Re-think your retention strategy by utilizing customer LTV for long-term engagement and turning customers into partners

There is a buzz word going around these days. It’s the question agency owners ask more and more: how can we increase customer LTV? For those not on the topic yet, that’s “Customer Lifetime Value.” And it’s the white-hot core of business growth for insurance agencies today.

Customer loyalty doesn’t come as easily as it used to. Customers ask, “What will you do for me that the agency down the street won’t do?” Mile-high service is a requirement for a healthy business.

And even if you convince them to work with you, there are always opportunities elsewhere. So how do you keep them loyal?

That’s the big question behind customer LTV. It’s the art of making a personal connection, building loyalty, and creating long-term opportunity.

customer ltv

Calculate your average customer LTV with simple math

LTV can quickly morph into a monstrosity of complicated mathematics. As an independent insurance agency, that kind of calculus isn’t always necessary. Keep it simple.

Calculate your average customer LTV by combining two primary variables:

1. The average time a customer stays active with your business.
2. The average monetary value of a customer within active status.

Multiply those two together, and you have an idea of your average customer LTV. However, if you want to get more detailed, there are more ways to calculate lifetime value.

customer ltv

Focus on building trust with customers before anything else

Long-term customer value is based on a foundation of trust and personal connection. It all starts with the salesperson. That first experience of purchasing a product sets the tone for future outreach and engagement.

How do you present your agency with integrity?

1. Be upfront and honest.

Make an extra effort to find a perfect policy for your customer. Weigh the pros and cons of each product. Show them how it works and why it’s beneficial.

2. Walk them through each policy.

Don’t close a deal with a prospect and then mail a fifty-page policy from the insurance company. Explain as much of the fine print as necessary. Customers value the extra face-time and care.


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3. Be available.

New policyholders have a lot of questions, even after they sign the dotted line. The salesperson should always be available to talk and hash out an issue.

customer ltv

Engage customers with “multiple touches” through different channels

Many insurance agencies lack a long-term targeting strategy. After the sale, everything goes quiet. Meanwhile, customers are talking to other agencies and comparing prices on products.

Loyalty comes through connection. You want customers to consider you the first and, hopefully, the only stop for insurance concerns. The problem: people forget about companies that don’t reach out.

1. Connect over social media.

It’ so easy! It’s almost a no-brainer. And yet, salespeople and agencies often forget. Remind your recent customers to connect on Facebook and LinkedIn.

2. Sign them up for a newsletter.

Emails are the least obtrusive way for companies to connect with their customer base. Plus, it’s simple to track engagement and find out what emails interest certain people. But make sure you know how to craft a subject line that gets readers to open the message!

3. Share content and education opportunities.

Become a resource of insurance information for people. When a customer decides to start a small business, they’ll go to your website to learn about liability insurance. Be the expert and trusted voice.

4. Target your cross-selling.

Once you’ve built a connection, work on increasing the customer LTV with targeted cross-selling. Record engagement, make notes on who needs certain types of insurance or has expressed interest, and make an offer.

customer ltv

Turn customers into advocates and referral sources

The next step in the journey to increasing customer LTV is turning your customers into business partners. At this point, you’re expanding outreach, bringing in referral business, and asking your trusted allies to promote your brand.

1. Ask for a testimonial and online review.

Nothing works better to promote a business than enthusiastic testimonials from real people. Along with five-star reviews, these assets boost credibility and bring in more consistent business.

2. Create a rewards program.

How do you reward customers for staying loyal to your agency? What do you give in return for referrals? Giving back something valuable creates a mutually beneficial relationship and turns customers into partners. Put together a retention strategy that includes rewards, referral incentives, and business partnerships. (Just remember that you can ask for reviews, but you can’t ask for good reviews in exchange for rewards.)

Continue this process with every customer that purchases a policy through your agency in the next year and watch what happens. The only possible outcomes are growth and more growth.


lead-managerlead-managerIncrease the lifetime value of your customers with automated follow-ups and sales funnel tracking. Blitz will show you how! Schedule a free demo today, and see how it works!


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