This article covers an ideal process for using retention insights in your company.
Companies that have the greatest success with retention analytics do two things well. The first is that they follow up with each account that is flagged. The types of follow-up are discussed in more detail below. The second is that they record those engagements in their system of record.
These analytics are tools to help staff already doing retention work spend their time on the accounts most likely to leave - rather than looking at factors like the largest dollar amount or number of products purchased. Doing this removes the subjectivity around renewals, enabling staff to spend their time more efficiently.
It is important to work on each flagged account to ensure opportunities are not missed. Below is an example of how one organization structures its renewal work using the three Qualitative tiers:
- High confidence flags get an individual phone call 45 days out and an offer to requote their business. The value in doing this is less about adjusting the rate for the policyholder but allowing the broker to uncover any changes that may make the individual more likely to leave.
- Medium Confidence - 40 days out, each account in this tier receives a tailored automated email offering to schedule a time to meet to discuss their renewal. This brokerage found that doing this captured the 15% of policyholders that would have otherwise canceled. All accounts that did not engage were enrolled in an intensive marketing campaign where they received an email every two weeks highlighting the benefits of the brokerage.
- Low confidence - 30 days out, every account received an email regarding their renewal stating the account has been reviewed, and while there is not a need to meet, their broker can if there are any concerns.
When using retention analytics, the goal is to unlock scalability around your renewal customer servicing. One of the critical areas where retention analytics helps is by reducing induced churn. Induced churn is a phenomenon caused by contacting otherwise happy customers and reminding them to shop.
This leads to lower retention rates and higher acquisition costs. In fact, induced churn negates almost all the ‘lift’ a retention team will have. When using retention insights, the goal should always be the least amount of contact necessary to provide:
- A fantastic customer experience;
- Ensure retention and minimize defections.
That’s why using retention insights to segment your customers and technology to augment your team’s outreach is so crucial.