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Winning Back Profitable Clients

Featuring Lynn M. Thomas, Esq., 21st Century Management Consulting, Inc.

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Posted on 03 Jun 09

In the previous issue of Insurance Unplugged, we spoke with Lynn Thomas of 21st Century Management Consulting about identifying an agency’s profitable clients and the need to “Wow” to keep them. In this issue we discuss with Lynn how to win back some profitable clients that have left the agency.

Annie George (AG): You know who your agency’s profitable clients are, and now one has left and is with another agency for his/her coverage. What can you do?

Lynn Thomas (LT): “First, we need to realize that clients who have left are the perfect candidates to win back, especially in this tough market. They know you and you know them. But, unfortunately, most agents don’t have a formal program to win back former clients. It is a lost opportunity.”

The reasons to go after former profitable clients are numerous according to Lynn: The insurance industry has the highest client acquisition cost, and seeking former clients is one way to lower that cost. According to Lynn, one of 10 former clients will allow you to quote their business just because you called. What’s more, there is a higher retention rate among those who do come back. “You want to regain that lifetime of revenue,” says Lynn. “It’s important for an agency to seek to have a high retention rate and lower acquisition costs. These are seeds for long-term profitability. The orientation process has already occurred with these clients, so they will fold in very easily once they return.”

“In working with agencies, we have had great success in winning back former clients. Between 20-30% of former clients return within two to three years. These are clients who left for reasons that are within the agency’s control, not because of a merger, sale or other uncontrollable reason.” For those who have left due to situations beyond your control, such as a merger, Lynn suggests that since they really valued you and your services, call them for a referral.

Furthermore, as discussed in the previous issue, there are red flags along the way that signal a client is going to leave. These signs usually go unnoticed and unaddressed by the agency. “An agent needs to be aware of the signs and intervene before a client leaves,” says Lynn.

“Most agencies learn a client is leaving because they receive a ‘Broker of Record Letter’”, says Lynn. “It’s easier that way; there is no discussion or confrontation involved. But an agent needs to call and ask why; show a level of caring. Conduct an exit interview, something very few agencies do. One way to do this is to use an outside firm to interview profitable former clients; these clients tend to be very honest about why they left since they are not talking directly to the person with whom they’ve had the business relationship. Or perhaps assign a person inside the agency who did not work with them directly to conduct the exit interview. Clients usually will feel more comfortable about opening up.”

Lynn mentioned that when her company calls former clients, some will say, “The agent does not know we even left. It has been a year, and I have not heard a peep from him.” Lynn reinforces that showing indifference just provides justification for the client who has left.

AG: Let’s say you can’t undo what has happened, the client leaves, how do you go about wooing him or her back?

LT: “Call the former client after the first quarter, and each quarter after that for the first year, but don’t ask for the business…offer your advice, your expertise. Let these former clients know that because you have worked together for so long, you want to make sure his/her company is getting the appropriate coverage. Set yourself up as a trusted advisor. Don’t use scare tactics; simply reinforce how well you know the client’s business…‘For example, your company has a unique D&O exposure and I want to be sure that this has been covered accurately,’ is an advisory approach you can take. But you need to be genuine about it, if you aren’t, as we all know when someone is insincere, it is detectable in his or her voice.”

Lynn also suggests that having a communication strategy in place such as sending a quarterly newsletter to former clients can be powerful glue that will win many of them back. “Educating people has a special effect on them; they feel obligated. Send the newsletter for five quarters and then ask to quote their business. Nine out of ten will say sure.”

The first few years are critical to successfully winning clients back. It is harder to win former clients back, especially after four years once they have assimilated into their new agency.

AG: What about the premise that most clients leave because of price?

LT: “In today’s market price is an issue, but clients leave primarily because of a series of negative experiences. Basically, people at the agency exhibited indifference to them. It takes so much to chase clients away. By nature we are loyal; clients don’t want to leave any agency they are currently with. It’s because of a series of negative events that happen, that almost force these clients to leave. You may not be aware of any of these negative events. Only 4% of people complain, the rest just walk away quietly. Then in this soft market, price becomes the tipping point. If the price differential is within 15% of what the competition is offering, the client will generally stay. Most of us are willing to pay 15% more for high-quality services and products. If clients leave for less than that, they are saying, ‘I have not experienced high-quality service from your agency.’ The relationship began to erode over time, no one noticed, and now the client is a former client. The fact that few people complain is a critical reason why agencies need to continuously ‘Wow’ their profitable clients, because they cannot afford to create a negative experience.”

“When I have interviewed former clients, and the reason I am told by the agency is that they left for price, and I ask the former client, if it were not for price, would s/he have stayed with the agency, about 30% will ask, ‘How confidential is this interview?’ The client will then tell me about the 3-4 negative experiences that led up to the current one and price was the last straw. Price is an excuse, because you can’t touch it. It is like Teflon. People use price because it is easy; there is no hook to keep them tied to your agency. And for those who did leave during the soft market and price was a factor, it will be easier now to win them back as the market is pegged to harden.”

Lynn explains that it is critical to take the time to train staff to be attentive and responsive to clients, to take the time to listen to their complaints, show respect, give them your undivided attention, and continuously “Wow” them. “Most employees are not passionately committed to keeping them, and then wonder why clients leave.”

AG: In setting up the process within the agency of re-engaging with former clients, what do you recommend?

LT: “Sometimes the agent or producer is not the best person to do the calling. Perhaps the president makes the initial call. This will show the client that s/he is important since the president of the agency know s/he left and wants to make the first call. Then perhaps it’s a customer relationship manager that does the follow-up. But be sure you want the person back, if you don’t, then don’t call.”

“It’s like a romance. How do you woo them back when they feel rejected? It’s about the small gestures you undertake. Remember, a client’s experience is completely different than that of the agent. When a client experiences your genuine attention, s/he starts to think ‘I did matter, they do care.’”

Lynn also suggests creating a Client Advisory Council, an advisory board, and include former clients. “It is a potent strategy to win the clients back. You can call former clients to serve on the board and tell them that you value their opinion and realize that they have had negative experiences with the agency and you want their ideas and suggestions to help in improving the agency’s customer service strategy. The Council may meet bi-annually and its function is to be the voice of the client within the agency. They can offer you tremendous insights as to why they and others left.

“You need a win-back strategy in place that includes planning,” says Lynn. “In order to work, it has to be implemented agency-wide and become a part of the culture and philosophy of each employee. How each producer interacts with the former client is a matter of style but the actual plan has to be a systematic sales strategy. Look at what is working, who has been called, what efforts have been undertaken to win back clients? Are you sending newsletters, pertinent articles to former clients, engaging in regular proactive contact?”

“We all have blind spots larger than our faces that prevent us from being more effective at our work. But it’s time to let your ego go and exercise your wiser judgment. When told about something that was wrong, if you genuinely did not know, respond, ‘I never knew that, thanks for letting me know.’ Your former clients are amazed and thinking, ‘They cared enough to ask, were not defensive, and thanked me!’ Wow! This could be the beginning of a new and lasting relationship!”

About Lynn M. Thomas

Founder of 21st Century Management Consulting, Inc. based in Waltham, Massachusetts, Lynn has consulted with companies and agencies on how to increase client/employee loyalty and retention as well as provided methodologies to accelerate a firm’s growth rate. She is one of only twelve customer retention experts in the country and the only individual with a focus on this as it relates to the insurance industry, having worked with more than 400 insurance agencies and carriers throughout her 20 years of experience. To learn more about 21st Century Management Consulting’s services, please visit:, or you can contact them at 781.899.4210 or e-mail at:


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