Existing clients are a broker's lifeblood. The percentage of business generated from existing customers as opposed to new clients can be as high as 90%. Retention levels are also very high, averaging 90-95%.
Learning from experience
Top brokers hardly ever lose clients, and the main reason for not achieving 100% is due to company closures and mergers. When defection to the competition does happen, it is essential to hold a postmortem to discover the reasons and learn from them.
Make loyalty count
Many of our brokers use the Customer Relationship Chain to add value and profitability to their businesses. They go to great lengths to move their customers up the chain towards loyalty and advocate status.
Reviewing your clients
It's essential to review your major clients annually or every two or three months, depending on the size of their account. The best time to carry out an annual review is a few weeks before policy renewal. This gives the client time to make decisions, but not so much time that there's no incentive to act.
Spread their commitments
Some brokers encourage customers to renew all their policies at the same time, as this streamlines the review and servicing processes. However, this can create the risk of losing clients to a competitor, who may then be able to sell a number of different policies from the same start date.
Key to relationships
A single key account manager is important for maintaining strong relationships with your customers, although smaller clients may be dealt with over the phone. Organise internal brainstorming sessions.
Renewals and rebroking
A number of brokers see this as a key responsibility of a broker, for they must be seen to scour the market for the best deal each year. Other brokers will only rebroke every two or three years, or in cases where there's a strong likelihood that a much better deal can be found.
Keep it personal
Strong personal relationships with clients are very important. Never waste the opportunity to meet top clients. The biggest customers warrant more attention than the smaller ones, and many brokers categorise their clients so they can commit time and resources to match the opportunity for business.
This article is taken from the latest edition of The Cutting Edge – Part 3. Copies are available from your local CGU branch.