There is a fundamental principal in sales and marketing that says that it costs as much as 5 times more to acquire a customer than to retain an existing customer. Although it is incredibly difficult to quantify that for every market and every company, it is true that you will spend more time and effort acquiring a new customer than you will retaining one.

Why? Take a look at your sales funnel.

Your agency’s marketing objectives for acquiring a new customer start at the top with the entire available marketplace. From there, you must attract and engage leads (lead generation) and then build a lead nurturing strategy to convert those leads into qualified prospects, and ultimately, sales. That sure is a lot of time, effort, and money.

Is there an easier way for your insurance agency to grow its book of business?

How about round-outs and referrals? Those are great.

But if you only focus on those two pieces, you are missing out on the bottom of your sales funnel: retention of your existing customers.

Statistics show that you have a higher chance of selling to existing customers compared to new prospects. For the insurance industry, this is great news. You have a product that works incredibly well when it comes to rounding out accounts with additional services… that is, if you know how to properly retain your customers.

Customer Retention and Loyalty

Put simply, customer retention is how your insurance agency will create and maintain customer loyalty. In a world where information is abundant and options seem infinite, this may seem easier said than done. However, this is an incredibly important part of your sales funnel that you must not overlook.

The bottom line for retention: loyalty.

According to marketing expert Philip Kotler, you have four different customer-types when it comes to loyalty:

1. Hardcore Loyals – This individual will buy the same brand all the time (The ideal customer for any brand).
2. Split Loyals – Individuals who are loyal to two or three brands (For the local insurance agency, this is not an ideal customer).
3. Shifting Loyals – These individuals will move from one brand to another. This may be dependent on many factors (e.g. price, customer service, availability, etc.).
4. Switchers – No loyalty whatsoever.

Your customer retention strategies are going to be equally as important as your lead generation strategies. When you think about it really, what is the easiest way to grow your insurance agency’s book of business? Don’t lose your current customers.

Retention Marketing Strategies for Insurance Marketing

With all of that in mind, how can you create a retention marketing strategy that works for your agency?

• Stay Top Of Mind With Your Customers: Regular communication with your current customers is imperative to your agency’s success. You can do this with automated email campaigns, birthday messages, text message marketing, newsletters, blogging, social media marketing, and other forms of inbound marketing you are already utilizing.
• Develop A Customer Referral Program: Find a way to reward your customers for being a fan of your agency. This will keep them loyal to you, and help your agency find other individuals who are similar to them to grow your book of business.
• Hold A Contest: Similar to your referral program, find a way to get your customers involved with your agency.
• Get Involved In The Community: Your agency can, and should, take advantage of the local community you are a part of. This will give you access to a whole different set of individuals and showcase your good deeds to your current customers.

What are some more advanced retention marketing objectives your agency can take advantage of to enhance the bottom of your sales funnel? Download our Strategy Guide on Retaining Your Customers and register for our July 9, 2014 webinar today.