"The beauty of the independent agent business model is it lets the agent be completely customer-centric. Not bound to a specific insurance carrier, an independent agent can focus on selling the best products to their customers. By focusing on your customers’ wants and needs, you will find it easier to build strong relationships with them. These relationships then create the perfect conditions for growing your business because they create so many opportunities to upsell and cross-sell products.  

Upselling and Cross-Selling Are Key to Agency Growth

It’s easier to sell to someone who has already committed to making a purchase. That sounds like common sense, sure, but it’s worth putting numbers to this dynamic to illustrate how important it actually is. Tommy Walker at ConversionXL points out how important upselling and cross-selling have been for Amazon, which in 20 years went from an ambitious online bookseller to one of the biggest companies on the planet. Walker says that as far back as 2006, upsells and cross-sells accounted for more than a third of Amazon’s revenue. The same dynamic can work for independent agents, who are free to carry the product lines they feel will add the most value to their customers — just as Amazon is free to carry only the products it feels will sell. The difference, however, is independent agents as a whole appear to be leaving a lot of money on the table. According to J.D. Power, the average independent agent has eight carrier relationships for personal lines of insurance and 11 carrier relationships for commercial lines. That paucity of available products restricts their capacity to upsell or cross-sell. “That missed bundling opportunity represents an enormous untapped premium opportunity for insurers,” J.D. Power writes. Below, we will explore the kinds of product lines that will help independent agents tap into those premium opportunities.

Products That Will Help You Upsell

As marketer Alp Mimaroglu points out, the actual purpose of the upsell is to connect your customer with a product that helps them meet their goals. The extra revenue is nice, but it’s a secondary benefit. After all, as sales expert Anthony Iannarino says: “It’s about caring enough to create value for customers. If you get that part right, selling is easy.” With that in mind, let’s look at where some of those upsell opportunities could come from.

Products With a Higher Payout

If you believe circumstances are creating high risks for a customer, note this in your consultation and recommend a policy with a higher payout. Let’s look at an example from a commercial line, a business interruption policy. This kind of policy protects a business from financial consequences if any incident halts its operations — and it’s a form of protection that two-thirds of small businesses don’t have, according to Insurance Journal. In an environment rife with new threats to someone’s ability to do business — e.g. when tariff wars or government shutdowns loom constantly — such a policy could add value to a business owner and help protect your customer from an unpredictable future.

Products That Offer a Wider Scope of Coverage

Having insurance against personal or commercial risks is essential, but having the right coverage is even more critical. Let’s return to the business interruption policy example. As Clint Gharib points out at Forbes, the premium a business pays will determine how much money it receives if its operation is interrupted. However, it won’t get any of that amount if the cause of the interruption is not covered. For example, if contingent business income (e.g. loss from direct suppliers) is not a rider, the business won’t get any insurance money if it has to stop manufacturing for a week because a supplier goes bankrupt. It is the job of the independent agent to advise a customer about the possible risks and necessary riders.

Products for Additional Beneficiaries

Life insurance is another line you can upsell with additional coverage. When only one parent in a two-parent family works, it is a must to have a life insurance policy on the sole earner. As that young family grows, though, it might make sense to offer coverage for the non-working parent, as it could be costly to replace the child-care services of the stay-at-home parent. Similarly, Carrie Houchins-Witt argues that it makes sense to offer permanent coverage for a child if there’s a family history of a severe health condition.

Products That Create Value for a Marginal Cost Increase

Upselling coverage can also be done casually when there is a routine policy change, Alan Shulman advises at Insurance Journal. For example, if a customer wants to add a driver to his car insurance, you can suggest that he increase his liability coverage. “Since any increase in premium will be pro-rated, nearly all insureds will accept the small extra cost,” Shulman says.

How to Cross-Sell Products

David Whelan and Sean O’Neill at Bain & Company note how cross-selling customers has self-reinforcing benefits: You capture more revenue per customer, and customers who buy more products remain loyal longer. Further, Laura Mazzuca Toops points out that “cross-selling insurance improves retentions, increases profits, and strengthens relationships by offering customers everything from life to pet insurance.” However, it’s worth emphasizing again that these offers must take place within the context of a strong customer relationship. “It is therefore essential to ensure that what you are offering your client enhances their perceived value, holds their attention, and keeps them coming back,” advises Moira McCormick at pricing software company BlackCurve. Below are a few ways you can honor that bond while still recognizing an opportunity to cross-sell a product.

Tread Lightly When a Customer Opens a Policy

Going for the cross-sell too early could put a customer off. It is best to build a trusting relationship first. However, it doesn’t mean there are no opportunities for cross-selling here. As long as your suggestion makes sense and adds value to the customer, you still can try. Here is one such example: Imagine a customer comes in to discuss a policy for their business. The business is a high-risk endeavor, an upscale restaurant in a recently gentrified neighborhood. In such a situation, it makes sense to discuss the potential fit of a product that can help ensure the quality of life the entrepreneur and their family had grown accustomed to.

Be Alert to Opportunities When a Customer Wants to Change an Existing Policy

McKinsey partners Jon Godsall, Aditi Jain, Kia Javanmardian and Fritz Nauck note that existing customers have a much higher probability of buying additional insurance products within 12 months of their initial purchase. Therefore, it’s a good idea to follow up with your customer when they come back within the first year to renew or tweak a policy. Have a list of questions ready for anyone who comes in to renew a policy. By asking them about the updated policy details, you can identify cross-selling opportunities. If your agency has a new discount program for customers who pair homeowner insurance and auto insurance, for example, a renewal is the ideal time to bring this up. Troy Thompson at Pinnacle says such a value proposition has been compelling in his experience. “It’s a no-brainer as the discount is so deep that 90% of our clients have auto and home,” he says.  

Building Lifelong Customer Relationships

The more you know about a customer, the more upselling and cross-selling opportunities you can identify. That’s why tools and processes to support customer relationship management are so crucial for agents. As that relationship deepens, you will be able to identify further opportunities to create value for your customers. Over time, those bonds will translate into higher lifetime customer values for your business. As John Senior, Tom Springer and Lori Sherer at Bain & Company point out, customer churn in the insurance industry drops sharply as an insurer sells customers another one or two products. That’s how creating customer value leads to business growth. Focus on the relationship, and the retention and sales opportunities will naturally follow.   Images by: goodluz/©123RF Stock Photo, hasloo/©123RF Stock Photo, goodluz/©123RF Stock Photo"