Recession is all over the news again. Some sources are saying we're in a recession already, others are predicting a recession soon, and a few are staying more optimistic.
Like most industries, insurance is not immune to economic volatility. And although it’s never a good idea to panic—it’s always a good idea to be prepared.
In a recession, consumers tend to reevaluate their expenses and reduce spending. Many will look at insurance as a bill they can lower or cut out altogether, especially if they see an increase in their rates. Clients may start shopping around unless you’ve built trust with them over time with regular communications.
We put together a few tips to help you stay competitive should we see an economic slowdown in the coming months.
Take advantage of your data
You know whose rates are about to go up. Identify customers who are going to see an increase in premiums and check rates for specific carriers and products. Segment your book into lists and address the needs of each customer group in a unique way. You can do that by making calls to some clients and building personalized email, texting and mail campaigns for others. You can tell them about expected changes, offer to look at alternatives, suggest bundling policies, etc.
Explain rate changes proactively
Always reach out proactively to explain rate changes. Customers are less likely to leave if they understand why their bill has gone up. Your clients will appreciate if you offer to set up a call to review any rate changes over the phone in advance. Even though price is important, research shows customers value your communication more than a low price.
Focus on retention
Retaining a customer is a lot cheaper than acquiring a new one. When the economy is slower, and people aren’t buying cars, boats or homes to insure, it’s critical you put extra effort into retention.
Continue to survey your customers regularly and respond to all feedback—positive and negative. Remember that by calling someone who left a negative review, you can increase your chances of retaining them by 55%. And if you aren’t sure what to say to an unhappy customer—we have talking points you can use.
Continue to check-in with your clients regularly
In addition to regular check-in emails and calls, make sure you’re reaching out with helpful content your customers may enjoy. Mix in insurance topics with other general interest stories.
Remember to thank those who refer new customers to you by sending them a card and even including a gift card. An unexpected $10 gift card can go a long way in making sure your customers know you value their business and appreciate their loyalty.
Diversify your prospecting
As you work to acquire new business, keep in mind that people shop for insurance in different ways. Some ask friends for a recommendation, others prefer to do their own research online. You need to be there when prospects are looking for you—on Google, Facebook, Bing, etc., and available to answer questions on your website once they find you.
To better understand how consumers shop for insurance and how you can get prospects to choose your agency, watch our “Turn prospects into clients” webinar replay. Our CEO, Torey Maerz, talks about the different paths consumers take when they shop for insurance and gives practical tips on the tools you need to turn prospects into clients.
Be available on consumers’ terms
If you rely on phone and email as your only ways to communicate with your clients—you're falling behind your competition. People want to be able to reach their agent in a way that’s convenient for them. Make sure your clients can text you and chat with you online because that’s what many prefer. And don’t forget about good ol’ mail. Birthday, thank you and holiday cards are a unique touch your customers and prospects will appreciate.
Don’t forget about your team
Recession and inflation affect everyone, including your employees. Keep a close eye on employee Net Promoter Scores (NPS) to reward those who are excelling and provide coaching to those who need help. NPS is great for morale, motivation and employee retention.
These tips are not new. They work in any economic environment but are especially important when things are slow. And if you execute these consistently, you’ll be in an excellent position for when the economy picks back up—with a book of clients who know you’re there for them in good times and in bad.