Here's an interesting statistic; your chances of selling to an existing client range between 60-70%, while trying to sell to a new client ranges as low as 5-20%. Studies have also shown that there's a high likelihood that 80% of all your future revenue will be from 20% of your existing clients.
Yes, acquiring new customers is essential for your insurance business growth, but you shouldn't neglect your current customer base. They're a gold mine! Think about it, they've already interacted with your products and can attest to the quality of your services. There's also a high chance that they trust your business. This makes them more likely to buy additional policies, which is where cross-selling comes into play.
We have compiled an in-depth guide on how you can improve customer relationships and increase profitability by cross-selling insurance packages.
Cross-selling is all about encouraging your customers to buy additional products based on their initial purchase. For instance, if one of your clients bought a medical policy for their children, you can use this information to sell to them an education policy. This insurance sales strategy is highly effective, and a study by McKinsey revealed that cross-selling can increase your profits by 30% and your sales by 20%.
Why cross-sell? Well, it helps you;
It's also the perfect way to close each month strong and increase revenue from your current book of business.
Most people use up-selling and cross-selling interchangeably, but they are different. Up-selling involves selling to your customer a premium version of a product (one that's highly priced) compared to the one that they are interested in. Basically, you're trying to get the client to spend more money! For example, if a customer wants a homeowners policy and you know that they recently had a baby, you can suggest that they upgrade their policy so that it includes the child's medical coverage.
Cross-selling, on the other hand, involves selling different products to the same client. They don't have to choose between one policy or the other because they need both. Some examples of cross-selling opportunities for insurance agents include;
When cross-selling is done efficiently, it enables you to offer your clients maximum value while at the same time increasing your revenue.
In addition to increasing sales, cross-selling also helps insurance companies;
While the benefits of cross-selling far outweigh the cons, it's important for insurance agents to know that the disadvantages exist so that they can avoid them.
Cross-selling is a delicate practice; you don't want to come off as too pushy to your customers, but at the same time, you need to find a way of encouraging them to make a purchase. Here are the top practices to help you out.
If you already have an existing book of business, use it to cross-sell your products. You just need to use your organizational abilities to identify the products your customers are currently using and the policies they'll likely need in the future. For instance, you can ask your highest performing agents to establish a system that highlights clients with active policies and those with upcoming renewals that would be ideal for cross-selling.
Conduct comprehensive audience research to identify what your clients' needs are. This process should be done regularly because customer needs are always changing. For instance, a customer may have recently gotten engaged, giving you a unique opportunity to promote coverage for their engagement ring.
To increase your chances of making a sale, implement the cross-selling strategy within 30 days of your initial conversation. Time is critical, and if you wait past this period, your efforts will be less effective.
Don't just ask your clients to make a purchase. You need to adopt a methodical approach based on the customer's needs. The plan should contain the methods you plan on using to market your products as well as the policies that you plan on cross-selling and their relevance to the clients.
Don’t assume that your customers know all your service offerings just because they bought one policy from you. Implement a proactive approach and walk them through all your other products. You can easily package this information in a brochure or give them a link to your website.
Make recommendations based on your customer's initial policy but be careful not to come off as pushy or overwhelm the client. Ensure that you only pitch policies that are well-targeted towards their needs and preferences.
This is the process of grouping together complementary insurance policies and then offering them to a client as one package. You just have to ensure that you only present bundles that the customers need.
This is a great way of motivating the customer to purchase your products. It's especially effective if your client is on the fence about getting an additional policy.
Have any of your other clients taken complementary policies? How is it working out for them? Sometimes the best way to encourage a customer to purchase a policy is to show them your previous success stories.
This is best achieved by staying in touch with your clients. Some of the opportunities you should watch out for include major life events such as getting married or having children and upcoming policy reviews and renewals.
If you regularly send emails to your current customers, segment them based on their current policy needs, and then create an email campaign that highlights complementary policies that they may need.
Have a one-on-one session with your customers and ask them questions that will give you insights into their lives. This not only helps you identify cross-selling opportunities but also lets your clients know that you care about them.
The truth is that you may not make a cross-sale the first time you suggest an additional policy to your customer. Set up friendly notifications that aren't overly promotional to position your agency's products.
Social media marketing is booming, and it's not hard to see why; almost everyone owns a social media account! Use your social platforms to interact with your clients and constantly keep them updated on your policies. Don't forget to use attractive social media templates to increase your engagement rates.
The success of your cross-selling strategy is highly dependent on how well you stay updated on your customers' information, which is where CRMs come into play. Some of the CRMs you should consider include HubSpot, Zoho, SalesForce, Freshworks, etc.
Compare various platforms and only settle for the one that fits your agency's needs.
The best way to highlight your agency as a comprehensive insurance advisor is by efficiently serving the full range of your client's needs. You can easily achieve this by turning your customers into brand ambassadors, thereby building a strong referral network.
For more ways on how you can effectively cross-sell your current book of business, sign up for our free Cross-Selling Insurance Training video. We'd also love to help you perfect your cross-selling strategy and Streamline Your Insurance Sales With InsurGrid, so don't hesitate to contact us today!