How Do You Get and Keep More Profitable Customers? (Hint: Customers that Fend for Themselves are Good for Your Agency)

For the answer to that question (and it isn’t obvious), we have to look to the retail, banking and cell phone industries. By combining some of what has been learned about consumers there with what is known about consumer insurance needs and expectations we can sketch out a roadmap for growth and profit in 2006.

Consumers really would like a local provider for their insurance, in fact, Progressive Insurance learned in a 2002 survey that 92% of all consumers would like to be able to do business locally¹. But that’s not all. Most consumers would also like the option of using the internet, at least sometimes. A 2005 study of the retail industry by Adjoined Research put this number at 80%² and growing.

The banking and cell phone industries have learned something else about those consumers who want to customize services for themselves: they are more satisfied, profitable and stay with their service provider longer. Verizon Wireless has one of the highest online, self-service usage levels and one of the lowest customer churn rates in their industry³ and that’s no coincidence. Bank of America noted that 50% of their customers who use online banking rate their service satisfaction a 9 or 10 out of 10 vs. only 41% for the general customer population⁴.

But back to the insurance world. What insurance consumers want, overwhelmingly, is peace of mind. In a 2002 survey by the National Association of Insurance Commissioners 90% of respondents said that is the biggest benefit of insurance. What that means is consumers want to know they have the right level of insurance protection for their particular circumstances. That same survey found that 72% of consumers felt they did not understand their insurance program very well and that was a major reason why 83% of those surveyed felt that an annual review was a good idea. Online services that let customers address these concerns for themselves result in more product sales, enhanced retention and promote higher referral rates. One more piece of good news: services delivered online typically only cost 1% to 5% of those same services delivered in person⁵.

So with online service everyone wins: happier customers stay with their agent longer, buy more products and refer others and agents dramatically cut the cost of delivering customized service. Confluency Solutions has a variety of web modules that can be dropped into your agency web site to make your customers happier right away. This a good time of year for annual reviews for personal lines customers. Three tools to make that easy and profitable are highlighted this month: The Personal Property Wizard helps estimate replacement cost for contents and possessions without requiring a tedious inventory. The Personal Risk Wizard provides customized guidance for appropriate levels of insurance protection. The Annual Review Wizard walks users through changes that may have taken place that might require an update in their insurance program. All modules take no more than a few minutes of a customer’s or prospective customer’s time, can be used in a variety of ways and can be installed on your website in minutes. To access evaluation versions or a flash demo of these tools go to http://www.confluencysolutions.com/store.

1. http://www.progressive.com
2. Business Wire, March 16, 2005
3. Dom Peppers and Martha Rogers, Ph.D. November, 2005
4. Tom Van Horn and Robert Wollan, November, 2005
5. Dom Peppers and Martha Rogers Ph.D., sas.com magazine, Third Quarter, 2005,