Customer retention is a key indicator of how well your insurance business is performing and satisfying your customers. It measures the percentage of customers who renew their policies or stay loyal to your brand over a period of time. But how can you measure customer retention effectively and accurately? Here are some tips and methods to help you.
The simplest way to measure customer retention is to calculate the retention rate, which is the ratio of customers who remain with you at the end of a period to the customers who were with you at the beginning of the period. For example, if you had 100 customers at the start of the year and 80 customers at the end of the year, your retention rate would be 80%. You can calculate the retention rate for different time frames, such as monthly, quarterly, or annually, depending on your business cycle and goals.
Measuring customer retention in the insurance industry is crucial. You can achieve this through customer surveys, customer retention rates, longer contract durations, fewer complaints, successful cross-selling and up-selling, positive online reviews, customer loyalty programs, regular communication, special events, and clear customer retention goals. Remember that customer retention is a long-term endeavor and requires persistence.
Se puede medir cada mes : los nuevos clientes vrs los que se van. La retención debe estar acorde a cada persona y su necesidad, se va por algo no tangible? O se va por algo si tangible. Todas las partes involucradas deben estar alineadas y buscar el mismo objetivo. Menciono la palabra tangible y no tangible porque lo que no veo no lo puedo medir y por ende no lo puedo cuantificar para dar soluciones.
Acredito que as duas melhores maneiras de medir a taxa de reten??o de clientes é analisar quantos clientes chegam com o sei atendimento ao final da vigência do seguro, e qual a porcentagem dos clientes que renovam o seguro para a próxima vigência. A renova??o do seguro é a verdadeira métrica de reten??o, sobretudo nos ramos de Auto e Elementares.
Another way to measure customer retention is to track the customer lifetime value (CLV), which is the total revenue generated by a customer over their relationship with your business. CLV reflects not only how long a customer stays with you, but also how much they spend and how often they buy from you. You can calculate CLV by multiplying the average revenue per customer by the average retention rate and the average customer lifespan. For example, if your average revenue per customer is $500, your average retention rate is 80%, and your average customer lifespan is 5 years, your CLV would be $2,000.
A third way to measure customer retention is to segment your customers based on their characteristics, behaviors, and preferences. Segmentation allows you to identify and target different groups of customers who have different needs, expectations, and values. You can segment your customers by various criteria, such as demographics, policy type, claims history, loyalty program membership, feedback score, or referral rate. By segmenting your customers, you can tailor your marketing, communication, and service strategies to improve their satisfaction and retention.
Retention rate needs to be calculated following the logic the portfolio is managed. So that one can target retention activities directly. Overall rate may be good just for hogh level benchmarking.
A fourth way to measure customer retention is to monitor retention metrics, which are indicators of how well you are retaining your customers and why they are staying or leaving. Some common retention metrics are churn rate, renewal rate, retention cost, net promoter score, and customer satisfaction score. Churn rate is the percentage of customers who stop doing business with you over a period of time. Renewal rate is the percentage of customers who renew their policies at the end of their term. Retention cost is the amount of money you spend to keep your customers. Net promoter score is the percentage of customers who would recommend your business to others. Customer satisfaction score is the percentage of customers who are happy with your service.
A fifth way to measure customer retention is to analyze retention data, which is the information you collect and store about your customers and their interactions with your business. Retention data can help you understand the patterns, trends, and factors that influence your customer retention. You can use various tools and methods to analyze retention data, such as surveys, interviews, feedback forms, CRM systems, analytics software, or data visualization. By analyzing retention data, you can gain insights and actionable recommendations to improve your customer retention.
Apply machine learning to the historical data to understand the seasonal effects, environmental conditions and other factors that could directly or indirectly impact the propensities of a particular behavior. Events don’t happen randomly; the more external data one could pull in and make reference against, the more accurate the model becomes.
A sixth way to measure customer retention is to test retention strategies, which are the actions and initiatives you implement to retain your customers and increase their loyalty. Retention strategies can include offering discounts, rewards, referrals, cross-selling, upselling, personalization, education, support, or community. You can test retention strategies by using experiments, such as A/B testing, split testing, or multivariate testing, to compare the outcomes of different versions or variations of your retention strategy. By testing retention strategies, you can optimize your retention performance and results.
Touch points and cost of switching (value-added): making insurance an omnipresent service rather than an afterthought, becoming relevant to the customer, and sometimes going above and beyond to offer greater services. In my observation, great insurance brokers and agents often offer more than just customer onboarding and claims support, they are present in their customer’s and their family’s everyday life.