Episode 338: Retention Is Won Before The Renewal

Welcome to the Scale Your Insurance Agency Podcast. This podcast will give you all of the tools to scale your insurance agency and live life on your own terms. Wherever you are today, if you're stuck or well on your way to the success you desire with the right people, processes, and promotions in place, you will be unstoppable. And now I'd like to introduce your host, Mike Stromzo.

If your retention strategy begins when the renewal hits, you're already too late. Let me say that again. If your retention strategy begins when the renewal hits, you're already too late. You're late to the party. Today I want to share with you information that you need to know about the wealth of your business. And look, I know, I hear everything that's going on because we serve independent insurance agencies across the nation. And there is a lot of squirrely things going on right now. And I get it, and I get it, and get it. But it's still opportunity, opportunity to get better, opportunity to serve people, opportunity to protect people. So don't do it just once a year. How would that work out for you if your spouse, significant other, family member, whatever, whatever, only heard from you once a year? How would that work out? Not very well, right? Is that a relationship or is that a convenience that's based on your time frame, not theirs? If your retention is not what you want it to be, that's because you're showing up too late. And today I want to take you through some strategies to make sure that that does not happen to you. Our goal is to make sure that you maximize your full potential in every way. And that starts with your acre of diamonds. And the greatest value in your agency is your existing client base in your acre of diamonds. And I'm not suggesting for a minute, just for clarity purposes, that you discard pursuing new business. I'm not saying that at all. But don't lose sight of the priority. Because I've shared with many of you, and I'll share it again today, the super simple business plan. Get clients, which is new business, and keep clients, which is your existing business. And when you put those two together in the right way, then you can maximize your abilities. So here's point number one that I want to share with you today. Stop treating the renewals in your agency like it's an event. It's a full-time process. So you should have activities going on around the calendar year to make sure that you're building strength of relationship, building depth of relationship. Because, you know, too many agencies think that, oh, we got the renewal, now we're going to get to work. That's not the way it should be. Stop thinking that it starts 30 to 60 days before the X date. It doesn't. Retention begins. Continuing that relationship begins the day the relationship starts. That's why we teach a welcome kit. That's why we teach client nurturing. That's why we teach ongoing communication, including the telephone. I can't tell you how many times in the last 30 to 60 days this has come up. Email and text is for information. The phone, Zoom, face to face is for communication. So many mixed messages. I thought your email meant this. I thought your text meant that. Well, you're leaving up to assumption, which is not accurate. Sorry, I'm off track. Onboarding policy delivery, proactive communication. There we go. Proactive communication. Telephone. Zoom. Face to face. Account reviews, not renewal reviews, account reviews. If you say you're going to do an annual renewal review and you miss one and they have a major loss, who's on the hook for that? We started calling the account reviews a lot of years ago. Claims experiences, education, relationship building, deep, significant, meaningful relationship building. And all the ongoing touches create emotional bank deposits, is what I came to years ago. You're making emotional bank deposits in the relationship every time you have one of those touch points. Emotional bank deposits. How often are you making them? That's why we had people coming back time and time and time again. Hey Mike, I just want to let you know, you're a little bit more. I check around, you know, once every three years. You're a little bit more than some others that I found, but it's not worth leaving. Good place to be. Or can you take a look at this quote? Because I trust you. Are you trustable? Are you doing what it takes to be trusted? Then when that difficult renewal happens, when that difficult non-renewal happens, when that difficult premium increase happens, and I know they're happening, you've earned the opportunity to have the conversation. You're always a welcomed guest, never an annoying pest, because you keep showing up often, not just when, all right, just when you want money. I hear it. I hear it all the time. From consumers, from my friends, from people I go to church with. Lots of people in my world. I hear it all the time. I only hear from my agent when they want money. I said, what time is that? When my policy renews, because I know they're gonna get paid again. Don't let that be you. Huddle with your team. Get somebody on board as the owner of the relationship building department and your agency. Don't build loyalty when the premium increases thirty percent. You discover whether you've built loyalty during the previous eleven months. Let me repeat that one again. You don't build loyalty when the premium increases thirty percent. You'll discover whether you've built that loyalty during the previous eleven months. Make sure that you're making those emotional bank deposits. Point number two. Price becomes the issue when it's invisible. Price becomes the issue when value is invisible. Price becomes the issue when value is invisible. You know, the tagline that I came up, or elevator offer, whatever you want to call it, that I came up with years ago, was simply that's why I'm proud to be an independent insurance agent. We don't we work for you the customer first. We don't work for any insurance company. We work for you the customer first to bring you the best value for your insurance dollar. We shop the entire marketplace to make sure that we bring you the best value for your insurance dollar so you can build a relationship with your local independent insurance agent who you can trust. Now, I know that was a little all over the board, but you got the meaning. Use the context. Price becomes the issue when value is invisible. You see, customers are experiencing all kinds of things right now. For the last three years, four years, they were experiencing significant premium increases, aka the hard market. I've had multiple conversations with agencies recently that have commented on that. They said, man, I like the hard market more than the soft market because they're in a very soft market right now. There's pockets in the U.S. where the market is extremely soft. And there's carriers clamoring for business. I was on with an agent a couple of days ago. Uh, he was talking about how soft the market is in his southeastern state. He goes, I've got carriers coming saying to me, we want business, we want business. We got too many carriers that want business right now because the market's so soft. I mean, while that's not a bad thing. Back to our existing book of business. When the premiums are going down, what else is going down? Okay. So whether customers are experiencing significant premium increases or other premium decreases, it's going to cause them to think about wow, if my premium went down, what else is out there, right? Today's consumer is smarter than they've ever been. Why? Because of online technology. Period. And they're going to figure out, because especially if they've been paying elevated premiums for the last three years or four years, I've been taken in the shorts. I'm going to see what I can do to get some of that money back. Maybe. I don't know. But agencies make a mistake when they immediately turn the conversation into let me see if I can find something cheaper for you. You playing on protection or are you playing on price? If it's all about price in your head, then it's all about price. I had a producer on our team for too many years. Too long. He just could not get it out of his head that insurance was all about price. I did everything that I could to train and train and train again. He just couldn't get it out of his head. Well, the premium, I said, it's not about the premium. It's about the protection. Let me give you a takeaway on that, by the way. One of the greatest lines that I came up with in my days, somebody came in with uh their policies uh from a direct writer. They owned a home and they had $25.50 on their auto policy, and I was like, you're all mine. I said, let me ask you a question, Mrs. Consumer. When you hear the word insurance, what's the first thing that comes to your mind? Protection or price? See how I positioned that protection first? Don't make the mistake. Let me see if I can find you something cheaper. It's not about price. Now you've unintentionally taught the consumer that your primary value is price. If you say that, you've unintentionally taught the consumer that your relationship and your value is all about price. Is that where you want to be? Instead, continually demonstrate why the agency provides advice, advocacy, coverage expertise, risk management, and risk leadership, claims guidance, market access, proactive reviews, not reactive reviews. In other words, you only start acting when you get the renewal. Don't do it. And someone who actually knows the client's name. They're not just a number. They feel like you know who they are. You see, if the only value that the client understands is the price of the policy, don't be surprised when price becomes the reason they leave. Hmm. If the only value your client understands is the price of the policy, don't be surprised when price becomes the reason they leave. Point number three, proactive communication changes difficult conversations. Proactive communication changes difficult conversations. The first thing that comes to my mind when I think about that, we had a rule in our agency. If you've got a non-renewal or a negative underwriting memo or advisory on a Wednesday or Thursday, you are to pick up the phone and call the client. Pick up the phone and call the client. I mean, any day of the week, but especially those days. Why? Because the advice to the client directly from the company is going to come on Saturday. And when do people open their mail? Well, in today's world where you have dual income households and everything else, they generally open their mail on the weekends. That's what I do. And then they see the negative notice. And they're sitting there grinding on it all weekend, just chomping at the bit to contact you on Monday and let you have it. Doesn't start the week off well either. So that's why we had the proactive rule. Just tell them, hey, just want to let you know I got the notice from ABC Company. We are on top of it. We've already got action in place to resolve the issue. Nothing to worry about. Enjoy your weekend. We will be in touch. By the way, uh, what's the best way to reach you? Phone, email, text. How would you like us to reach out to you with a resolution? A video? Happy to do it on your terms. Imagine the difference an agency makes when you do it the right way. Because one of the worst client experiences that can happen, one of the worst client experiences that can happen is discovering a major increase when the renewal arrives without you having contacted them. Some way, somehow. And if you've got more clients that you can handle, try a video. Try a video out to the entire client base just to give them a heads up. Hey, we just wanted to let you know. Continually educate them. Imagine the difference it would make when an agency reaches out first with something like this. Hey, Mike, I just wanted to give you a heads up. We're seeing significant changes in the marketplace right now, and your renewal might be affected. We're already looking at it, and we'll walk you through the options as soon as we have everything we need for that discussion. We just wanted to let you know. If you have any other thoughts, comments, or questions, please do get in touch. We are proud to be your local independent insurance agency of choice. Now, how does that feel when a customer who you have a deep, ongoing, significant relationship with hears that? Good, right? Same rate increase, same change, completely different experience or decrease for that fact. One feels reactive, the other communicates, we got you. And that's what people want. They just want to know that you've got them. That's what they care about. When they're hanging out there in la la land with no communication, flapping in the wind, that's when they start to wonder. I wonder if my agent cares. I wonder if they're still around. I wonder if they're doing their job, et cetera, et cetera, et cetera. This is where the ongoing work towards client relationship building and year-round communication with workflows, automated communications, offline communications, real human conversations can all work together. That's why we built in the ways in our 29 touch points. Yes, we touch our customers 29 times a year. More on that sometime soon. Remember this bad news doesn't improve with age. Bad news does not improve with age. Next point I want to share with you today. Define the client experience, then systematize it. So the old adage that I learned years and years and years ago when I studied marketing to become expert at marketing. As marketers, we test. As marketers, we test. So test the customer experience that you want to create and then systematize it. You know, I got a piece of advice back when I was beginning in my agency ownership journey. And I had multiple offices. I had bought an agency, and I was struggling because we had six kids at home. I was never home. My wife was taking it all herself, and she said, I can't do this anymore. I need more of you. And so I had to make a decision. And so uh there was a longtime family friend and attorney uh who checked in with me one day, he goes, Mike, how you doing? I said, I actually'm struggling greatly. He goes, What's going on? And I told him, and he said, So what are you going to do about the business? I said, I think I need to close one of the offices. That that seems to be the right answer because nobody in, there's nobody in either office that can really take the lead while I'm not there. I said, Do you have any ideas? He goes, Yeah, I've got an idea for you. Why don't you call your 10 best clients who you have depth of relationship with, who you know you can trust, and tell them that you're thinking about closing the office in this town and see what they say. Because it was obvious which one we would keep and which one we would close. One was in a large, getting ready to explode area. The other one was in a small, sleepy town, which happens to be the town that I live in still. And so I called all 10 clients. And all 10 of those clients said, Mike, our relationship is with you, not where the agency is located. Let us know what you're gonna do. That made the decision so easy. So that the lesson there is your agency customers who you know and they know, love, and trust you are a great resource to ask questions. So ask them, what experience would you like to receive every year? Just toddl with them. Find out what they want to experience. How often should we touch you? How do you want to be touched? And everybody's different. So, I mean, there should be data in your data agency management system or whatever you have. By the way, I was working with an agent this week who doesn't have agency management system, CRM. They built it all into one proprietary technology. Stay tuned on that one. Do you get the same answers? If not, you don't have a client experience. You have individual team members just doing their best reactively. Okay. So talk to your customers about this. What are you receiving now? What would you like to receive, et cetera? And then just define the experience from prospect to onboarding to welcome them to the agency, to the ongoing client nurturing and communications, to the account review time, which should happen at touch points throughout the year, to the actual renewal or relationship continuance, if you will, to claims, to referrals, to them becoming an advocate, to them becoming a raving fan. And that's what you want: a bunch of raving fans running around out there on the world telling everybody that will listen about your agency. Goal for you. Once you have these conversations and determine and begin to whiteboard, if you will, how you're going to create your system. Determine what touches should be automated and what touches should be should include human interaction. And you should have a sweet mix of both, online and offline, or digital and offline. Should have a sweet mix of both. By the way, slide broadcast, slide broadcast voicemails, the ringless voicemails, those are a great option for the human touch when you can't do it one at a time. But make sure it's your voice that's doing that. Technology should create the consistency and eliminate unnecessary work so your people have more capacity to have the conversations where human interaction matters the most. When technology does the work of machines, people finally get to do the work of humans. That should be our operating goal. Here's the key takeaway for this point. You cannot consistently deliver an extraordinary customer experience that you've never defined. You cannot consistently deliver an extraordinary customer experience that's not been defined. You've got to design it and define it before you can deliver it. And then with your teammates, it involves training and accountability and ongoing rinse and repeat, rinse and repeat to make sure that you get it just right. My last point for you today on this one: account reviews should create value, not just check a box. Account reviews should create value. It shouldn't just check a box. See, a proactive account review isn't. Hey, has anything changed? Nope, great, talk next year. You never want your customers to have that feeling. Every conversation, every touch is an opportunity to uncover exposures, cross-sell opportunities, to educate the client, to update information, to strengthen the relationship, to generate referrals, to earn the right to be referred. And demonstrate why having a professional, local, independent insurance agency is the absolute and only move for them. And this is back to leadership and training. Leadership and training. That's how this happens. But there's also a powerful benefit attached to that. The more deeply you understand and serve the customer, the more deeply you understand and serve the customer or the business owner, the harder the relationship becomes to commoditize. You never want to be a commodity, aka price leader, serve the customer. The goal isn't simply to add more policies. The goal is to create complete relationships or complete accounts. In our agency, at the end of the quarterly state of the agency addresses, I would always end with a picture. And the picture was of one of our customers. Was one of our customers who wrote a check to nobody else except our agency for any business, personal, any type of insurance. We were the only ones. How many of those do you have in your books? They write a check to nobody else but your agency for any possible insurance need. Now, obviously, if you don't do life or Medicare or whatever type of insurance, you get the pass on that. But the rest of it. Yeah, I'm thinking about a good friend of mine, Sean, who taught uh at one of our mastermind sessions a few years ago. He challenged the room that day. Raise your hand if you have monoline policies. Bunch of hands in the room went up in the air. He goes, I want you to go back to those customers when you get back to the office, and I want you to call them and say, hey, we don't have all of your policies here. I want you to do one of two things. I want you to give us an opportunity and bring all of your policies to our agency. And if you don't want to do that, I want you to take what you have with us and go take it and put it with your other policies. Go to the other agent. I said, bold move. I asked the room, I said, how many people are willing to do that? One singular hand went in the air out of some 80 people in the room.

What's your answer? Don't be the one.

Anything change? Nope. Great talks next year. Build depth of understanding. Serve the customer. Because the more you do that, the harder the relationship is to commoditize. Remember, don't be thinking and don't talk with your team. How do we save this renewal? No. Start talking like this or start saying this and start having these discussions with your team. What experience are we creating throughout the entire year that makes our best clients want to stay? What experience are we creating throughout the year that makes our best clients want to stay? That makes our best clients want to continue the relationship. Continuing relationships, ongoing relationships for a lifetime, they are one through hundreds of small moments where you communicate before you're asked, you educate before there's a problem, you identify needs before they're discovered by somebody else or by something else. And where consistency reminds your customers why choosing your agency was the right decision. Because your ability to retain your customers is one long before the renewal. So go talk with your team. What experience are we creating throughout the entire year that makes our best clients want to stay? Create that experience, design that experience, deliver that experience. So your clients want to stay and they want to refer you. One of my favorite laws, my law of 100, says that everybody knows 100 people that either come to their wedding or come to their funeral. If you've got 800 clients and they all know 100 other people, that's 80,000 opportunities. What more is it that you want? 80,000 opportunities. What more is it that you want? All the opportunity that you'd ever want is right there. Serve the customer. In the words of Earl Nightingale, serve the customer better than anybody else serves the customer. Design the experience. And you too will continue on your journey to the top. I will see you there. Thank you for joining us today. If you enjoyed this episode and you think somebody else might like it, ScaleYourInsurance Agency.com. Scale Your Insurance Agency Podcast.com. Anyway, search it. It's out there. And share it with them. So we can all reconvene at the top of the mountain.

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