We’ve all heard about the importance of data analytics in the world of modern technology. Data can help independent insurance agents make wise decisions about how to convert prospects into customers, how to engage with clients, how to increase retention, and more.
Used well, data becomes insight. It reveals where an agency did well and where it can do better, serving as a pulse check on different aspects of the agency.
However, with more and more data becoming available, it can feel overwhelming to sort through it all. There is a lot of noise, so agents have to figure out what is relevant.
So, where should agents start?
There is no one data chart that will define your business. You must examine different dimensions of the data to get the full story. But, for insurance agencies, it can be helpful to split data analytics into three different broad sections: pre-business, during business and post-business.
Pre-business: How are you driving new business?
Pre-business includes things like how many leads are coming in, where those leads came from and how many of those leads converted into sales.
Knowing this data will help you set targets to meet your goals. For example, let’s say your goal is to hit $1 million in new business in your first quarter. You can look at your conversion rate and your average commissions per customer and know how many leads you need to bring in to meet that goal.
Analyzing data can also reveal why you are winning or losing customers.
If you’re having a strong month of sales, you can explore the data to see what made you win – where those leads came from, how many touchpoints you had with those customers before closing – then double down and replicate those tactics.
If your agency is struggling with converting leads, you can look into the data to see at what stage you lose the customer. Are you losing them right at the beginning after your first interaction, or are you losing them after quoting? Analysis shows that if you’re losing prospective customers right at the beginning, you may not have engaged or excited them enough for them to choose to do business with you. On the other hand, if you’re losing after quoting, it means that either the price or the product was not competitive enough.
Data helps you proactively make wise decisions. Rather than just going with your gut feeling or waiting around for the phone to ring, you can see the most effective ways to turn your prospects into clients.
During business: How are you nurturing your current clients?
In sales, we often talk about “nurturing” our prospects, but we need to nurture our clients, as well. If you’re neglecting your client instead of nurturing them, you will lose that client.
After you make the sale, how are you building an experience for that client? You will likely have many touchpoints over the first year. Your agency data will show you the average policies per client and reveal opportunities for cross-selling. It will also tell you which customers are opening your emails and might be receptive to hearing about additional products.
Of course, you’ll also want to look at your retention rates. What are you doing to make sure your retention numbers are moving up? Which tactics get the most response from your clients?
I’ve seen agents increase their book value by at least 20% within 12 months just by mining their current book of business to increase cross-selling and retention.
Post-business: Why are you losing clients, and can you win them back?
It’s much more cost-effective to retain a client than to acquire a new client. Yet, one of the most overlooked data points is the win-back percentage.
If your agency loses a client, you have a small window of opportunity to win back that client. You’ve invested in a relationship with this client, and may be able to address their concerns or frustrations. What tactics are you taking to win back clients, and how often do you succeed? Why did the client leave, and how can you prevent it from happening again?
Where to begin
Whether you’re doing data-analysis internally through your AMS or working with a third-party service or vendor, having a clear line of sight on your agency’s data will help guide your decisions and constantly improve your agency.
Still overwhelmed? Start small. Start with the area of your agency that you know needs work. Maybe you’re doing well with new business, but your retention is down to 73%. Dig into the data and analytics around how you nurture your clients to see how you can boost that number.
Individualized agency data is important because nobody knows the exact science of what will work for every agency. Your agency is unique. How you talk to your prospects and clients is unique. Data helps you know your agency better. When you understand your agency’s strengths and weaknesses today, it will help you adapt to be more successful tomorrow.
The views, opinions, and positions expressed herein are those of the author alone, and should not be considered to represent official positions of Liberty Mutual or Safeco nor to imply any endorsement by Liberty Mutual or Safeco.
