How Much Money Can a Good Retention Program Make You?
One of the best ways to make more money in Medicare sales is to increase client retention. Renewals comprise such a significant portion of an independent agent’s income that even slight variations up or down in client retention can equate to huge gains or losses over time. We’ve covered many proven, concrete examples of how you can increase client retention in previous blogs. Today, we want to take a couple of those examples and break down the costs to demonstrate in a very real way how investing money in client retention can make you a great deal more money in the long term.
Let’s first assume that every agent, yourself included, is doing the “free” stuff. “Free” meaning the implementation of tactics that cost more time than money, like making regularly scheduled phone calls or sending Instant Messages over social media on birthdays and anniversaries. These are great methods for staying in front of customers and shouldn’t be overlooked. You, however, want to increase your retention numbers rather than keep them around the industry standard. So, let’s take a look at some paid avenues you might want to take in order to hold on to your most valuable asset: your clientele.
Quarterly Postcards at $600/year. Sending postcards each quarter – the last one of the year being a reminder to schedule an AEP appointment – is a great way to stay top-of-mind with clients. Including recipes, fun facts, healthy living tips or other engaging information on the cards can help ensure your clients read and hold onto them. You’ll spend fewer dollars on mailings early on as you begin to build your business, but let’s use the $600 annual investment figure as a running average.
Customer Appreciation Event at $100/year. Hosting an annual Customer Appreciation Event builds client loyalty while also opening the door for current customers to introduce you to new ones. Coffee, doughnuts, a raffle prize and take-home marketing materials like referral business cards shouldn’t cost more than about $100.
The addition of quarterly postcards and a Customer Appreciation Event to your Client Retention Program creates five more significant customer touch points throughout the year. These are just two of many possible paid routes you can add to your retention marketing mix. Ice cream socials, birthday cards, handwritten notes, in-person or virtual bingo nights and other social mixers are just a handful of the many ways you can stay in front of customers. The point here is that such paid methods can dramatically increase retention rates over time. Let’s examine what impact the two specific examples we use in this article can potentially make to the bottom line for an insurance agent.
Retention Marketing Can Make Agents Money!
In order to paint a clear picture of the money an agent can make from effective retention marketing, we’re going to use straightforward calculations based on a few baseline projections.
- Agent has built a book of business of 400 clients
- Agent receives a conservative renewal rate of $250 per client
- Agent is spending $700 per year on retention marketing (ie. Quarterly Postcards and an annual Customer Appreciation Event)
If an annual investment of $700 in retention marketing leads to a 10% increase in retention, the agent would see renewals for 40 more returning clients, or a net gain of $10,000 each year. That’s over a 14x return rate on the investment!
Clearly, putting extra focus on client retention is important and worth tens of thousands of dollars – it is the only real way to ensure you continue getting paid for all your hard work. So, rather than ask “is a laser-like focus on client retention really worth it?” Perhaps a better question is “how are you going to capitalize on the tens of thousands of dollars you’re making over other insurance agents who fail to understand the value of client retention like you do?”
As a National Marketing Organization that works with thousands of independent agents, we understand you must generate leads and retain clients in order to grow your business. That’s why we work diligently to provide the resources necessary for successful marketing. If this information is valuable and you want to know more about the services we provide our Medicare agent partners, please contact us at email@example.com or 888-745-2320.