In real estate, the popular mantra is location, location, location. And while we don’t sell houses, when it comes to senior market health insurance, we have a similar motto: renewal, renewal, renewal.
Yes! Your client is the renewal. So much so, that statistics show 80 percent of a business’ future revenue will come from 20 percent of its current customers.
These days, loyalty is fleeting for unsatisfied customers. A recent study found that 77 percent of consumers admitted to retracting their loyalty more quickly than they did three years ago. Rather than sell your client on a product, sell them on the trust and level of service they receive from you. That way, when they consider changing their plan, they’re not looking to change agents as well.
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We’ve covered the importance of client retention in the insurance industry before. Consider this: Experts say it costs five to seven times more to attract a new customer than it does to keep a current one.
It costs five to seven times more to attract a new customer than it does to keep a current one.
Initial and Renewal Commissions
There’s no denying Medicare Advantage and Medicare Supplement initial commissions are a great foundational income. However, by their very nature, they pay out at that rate only in the first year. If you put a larger focus on satisfying those T-65 and newfound clients well after their initial enrollment, their cumulated renewal commission will likely surpass that initial commission within a few years (as long as you stay certified).
Consider how much of your time and resources you’re spending each year on initial enrollments in comparison to serving the clients who have already purchased a policy through you. Ask yourself, when a dissatisfied client intends to change their plan this AEP, will they also find a new agent?
If a dissatisfied client changes their plan this AEP, will they also find a new agent?
What Determines Client Loyalty?
The reasons vary, but a Clickfox survey found that 88 percent of respondents valued quality over customer service (72 percent) and price (50 percent). Beyond just numbers, you can translate those same customer values into actionable selling practices:
- Quality – Develop a trustworthy, professional, and reliable relationship with your client.
- Customer Service – Provide prompt and courteous responses to questions.
- Rates – Offer competitive rates. (It’s OK if they’re not the lowest!)
It’s important to remember that your client looks to you for guidance in addition to expertise. As an independent agent, you work for the client, not the insurance company. Focus on a client as a person, not just a policy. When your client holds the value in the renewal process, you show them a level of quality that’s tough to beat.