How Short-Term Insurance Can Turn Into Long-Term Customers

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  • One-off short-term insurance products are becoming more and more common. 

    For instance, there’s trip insurance, which covers flight delays, cancellations and medical emergencies, writes travel blogger and author Matthew Kepnes. There’s also event insurance, which offers general liability coverage for a specific event, says business consultant Kyle Cramer, as well as special coverage when required either by the type of event or the vendor.

    An independent agent can use one-off sale as the first step towards building long-term customer relationships with people who will eventually need things like homeowners insurance, setting the stage for repeat business. Here are some strategies you can use to make this transition from short-term customers to long-term smoothly and retain them for the long run.


    Start By Providing an Amazing Initial Experience

    First impressions are everything in the insurance industry. It’s crucial that you get started off on the right foot with your customers. A big part of this is going the extra mile and doing everything within your power to ensure a positive experience.

    “Great customer service can go a long way,” says Alon Eisenberg at Trusted Shops. “When a customer feels like their happiness is a company’s number one concern, then they will be eager to head back there when the time comes.”

    Arnt Eriksen, creator and marketer, says a positive customer experience involves three key steps. First, you must identify what the ideal insurance customer experience looks like. What questions and concerns do customers have? What are they feeling? How do they want to engage with your company? The answers you find to these questions can help you put yourself in your customers’ shoes and see things from their perspective.

    If someone is interested in travel insurance, for example, they would probably want to know what happens if they miss their flight and how the reimbursement process works. They may feel anxious about an upcoming trip and want an agent who can simplify trip insurance so they don’t have to concern themselves with tedious logistics. And they may want multiple options to engage an agent, such as in-person, over the phone, email and through messenger apps. 

    Secondly, you need to set specific goals, such as making it easy to understand the ins and outs of a policy and quell major concerns. As Eisenberg puts it, give your insurance customers more than just products. Give them your expertise. This will guide your approach and help you focus on what’s most important.

    And finally, do whatever it takes to align your objectives with reality. In the case of travel insurance, you may want to take the time to communicate one-on-one with a customer using their preferred communication channel to answer questions and clear up any murky areas. 

    Taking the time to craft a great customer experience can be very worthwhile. According to an Ernst & Young survey, nearly one-half of customers (40 percent) base their choice of whether to continue a relationship with an agent based on the quality of their experience, reports Ariel Russo at low-code app development platform OutSystems.

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    Ask Smart Questions

    Another part of the equation is asking questions to find out what other areas in their lives one-off customers need to be fully insured. This allows you to potentially further your relationship, and demonstrates to customers that you’re interested in their input. Senior communications strategist John Novaria explains that “whether it’s financial gain, acquiring a new asset or increased liability, almost every milestone is an occasion to reevaluate exposures and coverage.” 

    It’s all about knowing what’s happening in a customer’s life so you can steer the insurance conversation in the right direction. Insurance sales coach Lew Nason says a good way to go about this is to ask thoughtful questions that help customers identify problems and then offer them viable solutions. 

    Let’s go back to our example of someone buying one-off trip insurance. Say they’re going on an international trip that will last two weeks. 

    When traveling out of the country like this, they would likely be concerned about their home and belongings while they’re away — a topic that could help you segue to the topic of homeowners coverage. So you might say something like, “If you don’t mind me asking, do you feel you have adequate coverage on your personal belongings while you’re traveling?”

    You don’t want to be pushy or use scare tactics. You simply want to ask smart questions that will help you understand your customer’s needs and pinpoint areas where you can provide value. 


    Make a Strong Effort to Nurture Relationships

    It’s also important to continually nurture relationships far beyond your initial interactions.

    “Customers want more frequent, meaningful, and personalized communications,” says communications professional Alex Strautman. “Once you have a client, make sure you make an ongoing effort to communicate with them.”

    Email and social media are two of the best channels for customer relationship maintenance, according to the team at lead conversion optimization platform Verse. Reaching out with targeted, personalized information is a great way to stay on your customers’ radar and show that you genuinely care. For instance, you might compile a list of helpful resources for the location your customer is traveling to, including attractions to check out, top restaurants and safety tips. 

    The idea is to keep your interactions as personalized as possible, writes lead generation consultant Patti Heath. Look for practical ways to help and provide value. 

    Remember to use the right tone and style with your communications. “People prefer to do business with other humans — not robotic businesses,” says entrepreneur and investor Dane Shelford. “It’s an authentic, empathetic, conversational style that will appeal to your customers the most.”

    This should help make your insurance agency more relatable, which in turn, can make one-off customers more receptive to buying other forms of insurance. This brings us to our next point.

    short-term insurance

    Make Relevant Suggestions When the Time is Right

    Once you understand a customer’s situation and have identified areas where you can help, you’ll want to offer suggestions that match their specific needs. Let’s go back to our homeowners insurance example. 

    Insurance writer Allison Kade points out that homeowners policies can vary significantly, with some offering extensive travel-related coverage and others no coverage at all. That’s why she strongly recommends that homeowners familiarize themselves with the full range of coverage before heading out. 

    If there’s a situation where a person doesn’t have the level of coverage they need and feels uncomfortable about it, you could highlight a potential policy that would be a better fit. And considering that the person will likely be staying in a hotel or rental unit, you might recommend a policy that includes off-premises theft coverage. This covers personal items that are lost or stolen while traveling (i.e. an expensive camera is taken from a hotel room), explains the team at Pepe Insurance Agency


    Strive to Retain the Maximum Percentage of Customers

    Let’s say that you successfully convince a one-off customer to purchase a more comprehensive, long-term policy like homeowners insurance. You don’t want to stop there. 

    Instead, you should work diligently to retain insurance customers and create lasting relationships. Much of this relies on common sense strategies like being friendly, polite and professional. 

    You can often further improve retention by providing value-added services, says Adam Hussain, vice president of customer success at insurance application platform Indio Technologie. One example is visiting a customer’s property twice a year to take photos for claims purposes. Another is sending safe-driving alerts through text when there are treacherous driving conditions in a customer’s area.

    Anyone can sell an insurance product, but going to these lengths of service makes your customers “stickier” because it’s not something they can find with all agents. 

    Cultivating an online reputation is important too, says Rexly Penaflorida II at ReviewTrackers. Agents should be quick to respond to online reviews because 80 percent of customers believe that an agency cares more about them if they respond. “A simple response goes a long way in showing an insurer’s appreciation and value of each customer and their feedback.”

    While you can set google alerts to let you know whenever your agency is mentioned online, there are apps designed to do more than that, including increasing the number of reviews. Scott Gerber, founder of Young Entrepreneur Council, compiled a list of apps that can help you streamline the process. 


    Make the Shift From Short-Term to Long-Term 

    It’s important for independent agents to see the big picture with one-off customers. Just because someone thinks they only want basic coverage for an upcoming trip or event doesn’t mean that’s it. In many cases, you can turn these short-term customers into long-term ones. It just boils down to getting started out on the right foot and working hard to build meaningful relationships. 

    That approach combined with timely suggestions and implementing fundamental retention techniques should help you get the most from these customers and so you can continue to grow your business.

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