Do you know who your most valuable clients are and exactly how much revenue they generate for the agency? If you can't answer this question, you're not alone. Many agents don't have a solid understanding of where the value lies in their books of business.
Identifying your highest revenue-generating accounts and using that to inform your sales, marketing, and operational strategies will help you avoid spending time and money on accounts that do not benefit your business.
So how do you go about identifying your most valuable clients?
1. Analyze Your Book of Business
First, you'll need to analyze your book of business to determine who your most valuable clients are. To do this, you'll need a list of all of your current accounts sorted from highest to lowest by annual revenue across all policies. Be sure to make any adjustments for connected accounts or other needed corrections and re-sort them from highest to lowest revenues.
Next, calculate the top 20 percent of the total accounts to determine your list of most valuable clients – the "A Clients."
Once you have clarity around who your most and least valuable clients are, you're ready to develop a retention strategy focused on retaining the very best within your book of business.
2. Develop a Differentiated Retention Strategy
In order to grow your business, it's imperative to retain the segment of your book that is most valuable, or your growth efforts will be diminished. Here are some of the key components to consider for your retention strategy.
UNDERSTAND HOW THEY FEEL AND WHY
Collecting and analyzing data and feedback from your best clients is a critical component of building your renewal strategy. You know the phrase, "you can't fix something that you don't know is broken"? In this case, you can't save an account that you don't know is unhappy.
Having a finger on your best clients' pulse allows you to be proactive in your retention efforts. It provides the opportunity for customized retention plans for your most important accounts.
There are many ways to solicit and collect feedback from client surveys to Net Promoter Score to anecdotal feedback given during client interactions. Technology and automation can make the collection and analysis process more efficient and easier to analyze.
Forward-looking technologies such as our DONNA for Agents platform can integrate with several different data sources to provide you with information on how your clients feel at any given point in time; we call this their SentiMeter® score. And we take this one step further by showing you why they may feel the way they do to react and adjust to retain the highest revenue accounts.
DEEPEN CLIENT RELATIONSHIPS
A direct correlation exists between the number of policies you have written with a client and the account retention rate – as the policy count rises, so does the retention and associated revenue.
Because rounding of accounts is so critical to your agency's retention and growth, you will need to design a formal process with your staff to systematically evaluate client needs and make offers for additional lines of business. All "A Client" accounts should be evaluated at a minimum at renewal for the need for additional policies and coverages.
New technology platforms exist that can help you more easily identify opportunities in the account. Leveraging the data that exists within your agency management systems and external data sources, DONNA compiles recommendations on upsell and rounding opportunities with your accounts, saving your staff time and helping to ensure no opportunity goes unnoticed.
Within DONNA, for example, you may see an alert when one of your clients purchased a new vacation home within an earthquake zone so that you can offer the proper coverage.
Layering your rounding efforts on top of the SentiMeter® score strategy we discussed above will allow you to time your rounding efforts around how the client feels at any given point in time. Presenting your offers to happy, satisfied clients will increase your close ratio and your revenues.
DELIVER A SUPERIOR CLIENT EXPERIENCE
Arguably the most important thing you can do to increase retention within your best accounts is to deliver exceptional service based on your clients' standards.
If you're leveraging the client feedback and satisfaction measurements we discussed above, you can use this to build, maintain, and refine custom agency service standards for valuable accounts. Managing your staff with these standards in mind will create consistently pleasant experiences for your clients, raising your satisfaction scores and retention and make it easier to sell additional policies.
To raise the bar on the client experience, you want to consider how you can create custom experiences for your clients based on a deep understanding of them and their needs.
You can do this through your regular communications with them and build a repository of information that you can utilize to personalize your interactions with them to establish a solid relationship. A traditional example of this is learning about an insured's family life and asking about college plans when you know one of their kids is graduating from high school.
To help with this process, you can also engage with technology platforms that help you anticipate client needs and have proactive conversations with them. Suppose you receive an alert within DONNA; for example, your client John may have purchased a boat or that Sally may collect rare coins. In that case, you're able to have a more informed conversation regarding their unique coverage needs.
3. Find More Valuable Clients
Segmenting your book of business allows you to more easily spot the commonalities that exist within your "A Clients" list. Using these commonalities, you're able to create a profile of your ideal client.
From your ideal client profile, you can create targeted, highly-optimized sales and marketing strategies to identify and gain more valuable clients efficiently and cost-effectively.
On average, client referrals close at 50-70%, well above the average close rate of all other new business opportunities, so asking for referrals from your current client base is a no-brainer. But who you choose to ask makes a big difference.
It's no secret that people refer to like-kind and quality, so why would you ask any of the "C Clients" for referrals? You don't want more "C Clients." You're interested in developing more "A Clients." Therefore, direct your efforts on developing a referral process focused on generating more of what you want, which are "A Clients."
If you've implemented the strategies discussed above, such as tracking client SentiMeter® score and delivering superior client experiences, generating referrals becomes an even more efficient and highly profitable activity. Leveraging just a few key pieces of information, you'll be able to quickly understand the right clients to ask for a referral and the right time to ask them for the referral, increasing your success rate.
For referrals to become a meaningful source of new business, you'll need to make asking for them part of your documented processes, and you will need to track and manage the results. For example, you may choose to build referral asking into the agency's renewal process as part of the producer's post renewal follow-up when confidence and sentiment towards the agency are high.
IDEAL CLIENTS ONLY
Similar to referrals, you can leverage your ideal client profile to direct your sales and marketing efforts by creating an ideal client profile and a target client list.
Having a defined target list and ideal client profile allows your sales team to focus their time and attention on developing opportunities that will add more "A Clients" and dramatically increase revenue without being distracted by smaller, unprofitable opportunities.
Maintaining and growing your most profitable accounts starts with understanding who your most valuable clients are and exactly how much revenue they generate for your agency.
Step one is analyzing your book of business to identify the top 20 percent of your total accounts to determine who your most valuable or "A Clients" are is an essential first step. Having clarity around who your most and least valuable clients are, is the prerequisite for developing a differentiated retention strategy focused on retaining the very best within your book of business. Without a focus on maintaining your very best clients, your growth efforts will be diminished.
Step two is developing a differentiated retention strategy with three key components:
- Understand how they feel and why
- Deepen client relationships
- Deliver a superior client experience
These components are more easily developed and executed using the data your agency has today with newer technologies such as DONNA.
The final step focuses on finding more valuable clients to grow the list of your most profitable accounts. By segmenting your book of business, you can easily spot the commonalities that exist within your "A Clients" list. And by using these commonalities, you're able to create a profile of your ideal client to create targeted, highly-optimized sales and marketing strategies to identify and gain more valuable clients efficiently and cost-effectively.
Click on the link below to watch our 4-minute video that talks about how you can leverage client data to improve your bottom line.