To build client loyalty, develop an ecosystem of service

How can independent agencies distinguish themselves from other providers?

When it comes to competition for insurance clients, rock bottom rates are often a zero sum game. Clients may love lower prices, but they don’t enjoy the lackluster service associated with discount carriers. Agencies that offer reduced rates may benefit from an influx of budget-minded consumers, but those consumers can be a drain on profits since they tend to purchase only low-margin products. In fact, price wars have devalued insurance overall, turning an important product into a depressed commodity.

In order to set your agency apart from the competition, you need to offer more than low rates. You need to offer the support and value that consumers are willing to pay more to have. According to Bain and Company’s 2017 report Customer Behavior and Loyalty in Insurance, forward-thinking insurance agencies are accomplishing this goal by providing clients with an ‘ecosystem of services’ to supplement traditional insurance products and services:

Customers say they’re prepared to pay higher premiums to carriers that offer them desired services beyond insurance. And, if their own insurer doesn’t provide the services they’re looking for, they’ll consider switching to one that does.

What constitutes an ecosystem of services?

Ecosystem services refer to non-insurance services that provide insurance clients with a value-added experience. Insurance providers supplement their traditional offerings by providing additional services that reduce risks or consumer costs in areas related to the insurance products. For example, a home insurance provide might expand their services to include remote home monitoring or energy saving notifications.

How do agencies know which services to offer in addition to insurance provision?

Building an ecosystem of services for clients is a relatively new approach to insurance marketing and many providers still haven’t capitalized on the idea. That makes it an ideal market opening for smaller independent agencies.

If it sounds like the opportunity your agency has been hoping for, you may wonder what kinds of services you could add to satisfy your clients. Naturally, you’ll want to select services that are relevant to your insurance offerings. Take a look at these examples from the Bain report:

How does an ecosystem approach affect client loyalty?

According to the Bain survey, the best way to build client loyalty is through client contact. Even clients who prefer digital interactions for their convenience complain that insurance agencies don’t do enough to personalize their experience, understand their needs, or resolve issues. An ecosystem of services can remedy each of these problems.

Policyholders immersed in an ecosystem are healthier and safer, which is good for insurance providers’ bottom line. Ecosystems also provide richer data on consumer behavior and needs. This information positions insurance agencies to retain and acquire high-value clients through more refined marketing strategies and more desirable product offerings. By offering a more diverse set of services and products, agents also win more touchpoints, making it easier to prioritize client relationships and personalize client experiences.

Not sure where to begin when it comes to building an ecosystem of services? Get in touch with the insurance marketing experts at AgenciesOnline. We’ve partnered with the innovative startup BeneTechs, which gives independent agencies a simple and cost-effective way to expand their ecosystem and grow their client list.

 

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