify the renewal process, reducing frustration. Automated reminders typically come as a feature of a modern agency management system. So, if you upgrade your outdated system, you will get this functionality at no extra cost.
When you offer your customers a modern insurance experience, you motivate them to support you. This means by having something as straightforward as a timely renewal reminder, you can:
- Increase renewals: Reminders are a friendly notification to customers to continue with their existing policy. Your customers are busy people, too, and they will appreciate the nudge to prevent an unintentional insurance lapse.
- Boost engagement: You can use automated reminders as a channel to stay in contact with your customers. You do not only have to remind them to keep paying once a year. Employ these reminders as marketing messages to promote time-sensitive and limited insurance offers. Or use them to remind customers how your claims process works. Subtle changes to reminders can make all the difference to customer engagement.
- Reduce the cost of admin: Automation will allow your agents to focus on other tasks.
- Upsell when appropriate: When introducing new products with your renewal reminder, you increase the chances of upselling.
How To Make The Most Of Automated Renewal Reminders
Sending reminders does not mean sending a bulk email to your customer base. You have to personalize each reminder according to each customer. Using the right insurance agency management system makes this easy. Management systems constantly analyze data to help you tailor your reminders. You have all the information you need, like existing coverage and previous claims, to help you generate the perfect reminder. You can use email, text, or even a good old-fashioned telephone call to remind your customers their renewal date is coming up. When it comes to communicating with your customers, using the right channel at the right time is crucial.
The Best Time To Start Using Renewal Reminders is Now
If you have not yet upgraded to an insurance agency management system with the ability to automate these reminders, now is the time. JenesisNow is one of the most trusted and reliable management systems available today. You can use it to create automated reminders on time while enjoying several other exciting features. With the right system, you can improve customer retention and ultimately help your agency succeed. Interested in seeing more? Request a demo, today!