This is the fourth in a seven-part weekly series, "Thriving During the Coronavirus," on how insurance agencies and companies should handle the pandemic and ways to work around new economic challenges.
The economic downturn may hurt your business in the short term, but how you respond can help it grow in the long run.
In previous articles in this series, I’ve shown how your decisions to keep staff instead of laying off and focus on your business can help you survive the current recession.
Now it’s time to talk about your customers. While you’re focused on your own business, your competitors are going to be looking for ways to poach some of your customers. It’s time to think about playing defense to keep them from leaving.
Growing Your Business
To recap the previous articles: Your customers premiums are going to go down as the economy struggles. To keep your commissions from decreasing, you need to have more customers.
So, how do you do it?
First, think about your own behavior. How are you going to respond?
If you are like most people, you are going to:
Protect Your Existing Customers
It is more profitable to keep existing customers than it is to acquire new ones. But in a recession, that may take a little more work.
Most insurance renewals just happen. You – the existing agent – do not contact your renewing customer. The customer gets a bill and they pay it. Some of them shop around, but historically about 90 percent do not.
This year and next year many more of your existing customers are going to shop around more as they look to cut costs.
Think about how your existing customers could be enticed to move their insurance. Is it lower premiums? Bundled policies? Added services? Write all these ideas down.
Highlight the things in that list which are things you do not or cannot currently do.
For each item you highlight, write out the reasons you currently do not or cannot do these things. These are the problems you need to solve.
Even if you keep saying to yourself “I cannot possibility do this,” write out a plan. It will surprise you how identifying your roadblocks can lead to solutions.
This list is the single most important tool you will have in the coming 18 months.
What Would Put You Out of Business?
Take another look at the list you created above. You need to create a priority action list. Most people start with the low-hanging fruit. You need to start with the actions with the largest impact.
You need to aggressively implement actions to defend your existing book of business before you take actions to go after new business.
The good news is the list you just created is probably the list of actions you can use to go on the offense to acquire new business.
In my next article, I’ll discuss going on offense to protect your business and retain your employees.
If you missed "Part 1: How Your Insurance Agency Can Weather the Global Pandemic and Economic Downturn," click here, Part 2: “How Your Insurance Agency Can Survive a Drop in Revenue Due to the Pandemic,” click here or Part 3: How Your Agency Can Thrive During the Pandemic and Avoid Layoffs, click here.
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