How much is a single customer worth to you? Is retention as important as generating new leads? To answer these questions you need to consider the lifetime value of your clients. To determine Customer Lifetime Value means to calculate how much profit you can expect from a single client over their lifetime. Granted, there is no way to accurately predict the behavior of any specific customer, but you can make inferences. By looking at your client base as a whole, you can statistically determine your retention rate and how much the group will spend. From there, it’s easy to figure out the lifetime value of a single client. Calculating Customer Lifetime Value (CLV) You need some basic sales information to get started. Gather things like your number of customers, average dollar per sale, average number of sales, and retention rates. Using those numbers you can plug them into one of the calculators for CLV available on the web. The data your receive back is valuable for a number of reasons. Do you know how much money you spend to gain a new client? How many dollars of revenue does that person need to generate before they are making you a…
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Competition within the insurance industry is fierce. There are over 150 different general insurance companies listed by Wikipedia. Each of those companies employs tens of thousands independent agents. Allstate, alone, lists over 15,000 agents. So, how do you stand out from the crowd? The best way to set yourself apart is to determine your value proposition. So, what does that mean? Basically, you need to answer the question, “Why should someone buy from me instead of my competitor”? Break it down even further and write a list of things you offer that others do not: Progressive offers a free comparison quote. Allstate offers “cash back safe driving bonuses.” Geico “saves you 15% on your car insurance.” Liberty Mutual promotes “accident forgiveness” Believe it or not, I remembered all of those without looking them up. Which brings us to Brilliant Way #1 you can communicate your value proposition. Use a Catchy Phrase That’s Easily Remembered You should have a list of reasons why a person should buy insurance from you and not your competitor. If you can’t think of any then you need help crafting a good marketing offer. However, we will assume that you have been able to identify at…
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What do we mean by vertical marketing? Visualize your marketing model as the root system beneath a tree. The trunk is the broad category of your industry, which then gets subdivided into narrower branches. These branches might be your specific services or product categories. For each branch, you have an ideal customer. Vertical marketing targets these smaller branches. It is sometimes referred to as niche or micro-marketing. The trick is to identify your ideal customer and then take advantage of untapped sources. Savvy marketers consider vertical marketing one of their most valuable marketing techniques. Advantages in Vertical Marketing There are several advantages to using vertical marketing. The ultimate benefit is separating you from your sea of competitors. Figure out what you offer that nobody else does. Target the audience that would be most receptive to that service or product. Then, as you learn your customer, you can better serve their needs. You speak the language of the market. Establishing credibility is a proven successful sales technique. Become the sector leader and gain brand recognition. You can do this with quality content. Videos and blog articles are good ways to communicate information from your website. Send out emails with updates and let…
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Last year I wrote about the importance of Account Rounding to increase insurance revenues. Since then we have continued to refine this idea of account rounding and have learned valuable information on how you can use account rounding to increase your business. To help you understand how this tactic can work for you, here are 5 Reasons You Need an Account Rounding Program for your insurance agency. Why is account rounding such a valuable tactic? There are several reasons that you should consider account rounding as a strategy for increasing insurance revenue. #1 – Account Rounding works for everyone. Every account we have worked with has achieved excellent results by using an email based account rounding program. The results vary between 6.7% and (hold your breath)… 19.7% conversions! By conversions, we mean ACTUAL SALES INCREASES! #2 – Account Rounding requires personal follow up. There is no question that to see optimal results, you need to be prepared to follow up with your leads personally. That can prove challenging. Who do I call? Are they receptive? The good news is that you can use the email results we generate as a lead-in to calling the more qualified individuals in your base.…
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When it comes to increasing insurance revenues, make sure you pick the “lowest hanging fruit” first. The perfect opportunity exists to cross-sell or up-sell your present customers. All you need to do is implement a tactic called account rounding. What is account rounding? It’s one of the most effective, but underutilized sales and marketing tactics available to every insurance agency. It takes your accounts, whether personal lines or commercial and convinces them to use more agency services. This alone accomplishes two objectives. It immediately increases your overall revenue with that particular account. You increase the customer lifetime value (CLV) of the account which comes as their use of your services deepens. The Process of Account Rounding So where do you start? By taking a long and hard look at the data contained in your agency management system. This job is easier if you have invested time in labeling and segmenting data. If you haven’t, you can still get started by segmenting these account types: Current Accounts – Both Personal and Commercial New Accounts – Both Personal and Commercial This job is made even easier if you can run reports that show specific lines which are being purchased – or not. Try to determine…
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