Running a start-up business requires dedication, substantial capital, and hard work. The bar is even higher when it's a business as complex as insurance agencies. Finding clients is the immovable obstacle every new insurance business faces, and it is also the basis for profit-making.
The insurance industry is inarguably a successful one. PR Newswire reports that the global insurance industry will generate around $7 trillion in 2022, with an estimated revenue of $8.5 trillion in 2028. This solidifies the belief that start-ups can profit from selling insurance services; you only need to know how to make your agency work.
Whether you just started your company or are learning how to become an independent insurance agent, understand your value, what makes you unique and how you can implement that in your customer relationships. This article will discuss ways to make more profits as a new insurance agency.
6 Ways New Insurance Agencies Can Make Profits
Besides knowing your niche and sticking to it — which is vital in this industry, there are several strategies you can utilize to become profitable as an independent insurance agent or agency. Some of them are:
1. Examine Your Competitors
Know your competition. It does not stop there; you should also know their marketing strategies to learn from them, find mistakes, and patch them up with your developed strategy. Suppose your competing agency has a large customer retention rate, you should study their strategies — this can be as simple as observing their customer service team, watching how they respond, and the vital platforms that make communication with clients easy.
You can also study their price plan — how and why it affects your niche market, figure out their strengths and weaknesses — see if you can take advantage of their weak points to gain the upper hand against them.
Also, customer demographics are an important aspect of your agency's success. You should find the appropriate gender and age for your offering and other insurance policies you can pitch to them. To cap it all, check your competitors' customer satisfaction ratings to know if their strategies work. If it works for them, adding a unique spice will also work for you.
2. Ask for Referrals
Good customer service is one of the most effective marketing strategies for any insurance agency. Besides increasing the chances of your clients returning, it also builds an avenue for referrals. Asking current clients for referrals is often overlooked in business, but it is a swift marketing approach that can double your company's revenue. This is also a sure way to make a profit as an independent insurance agent, as old customers are linked to potential ones.
Another reason why you should ask for referrals is that most clients forget. Yes, it's that simple. For instance, if you are selling Medicare to people above 65 years that can easily refer you to their drinking buddies, they may forget to follow through, and a reminder from you might make them do that. More importantly, a good service and client relationship also prompt referrals. This brings more clients to your business, which translates to additional profit.
3. Improve Customer Loyalty
There are many ways to encourage your clients to be loyal to your brand. One sure way is through discounts. People love freebies, and you can appeal to them by slashing your price, but you should include a clause that says this discount is for regulars. For instance, if your patrons pay their premiums on time, give them a discount of 10%, or offer them special deals on car and home insurance if they insure more than one car.
Another way to improve consumer loyalty is by offering special trips or vacations to loyal patrons. This will also build your publicity and referral rate, as only a few companies do this. However, this might put a dent in your account so ensure you are getting rewards in another way.
For example, only give out special trip cards to consistent patrons with numerous purchased policies with your agency. After the trip, create a feedback platform for them to write about their vacation experience. This can also build your brand's image.
4. Strengthen Your Social Media Presence and Website
The internet has many benefits for start-ups, and social media is one of them. Social media creates a platform to reach your audience, market to your target consumers, get referrals, and generate traffic to your website. It also allows you to communicate with prospects, share your values with interested people, and pitch your business.
Besides these benefits, your social media pages can also serve as your portfolio to potential consumers. You can achieve this by pasting customer reviews, writing quality content about your services and explaining the importance of it to people that don't know about them.
You should also optimize your website to be user-friendly, easily navigated with your company's goals and "About Us" simplified for your target audience. You can utilize social media in several ways. From clientele research to consumer reviews, the internet can boost your company's revenue and help you make a significant profit as an independent insurance agent.
5. Upgrade Your Marketing Strategies
Building a successful insurance agency is mostly about the numbers. However, it also requires an understanding of the importance of marketing. Marketing is the key to your success as a business owner and entrepreneur. Your strategies should rely on a long-term plan that strives for continual growth and improvement rather than one-time tactics like commercials and ads.
It would help if you designed your marketing plan to target potential clients at every stage of their decision process, ranging from their search for an agent to closing the deal on their first policy with you. You can achieve this by using the latest digital marketing trends to make your brand unique to others.
Some ways to upgrade your marketing campaigns are through social media, unique and quality content, ads, creating polls to know your consumer preference and much more. These marketing methods will bring in potential customers and also help your brand reach out to many other prospects.
6. Invest in Your Workforce
Your employees are your most valuable asset. Your choice and approach to your staff can make or break your business. You should invest in your employees by creating a conducive working environment and providing professional training and opportunities for growth.
This decision will help create an excellent performing team to deliver quality customer service. Of course, excellent services mean more clients and money for your firm.
Starting a thriving insurance agency is quite challenging. However, with these tips and strategies, you can get past the initial hurdles, build a great business, and improve your revenue. Besides these, it's also important that you always remind your patrons of your spectacular service as you would do for new prospects. If you don't blow your trumpets, no one else will.
Lydia Iseh is a writer with years of experience in writing SEO content that provides value to the reader. As someone who believes in the power of SEO to transform businesses, she enjoys being part of the process that helps websites rank high on search engines