Digital Interaction Builds Trust and Client Retention

Written By : Greg

Did you know that only 37 percent of customers fully trust their own insurer? Less than half – 42 percent – feel that their insurer can be counted upon to provide good service*. That’s an awful lot of people who don’t actually trust their insurance brokers! And chances are, some of them are your own clients.

The primary danger of this mistrust lies in the ability of another financial advisor to swoop in, woo your clients, and scoop them up. But it also means that your clients are reluctant to refer their family and friends to you. That hurts your referral rate, an otherwise powerful way to grow your practice.

For years, the insurance industry was accustomed to this lack of trust from their customers. It’s human nature to be skeptical, but gatekeepers are needed for customers to access financial services like insurance. In other words, customers had to buy their insurance from someone, so insurers mostly competed with one another to grab their own share of the market.

However, the financial industries are rapidly changing, thanks to the internet. In particular, the ways in which your clients choose an insurer has shifted. With 20 percent one survey’s respondents saying that they would consider purchasing insurance from Google*, it’s easy to see that client retention is now more important than ever. If your customers lack trust in the insurance industry overall, why wouldn’t they Google insurance rates and simply choose the lowest price? These trends put your practice in danger of a high churn rate.

Perception is everything. As you might expect, price is often the most important factor in a customer’s decision-making process. But when prices are roughly equal, survey respondents say that quality of service and past experiences with a company are the primary influencing factors*.

What is “quality of service”? And how is a past experience judged as positive or negative? These are obviously very subjective terms, and the answer boils down to one factor: customer perception. Your customers should perceive you as providing quality, and they should remember your interactions as positive ones.

Since perception is largely influenced by emotion, your task is to inspire feelings of attachment in your clientele. According to one study, increased communication was strongly associated with loyalty. Since loyal customers are retained customers, we recommend regular and appropriate communication as the most efficient way to

• Get to know your customers. Understand their concerns, through market research and online interaction.
• Offer value to your customers. Any insurance provider can sell them a life insurance policy. When you provide information and help to your customers, you add value to your practice.
• Engage with your customers. It isn’t enough to sell a life insurance policy, and the count on that customer to update their policy as needed. When you engage through social media, blogging, or personalized emails, you build rapport with your clientele. They are reminded of your presence and see you as more than just “the insurance guy”. You become a trusted advisor, which is exactly what you want to be.

One last thing to consider: For every financial advisor who does not launch a digital marketing campaign, another advisor is doing exactly that. If you aren’t communicating with your clients, someone else probably will. One way or another, your clients are going receive digital communications from a financial advisor, and they are going to trust someone with their money. When that “someone” is you, you will improve retention among your most valued clients.

*http://insurancethoughtleadership.com/capturing-hearts-minds-and-market-share/

Filed under: Financial Advisor Marketing, Social Media for Financial Advisors