Customers cancelling their policy is par for the course when running an insurance business. However, there are things you can do to minimise the numbers.
When a customer wants to cancel a policy its not always a foregone conclusion, with the right tactics you can often turn things around.
You should:
Understand the reason your customer wants to leave.
Explain the risks of not having insurance.
See if there is a solution and work out what you could offer to keep them.
The common causes of cancellations are poor customer service, coverage and cost but you may be able to turn these around to retain the customer. Having strategies to reduce customer churn can be very cost effective for your business.
So how do you find out if your customers are happy with the service? Just ask them!
Below you’ll find some tips on what to say when they want to cancel and strategies to keep them long term.
Create loyal customers and prevent cancellations
The industry is highly competitive and there are lots of options out there for the public, so to retain customers you need to keep them happy.
They are much more likely to stay if you have taken care of their needs and if you can go beyond their expectations, they may even praise you on social media or to their friends, which can generate new business. As policy cost is one of the biggest factors for customers, you can keep them happy by offering affordable rates but often this is taken out of your hands by the insurers you work with. Furthermore, if you offer excellent customer service and policies that adapt to their needs over time, that will go a very long way to retaining your customer.
A general rule is to contact them once a quarter to find out if they still have the same needs for their coverage and if they are happy with the service. This doesn't need to be a manual process, a timely email campaign may be able to help.
Common reasons customers want to cancel
It will still be natural to lose customers even if you are using retention strategies. When you get a cancellation request it is best not to take it personally, it may not be a reflection of your business. The following are common reasons for cancellation and objection handling to help prevent them.
Reason 1 - A change in assets
Customers often change their circumstances and may call to cancel their policy without realising that a mid-term adjustment can often resolve the issue. Ask questions about their new requirements to see if adjustments can be made or start a new policy for them and retain their business.
Reason 2 - Relocation
A customer may be moving to a new home or business premises and think they need to cancel the policy because it's the easiest option, however, a policy adjustment could be more suitable. Remind them that even a brief lapse in cover could be costly for them or their business if something were to happen.
Reason 3 - Price Increase It’s very common in Insurance for a customer to want to jump ship for a better price if there is a premium increase. Answer by offering to help them find a better deal, or adjust their policy to lower their rate.
Reason 4 - Poor Service
Another common reason for cancellation is poor customer service. If over the course of the policy, communication has been poor, this can often impact the customers satisfaction with the service and cause even the most loyal customers to shop elsewhere.
Cancellation through poor service can often be an emotional time for the customer so the best solution is calm communication. Try to empathise with the customer’s concern, apologise for the problem and try to find a solution. When you show your commitment to helping them this can go a long way to preventing the cancellation.
Whatever the reason for cancelling, there are risks involved for the customer for not having continuous coverage in place. Sharing those risks could potentially change their mind.
How to deal with customers who are set on cancelling
Even with best retention strategies some cancellations are unavoidable. If this is the case, try to leave things on a positive note and win them back in the future. Send them a sorry to see you go email and thank them for being a valued customer. In the email you may consider asking them to provide feedback to improve the service. Ask them to rate the price, policy options and customer service.
Use the feedback as a learning opportunity and case study to help improve the customer service. If you notice similar feedback/ complaints from customers then it might be worth considering wider changes to your business. Improving customer service will naturally improve retention rates over time.
The long term success of an insurance broking business depends as much on retaining customers as it does finding new ones, so customer satisfaction should be a top priority. By monitoring and improving your customer service and objection handling skills you can keep customers happy, revenue up and the business running smoothly.
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