Profit from Change. Troy Korsgaden
sold on our agency. Therefore, we can’t afford to market them the same way we do somebody who has several different products with us.”
Here’s an illustration of why it’s more efficient to have 1,000 households with four policies each than 4,000 customers with one policy each. In either case it equals 4,000 PIF. With 4,000 customers your phone rings all day long. It costs you a lot to service their business. On the other hand, the higher product-density agency operates more efficiently and profitably because one phone call services all four policies.
Your enduring challenge, of course, is to deepen the relationship with each of your customers, and clearly that includes your mono-line customers. But as you increasingly address the challenge, it’s possible that one day you may come to the point where you decide that having a single-policy household no longer fits your business model at all. First you have to identify which customers don’t want to grow with you, and in Chapter Nine I outline the process to make that assessment quickly and efficiently. What you’ll probably discover is that a small percentage of your customers are content to have just one product with you, probably because you offered the lowest price at the time of purchase. Those are price-driven customers, which means they’ll leave your agency at the drop of a lower price. Obviously you’ll want to try and persuade them to expand their relationship with you, and you’ll want to continue serving their accounts with the professionalism all of your customers deserve. In the end, though, price-driven customers are poor investments and if they signal their intent to disengage from your agency, let them. The days of clinging to customers who care only about price are over.
Now that you’re beginning to look at your customers differently, in the next chapter I’ll take you through the steps necessary to look at your agency differently. Is it geared up and staffed up to capitalize on today’s opportunities? It's not that difficult to make it so, and I’ll show you how.
Chapter Highlights
— Today’s business environment requires a holistic view: that we see the potential each household offers.
— Life is always changing. To maximize the potential in every household, stay on top of the major transitions in your customers’ lives. What they need today could expand tomorrow.
— Gone are the days when households offered the potential for only seven sales. Today, the industry average is 10. Take advantage of it.
— Don’t spend a disproportionate amount of time with single-policy customers who refuse to grow with you. You want customers who are driven by more than price and will respect the needs-based approach you bring to them.
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