While an insurance agency purchase is an exciting business endeavor, customer attrition should be something that you should be mindful of. With the change in management, some customers may cancel their policies and go to a different insurance company they see as attractive. That’s why it’s crucial to undergo insurance business consulting before taking this action, so you are guided with the best initiatives in retaining clients after an acquisition.
What Can You Do to Retain Clients?
Some customers are naturally picky and hard to please. A recent study showed that customers are likely to shift to a different insurance company three times more after a merger or an acquisition. This action negatively impacts the business valuation you have made for the company you’re buying because of the loss of its customer value.
We recommend that you engage in constant and honest communication with your customers to prevent this from happening. Reach out to them using personalized and relevant messages to assure them that the new management will continue to put their best interests forward.
Talk about your brand’s promise and explain to them the strengths and advantages of this acquisition for the customers. There may be changes you will be making in terms of policies and principles. If so, keep your customers informed about these, so they know what to expect in the coming weeks, months, or years.
Should the News About the Acquisition Come From You?
In a survey conducted about customer defection rates, it was found that customers are likely to shift to a different agency two times more when they know about the acquisition from somewhere else compared to when they hear it directly from the insurance agency. They expressed that they don’t like the feeling of being kept in the dark about such a decision that is sure to affect them.
Ideally, the announcement has to come from the old management, followed by the frequent communication initiated by the new administration. By doing this, you open an avenue to build two-way dialogues with your customers. In this way, you can measure customer loyalty. This initiative also creates lasting attitudes that will help build your business for success.
Need to Get Insurance Business Consulting?
The insurance industry can be a tricky road to tread. But with the help of organizations like Energia Consulting Partners LLC, the journey can be as exciting as we promise it to be. Get in touch with us today to learn more about how we can help you.