How to Win Back Your “Lost Leads” & Old Customers
Most training in insurance sales focus on acquiring customers, but, as beneficiaries continue to age in, and more products become available, it’s also essential to focus on winning back customers, or prospects you’ve lost.
Reacquisition is especially important for insurance agencies. Recovering “lost leads” or lost customers can make a significant impact on your book of business and your reputation in the market.
The process for reacquiring a customer requires a different approach than acquiring new ones. For one thing, your previous customers will have prior experience, knowledge, and long-held assumptions about your people and capabilities. Conversely, you have a basis for judging if that customer is worth pursuing.
In a study of 26 broken agent-customer relationships, research shows agents that had successfully won back a customer followed a similar pattern. They identified the reasons for the initial dissolution, applied the right cost-benefit analysis, conducted an honest conversation with the customer, and accommodated their specific requirements.
To illustrate the process, we’ll use an agency example, which we’ve disguised: ABC Insurance Agency. In 2009, ABC Insurance Agency, who sold Medicare Supplements and dental, vision, and hearing plans, as well as final expense to most of the beneficiaries, lost John Smith as a customer but managed to win them back in 2012. Here’s how they did it.
Reasons for dissolution.
The first step in the reacquisition process is to identify the reason why the relationship ended. Most agent-customer relationships fade away due to a lack of attention. Pricing pressures, alteration of product specifications, or changes in ownership are also factors to why many agent-customer relationships dissolve.
Your analysis needs to include who or what was responsible for the decision. It also needs to be ruthlessly descriptive, not prescriptive, focusing on what happened, not what should have happened.
In ABC Insurance Agency’s case, it had restructured, John Smith’s Medicare Supplement experienced a rate increase, and the specific agent serving John Smith didn’t notify him before the change occurred. John Smith later noted that “When the cost was raised by 12%, I informed them about my concerns, but the agent told me that it was still a stable option.” What started as a pricing issue then led to disputes and loss of trust between the beneficiary and the agency, which in turn generated more problems, and John Smith lost interest in continuing to work with ABC Insurance Agency.
All customers are not equal, and not all relationships are worth re-establishing. Therefore, before you re-connect with a previous customer, weigh the costs of winning them back against the benefits.
ABC Insurance Agency did this in a few ways. After gleaning information from its previous transactions with John Smith, the agency looked at both the products available and organizational requirements for re-establishing trust and reliability. ABC Insurance Agency also had a few things going in its favor. Since delivering high-quality products and exceptional customer service had never been an issue in their past relationship with John Smith, up until the problem with communication regarding the premium increase, ABC Insurance Agency managers believed they had an excellent case to make to John Smith. The sales manager at ABC Insurance Agency noted: “We knew John Smith was interested in three parameters: reliability, quality, and price. If we could excel within these parameters, we could re-establish the relationship and help him find a better fit with a plan that met his medical and financial needs.”
ABC Insurance Agency knew it could offer John Smith a Medicare Supplement with a lower premium, better assistance than the current online agency he was working with, and in the relevant product categories, full protection package, and other areas where the customer could quantify the benefits of a reactivated relationship.
Though your business case may look good on paper, people are the ultimate deciders.
When ABC Insurance Agency re-initiated contact with John Smith in 2012, there was a new servicing agent. “We went through a period in which we spoke on the phone at least weekly with the customer. We were finally able to get in front of John after about eight phone calls.”
It is knowing who does what, where, how, and at what levels—the necessary rules of engagement–is imperative for successful reacquisition. For example, ABC Insurance Agency had discussions with employees that had been involved with John Smith(e.g., sales agents, sales managers, and customer service representatives) and with new staff not familiar with the beneficiary. This was a key to reacquiring the account and underscores a repeated finding in management research and practice: people do business with people.
Accommodate specific requirements.
When you are a supplier, the status-quo bias works in your favor. However, when you seek to reacquire a customer, you must offer a better solution than the current agent or agency to motivate change.
John Smith made it clear that ABC Insurance Agency would need to modify elements of its communication, customer service, and its product portfolio options. However, the information collected during the reactivation process also allowed ABC Insurance Agency to adjust and optimize its activities in these areas.
The resulting agreement justified the effort.
ABC Insurance Agency’s sales from the re-established relationship with John Smith were soon higher than in 2009. As ABC Insurance Agency noted, “the fact that John Smith had a brother who had went through some medical difficulties opened his eyes up to a new need for other plans to secure his coverage gaps. For example, he now saw a need for cancer, heart attack, and stroke coverage, accidental coverage, and a hospital indemnity plan.”
Moreover, the reacquisition helped to initiate positive word-of-mouth among other buyers in this market. ABC Insurance Agency gained two new customers as John Smith recommended them to other beneficiaries. For John Smith, meanwhile, more carrier options became available with ABC Insurance Agency, and they increased their ability to sell and service in new segments (e.g., life insurance, annuities, supplemental, ancillary, and underage health)
In personal interactions, we often fear that others will judge us harshly and irrevocably if we make a mistake in pursuing a goal. However, research has shown that in many circumstances correcting a past mistake generates a more positive impression (if the mistake is not repeated) than never making a mistake in the first place. The same is true in servicing beneficiaries.
For more information and assistance is reconnecting with “lost leads” or customers, contact Agent Pipeline for individualized growth plans and self-study development courses at 800-962-4693.