Cheaper to Keep Her!
So when you hear this saying, what do you typically think of? Someone who is contemplating a potential divorce? The song made famous by The Blues Brothers ? The movie starring singer turned-actor Mac Davis ? Then what is the first thing that pops into your mind when you hear that saying? What about the insurance industry, and retaining your existing business?
For many agencies out there, the emphasis has long been on obtaining new business, and not as focused on protecting what is already in-house. For instance, according to many sources, the following is believed to be extremely accurate: 1. Most experts agree that it costs four- to-six times more to acquire a new customer than to retain an existing one 2. Marketing to existing customers is five-to-eight times less expensive than marketing to new ones 3. 65% of a company’s new business comes from existing customers 4. Because it costs so much more to acquire a new customer than it does to sell to an existing customer, you are much better off spending your marketing dollars on those whom you know, rather than on complete strangers 5. Repeat customers spend on average 67% more than new ones
Armed with these and other facts, I am not at all saying that you should not con- tinue to obtain new business, but it makes perfect sense for an agency to find new, innovative ways to increase their effort on retaining business as well…something that many agencies don’t take advantage of.
I typically do not do commercials in this column, but when I see a piece of tech- nology that I believe will help an agency increase revenue and decrease expenses, I feel that it is incumbent upon me to share it. Being that this is the technology issue of our magazine, the information that I am going to share with you now is certainly apropos.
A New Era in Policy Renewal Management
Nag Rao , founder, president and CEO of EZLynx recently released this statement: “I would like to announce the release of a ground breaking product called EZLynx Retention Center for personal lines renewal management, available as an add-on to EZLynx Management System customers only. We are extremely proud of this product because it has taken nearly 24 months of hard work to get from conception to release, and it’s as revolutionary as our original real-time rating tool! EZLynx strongly believes that a personal line is under direct attack from other industries. One way for small agencies to combat this challenge is to be smart about how you service policies and manage renewals. EZLynx Retention Center addresses the daunting task of renewal management. With Retention Center, you no longer wait for your customer to call and complain about rate hikes at renewal. Instead, our system will identify on a daily basis those customers that you are most at risk of losing so that you can focus your efforts in the right place. As part of our twelve month beta program, several agencies used EZLynx Retention Center and, not surprisingly, noticed a huge increase in retention!
I want to spend some time impressing upon you the importance of retention. I have always been surprised during any one-on- one conversation with agents on the ques- tion of what their agency retention rate is. Agents are never sure of what their exact agency retention numbers are, but they always think it’s good. We have identified a solid and obtainable agency retention rate as being in the 90-95% range. However, you may be surprised to hear that the average retention rate across all EZLynx agencies was only around 75%.
Three years ago we made it one of our goals to attack this problem head-on for our customers. As a first step, we started deliv- ering a monthly email report called EZLynx Agency Pulse for all EZLynx Management System customers. In addition to agency retention numbers, Agency Pulse has several key agency performance metrics that we believe every agency owner should be using as a guide to manage their business. As our second step, EZLynx Retention Center removes the drudgery of trying to manually manage your renewals.
During our beta testing, we worked with five large agencies to gauge just what kind of results we could see with this tool. To our delight, and to that of our beta agencies, we found that with very little effort agents were able to hit our 90-95% retention target with- in 3 months! Think about that…For a book size of $10M, that’s at least $100,000 in additional annual revenue!
We believe that EZLynx Retention Center is a powerful tool that can help your business become more profitable. We have several exciting tools in development that continue our trend of finding innovative ways to help independent agents manage their top and bottom line. Please remember that in order to enjoy the benefits of our complete customer lifecycle solution, the first step is to switch to EZLynx Management System!”
Congratulations, Nag, and the entire EZLynx development team, for bringing yet another amazing piece of technology to our industry.
The Professional Insurance Agents of New York recently held their annual event, “ Long Island Regional Awareness Program aka Long Island RAP ”. Once again, congratulations to the entire Long Island RAP Committee (of which I am honored to be the Chairman) for another outstanding and successful event!
The day was complete with a sold out trade show, exceptional education classes, and of course the coveted awards presented to Phil Plafker who was the recipient of The Louis A. Morelli award ; and Gregory Clark, VP of MAPFRE Insurance Company , for Executive of The Year . Our keynote speaker at this year’s awards luncheon was NY Mets and NY Yankees pitching sensation Dwight “Doc” Gooden . Filled with stories that brought both laughter out loud and a tear to the eyes of the standing room only crowd, Dwight spoke not only on his amazing career in baseball, but also on how he over- came the challenges in his life, and on the ways that he now gives back to those with whom he met along the way.
Also honored at the luncheon were the past Long Island RAP chairs, who served this committee over the past 40 years. On a personal note, I am honored to be among such an incredible group of people, who have dedicated so much time and effort to help this thing of ours become what it is today! Thank you to everyone who partic- ipated!
Well, until next time when we will be talking about insurance events in Rhode Island and Massachusetts, “Ciao for Now”!
